The U.S. Treasury Secretary Timothy Geithner says the unemployment rate may go above its current 25-year high of 8.5 percent, but says the United States and other countries must keep moving forward in making steps toward economic recovery.
Treasury Secretary Timothy Geithner says there are some encouraging signs about the economy, but he was quick to temper expectations. Geithner says the typical pattern of an economic turnaround dictates that only when businesses start to hire again will there be a peak in unemployment.
Geithner, who appeared on CBS' "Face the Nation" program, called it the "crude reality" of recoveries. "It took us a long time to get here. It is going to take some time for us to work through this. Progress is not going to be even. There is going to be a period where it is going to feel very bad still and very uncertain. And that is again why it is so important that we just keep moving," he said.
Secretary Geithner pointed to mortgage interest rates being at their lowest in history as a positive development. He says this will allow U.S. homeowners to take advantage of the low rates and refinance their homes.
Geithner also defended President Barack Obama's decision last week to oust the chairman of ailing U.S. automaker General Motors. Critics accused the Obama administration of holding a double standard by being more lenient on financial institutions also receiving federal assistance.
Geithner said there will be strong conditions for any company requiring additional taxpayer money. "If in the future, banks need exceptional assistance in order to get through this, then we will make sure that assistance comes with conditions, not just to protect the taxpayer, but to make sure this is the kind of restructuring necessary for them to emerge stronger. And where that requires a change of management of the board, we will do that," he said.
Geithner noted the government overhauled the boards of mortgage giants Fannie Mae and Freddie Mac and insurance company AIG.
Geithner says he wants to help General Motors do whatever works to restructure, even if it means filing for bankruptcy, and emerge stronger from the recession.
New GM chief Fritz Henderson agreed, saying bankruptcy might be the best alternative. "As I look at the situation, we need to accomplish a set of goals, and accomplishing those ... cannot be compromised. So if it cannot be done outside of a bankruptcy process, it will be done within it," he said.
Henderson, appearing on NBC, said General Motors is building a plan around four core brands and hopes to improve the quality of its vehicles to regain the confidence of the American consumer.