Duncan’s Economic Blog

In Defence of Myners & Geithner

Posted in Uncategorized by duncanseconomicblog on April 1, 2009

There was been a lot of fuss about the role of Lord Myners in the ludicrous pension arrangements of Sir Fred and US Treasury Secretary Tim Geithner in the approving of $160mn of bonuses at AIG.

To be absolutely clear, I think both sets of payments are wrong and in both cases the respective governments are right to be looking at ways of clawing them back. I think if Sir Fred were a man of honour he would voluntarily hand it back. He clearly isn’t.

But this fuss is very silly.

Neither Myners nor Geithner are typical ‘politicians’. Myners comes from a financial background. Geithner, although a former Treasury official, is essentially a non-political technocrat with a background in policy and central banking.

At the time of the approval of Sir Fred’s pension, RBS (and HBOS) were literally hours from collapse. At the time of the AIG bonus approval, the (seriously understaffed) US Treasury was working on a second bailout of the system after the failure of the Bush administration’s TARP.

In the context of multi-billion rescue packages, both payments were small.

Both Myners and Geithner had bigger things to worry about the time.

If either was a more natural politician then they probably would have worried more about the public relations disaster that these payments represent. Neither is. But both are professionals with the right skills for this kind of crisis . We should value that and not attack them for public relations failings. No matter how annoying.


One Response

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  1. snowflake5 said, on April 4, 2009 at 3:48 pm

    I totally agree. They had just a weekend to bail out the entire banking system, were working flat out on finalising it before the markets opened on Monday. All the criticisms come from people who have never been in that situation, and imagine that you have plenty of time to drink cups of tea while going through side issues like pensions for chief execs, while ignoring the main bailout!

    It underlines the lack of real world experience in the opposition. They’ve never run anything or had to deal with crises and it shows.

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