Washington Business Leaders: We Have Questions For Geithner
We had Post reporters ask a number of Washington-area business executives the following question: If you could sit down with Treasury Secretary-designee Tim Geithner, what would you ask him?
At the bottom of this posting, you can use the comment feature to add questions you have for Geithner. We'll publish the best ones in a subsequent blog posting.
Now, on to the questions from the Washington-area business community:
From Ray Ritchey, executive vice president and national director of acquisitions and development for Boston Properties, one of the biggest real estate companies in the country, who spoke to The Post's Dana Hedgpeth:
-- "What plans does [Geithner] have to free up the capital markets so that well conceived, well executed, non-speculative development projects can be financed (or existing buildings refinanced) on a commercially reasonable basis so that our firms can return to satisfying the space needs of our country, and put the construction industry back to work?"
-- "What restrictions and/or policy changes does he plan to implement to provide the necessary assurances to investors (Wall Street to Main Street) that the abuses of the last year will not be repeated, and it is not only safe, but in their best interests to reinvest in the market?"
Hedgpeth also spoke to Joseph Stettinius, chief executive of Cassidy & Pinkard Colliers, a Washington-area commercial real estate firm. He would ask Geithner:
-- "What will the administration be doing to encourage a secondary market for commercial real estate mortgage debt in an effort to increase the volume of and appetite for [commercial mortgage-backed security] new issuances?"
-- "In order to provide relief to borrowers at risk of foreclosure, has the administration considered extending the term on mortgages in order to lower the payment to a borrower versus forgiving a portion of the principle or lowering the interest rate?"
From E. Hunt Burke, chairman and chief operating officer of the Burke & Herbert bank based in Alexandria, who spoke to The Post's Alejandro Lazo:
-- "Is it fair that a strong, well-managed community bank that has consistently operated in full compliance under FDIC regulations will now have to face a hefty increase in FDIC premiums in the near future to cover the cost of the losses from the mismanagement and poor lending decisions of other banks?"
-- "With respect to bankruptcy judges having the authority to cram down first deeds of trust on residential mortgages, is there concern that it will create economic incentives for persons to file bankruptcy who would otherwise not seek to do so?"
-- "Related to this, are you concerned that cram-downs on first trust mortgages will make mortgage loans less available to home buyers and more expensive because lenders will not want to incur the risk associated with making the loans and have the terms changes?"
-- "Should the largest financial institutions (mega-banks) be restricted from acquiring a larger percentage of the nation’s deposits than they already possess?"
Lazo talked to Hunter R. Hollar, former chief executive and current chairman of the board at Olney-based Sandy Spring Bancorp, who said that commercial banks are not at the root of the sub-prime lending crisis, housing downturn or recession. He is concerned that a new era of regulation might adversely affect institutions such as his. He would ask Geithner:
-- "How do you intend to keep already heavily regulated commercial banks from suffering under additional regulations?"
-- "Do you believe that free market principles can ever govern financial markets?"
-- "If they can, how?"
-- "If they can not, why not?"
Lazo also spoke to Brett McMahon, vice president of business development for Miller & Long concrete construction firm, based in Bethesda. His questions for Geithner:
-- "What is the appropriate balance of government spending to consumer spending in U.S. GDP?"
-- "Which should come first, raising wages or lowering unemployment?"
-- "This amount of government infrastructure spending is likely to adversely affect employment in localized, private-sector markets. That is, the stimulus spending will raise labor and material costs to the point where private market volume declines. Clearly there is a useful balance. At what point would you advocate a reduction of stimulus spending, and how would you measure it?"
The Post's Michael Rosenwald spoke to Seth Goldman, co-founder and TeaEO of Bethesda's Honest Tea:
-- "What will Treasury do to help support and expand the success of micro-enterprise in the developing world, as well as here at home? We've seen amazing results from local entrepreneurs in India and South Africa who are able to start up businesses with funds generated by our fair trade contributions."
-- "I'm also a skeptic on the bailout. We've just seen an earthquake in the financial markets. Isn't the bailout just rebuilding on the same ground, rather than moving to a different terrain?"
-- "Wearing my community investment hat (I'm a board member of the Calvert Foundation), I would like to ask what steps the Treasury will take to make sure that the mega-banks continue to invest in their local communities. We've just seen the two largest independent banks in Maryland get gobbled up, so how will Treasury work to ensure that there continues to be responsible lending to community-based organizations for housing and loan funds?"
Rosenwald spoke to Marriott chief financial officer Arne Sorenson, who asked:
-- "There has been a lot of talk about how to use the rest of the $350 billion in [bailout] funds. What will you recommend to President Obama about how to best use those funds, and what other steps would you recommend to further ease the credit markets and help drive the U.S. economy out of this recession?"
Rosenwald also spoke to Fred Malek, chairman and senior adviser at Thayer/Hidden Creek private-equity firm based in Washington:
-- "You were one of the architects and supporters of a [bailout/rescue] bill that has not achieved intended results, and credit markets remain largely frozen. What do you intend to do to encourage the flow of credit to support sound investments and growth?"
-- "What specific objectives do you have for the $825 billion stimulus package? Why do you think this is a better way to create jobs and reignite economic growth than providing incentives to business?"
-- "Other than World War II, which was borne of necessity, can you name any other instance in the U.S., or any country for that matter, where government spending and grants have revived a ailing economy?"
Posted by: bywb1949 | January 21, 2009 5:33 PM | Report abuse
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