Thursday, March 26

Revealing Inconsistencies: Timothy Geithner


U.S. Treasury Secretary Timothy Geithner demonstrated why message consistency is important. Speaking at the Council on Foreign Relations, he said the U.S. is "open" to a call for a new global currency to replace the U.S. dollar.

"We’re actually quite open to that suggestion — you should see it as rather evolutionary rather building on the current architecture rather than moving us to global monetary union," Geithner said, saying it deserved consideration.

Except, um, the U.S. is not.

"I don't believe there's a need for a global currency," said President Barrack Obama, rejecting a new global currency to replace the dollar at a press conference 24-hours before Geithner spoke.

The consequences of the Geithner gaffe led to the dollar immediately falling on world currency markets. In fact, it fell 1.3 percent against the euro within 10 minutes of his remarks.

It also opened a renewed flood of criticism over the Obama administration's plan to increase the budget deficit this year to 10 percent or more of the gross domestic product, with the most outspoken being Czech Prime Minister Mirek Topolanek. He described the current U.S. policy as "a road to hell." He has since tendered his resignation, but will retain the E.U. presidency through June.

China is not alone in alluding to an abandonment of the U.S. dollar as it expresses worry over higher budget deficits resulting from increased spending. Russia has been pressing G20 members for a single world currency for some time.

This is also not the first time Geithner and President Obama had directly contradicted each other. Nor is it the only time the new administration has sent mixed messages nationally and internationally.

In fact, the current U.S. policy seems to be a contradiction in itself. While Geithner plans to impose government control over financial markets to "decide how much risk to take in the pursuit of profit," President Obama's policy races toward extreme spending, which carries overwhelming risk.

All of it demonstrates a growing communication challenge exhibited by the new administration. While always reasonably adept during the campaign trail to deliver a unified message, the President seems incapable of delivering a consistent message with his administration. And you know what that usually means. If there isn't a consistent message, then there likely isn't a cohesive plan, at least one that everybody knows about or anyone can agree on.

It applies to business communication as well. Inconsistent communication is often a symptom of something else, much like that initial sniffle before you feel sick. Someone might want to pass the administration a tissue. It seems to be going around.

2 comments:

Anonymous said...

My guess is that the whole things is designed to keep our heads spinning so that we can't see the real stuff their attempting to do.

I was watching the COMEX with the realtime widget ExactPrice and it was stunning to see what happened to gold when Geithner made that comment slip. It shot up like crazy. After he clarified it the price came back down some but not completely. Tells me just how much uncertainty, or distrust, or fear - take your pick - there is in markets.

Rich on 3/27/09, 5:06 PM said...

Haljett,

There are some days that I would be very inclined to agree with you. There is so much smoke, it's hard to see the real fire.

There is ample uncertainty, or distrust, or fear in the markets, and the leadership needs to resolve to shift to calm the market, nurture trust, and provide hope or they really aren't being leaders at all.

All my best,
Rich

 

Blog Archive

by Richard R Becker Copyright and Trademark, Copywrite, Ink. © 2021; Theme designed by Bie Blogger Template