CHICAGO (MNI) – U.S. Treasury Secretary Tim Geithner Wednesday
linked political cooperation to economic progress, saying Congress and
the White House must come together “to make tough decisions.”

Geithner, speaking to the Economic Club of Chicago, added his
emphasis on political cooperation to a speech otherwise very similar to
his March 15 address to the Economic Club of New York.

“No economy,” he said, “can be stronger over time than the ability
of its political leaders to come together to make tough decision.”

“We are a country of great strength and resilience,” he said. “We
have successfully navigated the most dangerous phase of the worst
economic crisis in generations.”

He continued, “We need to bring the same creativity and force and
sense of national purpose to the challenges ahead. And that will require
better choices from our political system.”

He repeated that business profits have recovered faster than growth
and unemployment rates and that Europe and gasoline prices remain a
current risk.

“Unemployment is very high, the housing market remains weak and
growth is not as fast as we would like,” he said. “These are tragic
legacies of the financial crisis.”

He blamed high gasoline prices in part on a “dangerous and
uncertain world,” and the weak growth momentum on “headwinds that follow
all financial crises.”

“There is a paradox in this, in that the changes necessary to
unwind the causes of the crisis and lay a more lasting foundation for
future growth necessarily slow the pace of expansion,” he said.

Still, he said, the United States has done “a better job than many
economies in making these adjustments.”

The effects of the earthquake in Japan “are receding” but “high
gasoline prices do remain a challenge for average Americans,” he said.
Also receding, he added, is the “state and local fiscal contraction” as
tax revenues have “started to rise with economic growth.”

With profits higher than before the crisis, business investment in
equipment and software up by 33% in two and a half years, exports ahead
by 24% in that period, and factory payrolls up more than 400,000 since
early 2010, he said is a sign that the “basic foundations of American
business” are not still in crisis or “undermined by taxes and
regulation.”

In fact, he said, “The challenges facing the American economy today
are not primarily about the vibrancy or efficiency of the business
community” but are instead about “the political constraints that now
stand in the way of better economic outcomes.”

“These challenges can only be addressed by government action to
help speed the recovery and repair the remaining damage from the crisis
and reforms and investments to lay the foundation for stronger future
growth,” he said.

** MNI Chicago Bureau: 708-784-1849 **

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