By Peter Hartcher
In a speech to a closed gathering at the Lowy Institute in Sydney on Thursday, Paul Keating gave a starkly different account of Geithner’s record in handling the Asian crisis: “Tim Geithner was the Treasury line officer who wrote the IMF [International Monetary Fund] program for Indonesia in 1997-98, which was to apply current account solutions to a capital account crisis.” In other words, Geithner fundamentally misdiagnosed the problem. And his misdiagnosis led to a dreadfully wrong prescription.
For the record, Indonesia’s GNP fell 83% by July 1998.
All this from a man who ran us into a 90+ billion dollar whole which took 10 or so years to pay off. Doesn’t mean he is wrong, just that some of the abuse he heaps on others should be directed at himself.
Into a ‘whole’… super valuable, well thought out comment Colin.
Blame him for mucking up monetary policy in the late 1980’s, but not for the debt (non) issue. Wouldn’t the average family wish they could pay off their home mortgage in 10 years.
Not the same Colin…..
What was the debt used to fund? If it was used to fund regular government expenditure that is inexcusable. The only justification for public debt should be a major infrastructure program, a war, or collapse of the banking system. The latter would point to an earlier regulatory failure.