WASHINGTON: Americans looking for work are unlikely to find new jobs before next spring, US Treasury Secretary Timothy Geithner said on Wednesday, though he insisted the economy was on the mend.
“Most economists would say that, by the spring, we’ll have positive job growth,” Geithner said in an interview on ABC Television’s “Good Morning America,” conceding that it is unlikely there was any job growth in December.
“The economy’s growing, it’s getting better, getting stronger, and I think most people would say the economy is strengthening going into the end of the year ... but the key thing is when do we get job growth back,” he said.
Since September 2007, when the US economy slipped into recession, 7.2 million jobs have been lost as businesses from Wall Street to manufacturing companies slashed payrolls. There were dramatically fewer job losses in November than expected, when employers cut employment by 11,000. But the unemployment rate still is 10 percent, and Geithner said regaining job creation was vital for recovery.
Figures for December employment will not be released by the government until early January.
Geithner said American optimism has taken a beating.
“There is still a very tough economy. The crisis just caused a huge amount of damage to peoples’ basic confidence in their economic future, and you see that in business confidence, consumer confidence too,” he said. Geithner said people should be more hopeful about 2010.
“You can see the beginnings of that process of healing, confidence gradually improving, and that’s something we want to work very hard to reinforce,” he said.
The government poured hundreds of billions of dollars of taxpayer money into propping up US banks during the financial crisis. The money is now being repaid, and big paydays are resuming on Wall Street as bonuses are handed out.
Public anger at banks’ reckless lending and exceptionally high pay remains intense, but Geithner refused to say which banks he thought were slowest to respond to that anger.
“That’s not a judgment for me to make or that I want to share with you,” he said. Geithner was seen as a Wall Street figure himself as president of the New York Federal Reserve Bank before he took over the Treasury portfolio last January.
He shrugged off criticism that some Congressional members heaped on him and focused on the administration’s efforts to calm the crisis that was raging just a year ago. “I knew from the beginning that this was going to be very hard and tough, and the things that we thought were going to be necessary were going to be deeply unpopular on both sides of the aisle,” Geithner said.
“But what we did to break the back of this financial panic was hugely effective at much lower cost than anybody expected,” he added. “We’ve had $90 billion come back from banks, banks are repaying with interest, and that’s just one measure of how quickly we’ve been able to get stability back.”
Geithner said the Obama administration is confident it will prevent a repeat of last year’s financial crisis, the worst in seven decades. “We are not going to have a second wave of financial crisis,” Geithner said. “We cannot afford to let the country live again with a risk that we are going to have another series of events like we had last year. That is not something that is acceptable.”
Geithner, interviewed on NPR’s “All Things Considered” program, rejected the idea that a serious new crisis could be triggered by lingering problems with commercial real estate loans or with a sudden weakening in the value of the dollar.
“We will do what is necessary to prevent that and that is completely within our capacity to prevent,” he said. Geithner spoke on a day when President Barack Obama met with executives from a number of community banks, reiterating his plea for banks to do more to lend to small businesses. Obama took a more conciliatory tone with the leaders of the smaller community banks than he had in a meeting last week with leaders of the country’s largest banks.
Geithner, referring to the actions of the large banks in last year’s crisis, said he did not believe they yet understood that they had lost the “confidence and trust of the American people.” He said bankers had a “long way to go” to restore that confidence. Geithner defended his numerous contacts with executives from the largest banks, contacts that were revealed in telephone calendars obtained in October by The Associated Press under the Freedom of Information Act. Geithner said that he also spent a considerable amount of time talking to owners of small businesses and to small banks as well. He called it a “misperception” that he was devoting too much time conferring with the largest banks.