Geithner’s Mea Culpa

Learning from your mistakes is a hallmark of Western scholarship. It also characterizes Chinese thought.

The Confucian thinker Mencius once praised a fellow scholar: “When someone points out a mistake [he] has made, he is happy.” So Tim Geithner, student of the East, should be really happy now.

Last week Secretary Geithner admitted that as Vice-Chair of the Fed he presided over policy that was too loose for too long. This helped fuel “reaching for yield” that pumped excess liquidity into risky assets and excerbated the boom (and bust) in housing. The Secretary’s confession is extraordinary, in that the other high priests of the Fed have consistently blamed investment bankers and billion-dollar hedge funds for the global credit glut.

The lifetime public-servant thus sets a powerful example for other rule-makers in Washington. When a policy is wrong, abandon it. Learn from your errors, and move on. If only more leaders would adopt the wisdom of confession, contrition, and correction.

Douglas R. Tengdin, CFA
Chief Investment Officer
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By | 2014-09-04T21:05:57+00:00 May 13th, 2009|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. - Leave a comment if you have any questions—I read them all! - And Follow me on Twitter @GlobalMarketUpd

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