I noticed something interesting in Dean Baker’s vicious but fair review, Stress Test: The Indictment of Timothy Geithner. It is a long and detailed review going point by point over how Geithner is nothing more than a hired gun for the banks who didn’t didn’t give two bits for actual homeowners or the real economy except in the sense that they might hurt his banker friends. Go read his article, or my discussion, Tim Geithner: Grifter of the Power Elite. But here I am interested in one very small thing.
I’m used to politicians cherry picking whatever data is useful to them. But Geithner is supposed to be an economist—sort of a scientist. I understand that in his book, he would want to present himself in the best possible light. But to be actively deceptive? That goes way beyond what is acceptable. He really is an evil little man.
Geithner provided a graph of housing prices up to 2010 and claimed that it was his policies that caused the rapid drop in prices to stop in 2009 and then start rising. But this was actually a bad thing. The reason the prices of houses stopped falling was because the administration provided an $8,000 new home buyer’s credit. I have friends who used this to be able to buy their first home, and that’s great. But what the policy did on the macro-scale is to create another mini-housing bubble. The truth is that home prices had not yet reached their correct prices.
But you would never know that because Geithner decided to end his graph at 2010. He left out the part of the graph that I’ve shaded in grey when prices when down by about 6.5%. And this is just the overall price of houses. As Bake pointed out, Minneapolis saw a fall of almost 29% and Atlanta saw a fall of almost 52%. So a lot of homeowners got really screwed and Geithner is being extremely deceptive about it:
Now to be fair, after 2012, house prices did finally start to increase. But that doesn’t change the fact that many people paid more for their houses than they should have. And it doesn’t change the fact that Geithner is a liar who will say anything and present data in a totally dishonest way just to make himself look good. But lest we forget: Geithner is part of the power elite. Incompetence and outright villainy are rewarded in the power elite because the power elite are always rewarded no matter what they do. See, for example, Paul Wolfowitz.