October 18, 2010, Palo Alto, California

U.S. Treasury of the Secretary Timothy Geithner appeared at the Commonwealth Club in Palo Alto California. He delivering an opening statement and then took questions, speaking on a variety of topics including energy, fiscal policy, currency devaluation, and the role of government.

This video segment features interview excerpts on topics including clean and renewable energy, investment in public infrastructure, and fair currency valuation by both the United States and China.

Partial transcription:
“I think it’s right to say that we are not smart, not wise, not responsible, not sensible, in how we use energy as a country today. We’re one of the largest consumers of the types of energy that are worst for the environment. It’s something we should not tolerate and accept, and to change that is going to require a broad based set of reforms to how we use energy, how it’s priced, how expensive it is, the standards we force companies to run with. And as you know, the President was successful in winning congressional support for very substantial increases in renewables, and some very important improvements in standards for, for example, gasoline standards, efficiency standards for cars, but he has not yet been successful in finding political support for the broader set of challenges for reforms in energy that we think are important. And he’s going to keep working at that, but again, it’s not something that he can do without a broader consensus of support from the business community. ”

“There’s been a lot of support from the business community for very sensible reforms in this area. A lot of coalitions of some of the most energy intensive industries out there supportive of reform, recognizing I think as your questioner implied we’re not in a sustainable position, so we’ve got some ways to go in that area.”
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“Investment in public infrastructure , in transportation, is a good investment. Now, our government doesn’t do it … not perfect in how they do it. A lot of inefficiencies and a lot of politics in how those dollars are allocated, which is one reason why the president has proposed that we establish an infrastructure bank that can bring a more disciplined, a much more selective approach toward deciding what we finance. But it’s a very good strategy for growth near term, it’s very good for growth, short term and long term, and it has the benefit of getting some of the people hardest hit by the recession, people in manufacturing, in autos, or in construction, back to work more quickly.”
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And I should say, that you know, even though I’ve been in Government all my life, and I work for a president that didn’t come from the business community, he understands and we understand that, you know, the business of America is business, and the role of government is to help businesses, create better incentives for them to create jobs ,to innovate, to grow and expand, but as we have all learned , and you’ve seen in this crisis, that requires that the government be better at doing things only the government can do, like educating our children, like making sure our financial system does not leave us with huge risk, with huge collateral damage when you have a recession, that we’re using energy more efficiently, that we find ways to make sure a broader range of our citizens have access to affordable health care. Those are things that governments have to do for market economies, for businesses to thrive, to function, and as you’ve seen as a country we have not been good enough at doing those things, we have to get better at it, and the world is getting better at it more quickly than we are now, and that should be a huge cause for action in Washington and in state and local governments around the country.”
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“It is very important for people to understand that the United States of America and no country around the world can devalue its way to prosperity, to competitiveness. It is not a viable, feasible strategy and we will not engage in it. It is very important to us that people have confidence in our capacity to meet our long term fiscal obligations, to make sure that the federal reserve does its job of keeping inflation low and stable over time, and we recognize that the U.S. plays a particularly important special role in the international financial system because the dollar serves as the principle reserve asset of the global financial system. So we’re gonna work very hard to make sure that we preserve confidence in a strong dollar and that we’re working very hard to strengthen confidence in our capacity and Washington’s capacity to, as I said, repair the damage caused by this crisis and restore, as we recover, a sense of discipline, gravity, balance to our long term fiscal position.”

In this video, Secretary Geithner responds to questions about the financial crisis and recovery:

Partial Excerpt: “The mistakes made by our people running some of our major financial institutions, by small and large banks across the country, and the mistakes made by people in government responsibility for overseeing that system were catastrophic, and it was absolutely essential that as we put out the financial fire, which we have done at much lower cost, much more quickly, much more effectively, than anyone thought was possible, that we change the basic rules of the game in which institutions operate.
And I believe, but I’m going to take the optimistic side of the debate, that the reforms Congress passed this summer are the most powerful, the most effective, I think a model for the world in how to make sure you bring a more modern structure of oversight to a market oriented financial system, and we’ve already moved very quickly to raise capital requirements on banks, to reduce leverage, to make sure they’re operating with much stronger financial cushions against whatever the uncertain source of risk we face in the future, we’re moving very quickly to make sure consumer’s have access to much better disclosure about the basic terms of a mortgage or a credit card, and we now have the tools we did not have before the crisis to make sure that we can dismember a large institution that managed itself to the edge of a cliff, to make sure we can dismember them safely at less cost to the taxpayer, less damage to the economy as a whole. So that imperative of financial reform quickly was very important, and I’m much more confident now because of those reforms that we’re gonna have a financial system that can go back to being the envy of the world and do what it exists to do, which is to take the savings of Americans and channel those to businesses that have some idea, that need to grow. We were once the envy of the world in doing that, we lost our way, and we’re going to make sure that we go back to a country with a system that serves that basic function better.”

This video features Geithner’s opening statement on the economy and priorities ahead:

Excerpt: “Investing in public infrastructure we think has one of the highest returns on the use of a dollar of taxpayer’s resources, it’s good for long term growth too, and it’s very good at helping people get back to work who have been hurt most by the crisis in construction, in manufacturing. These are relatively good jobs, they pay relatively well. And again, we’re not a country with unlimited resources, we have to make choices about how we use those resources, and we want to make sure we’re investing those resources in things that will raise our long term growth prospects.”