A little reading …

• The Times of India, US has huge stake in closer ties with India: Geithner“
• The Hindu, “Geithner spells out India visit prospects“
• Hindustan Times, “India visit aimed at strengthening ties: Geithner“
• Sify, “India trip, a homecoming for Geithner“
• Times of India, “Geithner, US monetary maven, says India’s economic policy is admirable“
• Business Standard, “‘Living in India as a kid is great gift to me’“

The National Association of Manufacturers joined 170 businesses and organizations (and that’s a lot by coalition letter-writing standards) in sending  a letter to Congress to urge members to preserve the ability of companies to use over-the-counter (OTC) derivatives to manage their risk. (Here’s a copy.)

In May the Department of Treasury proposed new regulations of OTC derivatives (Secretary Geithner letter) to address concerns about the stability of financial markets. Congress has held hearings as well.

The Coalition for Derivatives End-Users, which sent the aforementioned letter, supports efforts to improve transparency, accountability and stability in the derivatives market. But the concern is the proposals would significantly increase costs for companies seeking to hedge risks through OTC products, limiting or even eliminating eliminate products needed for risk management.

Leaders of the U.S. Chamber, Business Roundtable, and NAM are all quoted in the news release that went out announcing the letter. To wit:

“Manufacturers in a wide range of industries use customized OTC derivatives to manage the risks of operating their businesses, including fluctuating currency exchange, interest rates and commodity prices. It is critical that policy makers ensure companies’ continued access to OTC derivatives, providing them with greater financial certainty and allowing them to allocate resources to core business activities,” said John Engler, President of the National Association of Manufacturers.

UPDATE (4:15 p.m.): The obvious peg is a House Financial Services Committee hearing next Wednesday, “Reform of the Over-the-Counter Derivative Market: Limiting Risk and Ensuring Fairness.”

We made a mistake by omitting this hearing in Monday’s “Dispatch from the Front,” Shopfloor.org’s look at the week ahead. The possibility of regulatory overreach on over-the-counter derivatives  is a major concern of large companies and manufacturers who want to maintain access to domestic capital.

So here is Treasury Secretary Geithner’s testimony today to a joint hearing of the House Finance and Agriculture Committees, “A Review of the Administration’s Proposal to Regulate the Over-the-Counter Derivatives Market.” Geithner:

In designing its proposed reforms for the OTC derivative markets, the Administration has attempted to achieve four broad objectives:
* Preventing activities in the OTC derivative markets from posing risk to the stability of the financial system;
* Promoting efficiency and transparency of the OTC derivative markets;
* Preventing market manipulation, fraud, and other abuses; and
* Protecting consumers and investors by ensuring that OTC derivatives are not marketed inappropriately to unsophisticated parties.

Good goals, one reckons. Although “inappropriate” is such a weasel word.

Noel Sheppard of Newsbusters.org comments on today’s Washington Post/ProPublica joint reporting proejct we wrote about here.  In his post, “WaPo Collaborates on Front Page Piece With Far-left ProPublica,” he makes a point we should have noted, as well, that the story itself — “As Crisis Loomed, Geithner Pressed But Fell Short” — an examination of Geithner’s time at the New York Fed, seems solid.

We followed the reporting of ProPublica’s Jeff Gerth on Chinese espionage when he was at the New York Times and thought it important journalism.  But, as Sheppard writes: “Of greater concern is the precedent established here, and the possibility that this far-left leaning outlet will get more of its work published by major mainstream entities like the Post.”

The Post’s disclosure also warrants a comment:

This article was reported jointly with ProPublica, an independent, non-profit newsroom that produces investigative journalism in the public interest. ProPublica is supported entirely by philanthropy and provides the articles it produces, free of charge, both through its own Web site and to leading news organizations.

Supported entirely by philanthropy sounds quite nice, but in a story about financial regulation, readers might like to know that the philanthropy is that of Herb and Marion Sandler, billionaire former owners of a California savings and loan. Golden West naturally had extensive dealings with its regulator, the Office of Thrift Supervision, including on such relevant issues as risk-based capital. You would never know that from the Post’s non-transparent disclosure.

From Reuters, “US Treasury secretary attacks oil, gas tax breaks“:

WASHINGTON, March 4 (Reuters) – U.S. oil and natural gas producing companies should not receive federal subsidies in the form of tax breaks because their businesses contribute to global warming, U.S. Treasury Secretary Timothy Geithner told Congress on Wednesday.

It was one of the sharpest attacks yet on the oil and gas industry by a top Obama administration official, reinforcing the White House stance that new U.S. energy policy will focus on promoting renewable energy sources like wind and solar power and rely less on traditional fossil fuels like oil as America tackles climate change.

Because the markets need another dose of confidence-building rhetoric about now.

These populist attacks against wealth creators, you expect them during a campaign. Regrettable, but that’s politics. But from a top Administration official in the middle of a deep recession?

In any case, if carbon dioxide is now a pollutant, then EVERYTHING contributes to global warming, including the middle class. So no tax cuts for you!

More Geithner…

Geithner said the additional taxes “can be absorbed” by the oil and gas companies, given the billions of dollars they have earned from high energy prices.

“The impact of these subsidies are very small relative to revenues produced by U.S. oil and gas producers,” he said.

So, in effect, a windfall profits tax. How did that work?

As a matter of principle, or at least sentiment, the view around here is that winners of executive-branch elections get to choose whom they want on the roster of administration appointees. Still, it’s a good thing when these appointees are highly qualified, experienced and operate in a world of reality rather than utopia. So…

NAM President and CEO John Engler: “In the present environment, it is critically important that the President-elect convey a clear message that his Administration will be in place and ready to proceed on day one. Geithner, Summers and Romer bring with them extensive experience dealing with complex economic issues and track records of success in difficult situations. They are well qualified to contend with today’s economic challenges and provide the leadership we need to get our economy growing again.”

Larry Kudlow, CNBC, in National Review Online: “Here’s my thought on his team. Summers, Geithner, and Romer will all recommend no tax hikes in a recession. Maybe for Keynesian reasons; maybe a nod to supply-siders. Obama talked about a liberal-conservative consensus. But what’s especially encouraging is the appointment of Ms. Romer, who easily could serve as CEA head in a Republican administration (just like Geithner could have been McCain’s Treasury man).”

E.J. Dionne, Washington Post: “President-elect Barack Obama has now made three things clear about his plans to bring the economy back: He wants his actions to be big and bold. He sees economic recovery as intimately linked with economic and social reform. And he is bringing in a gifted brain trust to get the job done.”

Noam Scheiber, The New Republic: “I was thrilled to hear yesterday about the dream-team pairing that will make Geithner Treasury Secretary and Summers a top White House adviser. Geithner is one of the most able technocrats to have risen through Treasury’s ranks, which makes him the perfect pick to run its sprawling bureaucracy; Summers is one of the top two or three economic minds of his generation, which makes him a guy you want in the room with the president.”

All these statements came before the President-elect’s announcement today of Peter Orszag as his director of the Office of Management and Budget, another appointment of a highly respected, mainstream economic expert.