Sadly, the domain name firetimgeithner.com is taken. But it's a good sentiment nonetheless.
[Yesterday] US Treasury Secretary Tim Geithner shocked global markets by revealing that Washington is "quite open" to Chinese proposals for the gradual development of a global reserve currency run by the International Monetary Fund.
The dollar plunged instantly against the euro, yen, and sterling as the comments flashed across trading screens. David Bloom, currency chief at HSBC, said the apparent policy shift amounts to an earthquake in geo-finance.
"The mere fact that the US Treasury Secretary is even entertaining thoughts that the dollar may cease being the anchor of the global monetary system has caused consternation," he said.
Leaving aside that it is not the place of the Secretary of the Treasury to suggest that the United States would participate in what would be, in effect, a "Global Euro," (such a proposal should come from the President, and only after consultation with Congress), that Geithner would say such a thing in the present economy is sheer idiocy. Geithner's ill-considered remark carried the possibility of setting off an Indonesian style dollar selloff, which could have gotten out of anyone's control very quickly.
Indeed, Geithner himself apparently recognized this, perhaps after a friendly telephone call from someone else in the administration, such as Robert Rubin?
Mr Geithner later qualified his remarks, insisting that the dollar would remain the "world's dominant reserve currency … for a long period of time" but the seeds of doubt have been sown.
The markets appear baffled by the confused statements emanating from Washington. President Barack Obama told a new conference hours earlier that there was no threat to the reserve status of the dollar.
"I don't believe that there is a need for a global currency. The reason the dollar is strong right now is because investors consider the United States the strongest economy in the world with the most stable political system in the world," he said.
As with Britain before World War II, one of the bedrock strengths of the American economy is that the dollar already is the default world currency. To allow an unelected lackey, who apparently made the suggestion as a way of soothing Chinese feelings wounded after intemperate remarks by Geithner in January, to suggest replacing it with a world currency is madness.
As much as I loathe him, Bill Clinton is looking really good these days. Since Clinton's not eligible for high office, perhaps the best thing the Obama Administration could do, if it wants to look really good some time in the future, would be to fire Tim Geithner. Replace him with Robert Rubin, and let an adult run the show.