Cautiously optimistic, Treasury Secretary Timothy Geithner said Monday that the economy has "clearly stabilized" and the credit markets have improved, during an interview with NEWSWEEK Editor Jon Meacham in Washington. Geithner said he plans to announce broader oversight plans for the financial system in the next few weeks. "The impetus for reform will fade" over time, the secretary explained, and it's vital to make changes while the "trauma" of the moment is fresh on people's minds.
And while Geithner sees improvement, he was careful to emphasize that many Americans haven't seen that yet. "A lot of people are hurting," he said during the Q&A, which was broadcast live on Facebook and CSPAN. "It's still the most challenging economic crisis seen in generations … it's going to be bumpy and feel fragile for a while."
The immediate concern is to get "growth back on track" and avoid "stepping on the brakes too soon," Geithner said. He conceded that the the deficit, which critics of the stimulus package have warned about, will be "one of the defining economic challenges of the next five years."
To have a recovery with a "firmer foundation, and more growth in the future, it may make recovery a little slower" he said. The current economic downturn fit the "basic pattern like all financial crises, but the difference is this one was much more damaging."
The secretary hopes that the government will be able to eventually take more of a back seat in the economic recovery, but he can't pinpoint when that will happen. He was quick to say he is not in favor of capping executive salaries and that a lot of the burden for recovery may "fall on the states and cities." Geithner remained tight lipped on whether or not states that fail to shore up their deficits would receive federal bailouts.
In spite of the urgency of the crisis, the Treasury still has many vacancies including deputy secretary and two key undersecretaries, but Geithner said, "I am pleased by the progress we're making." He hopes to have his complete staff in place by August.