Play it straight, Tim

Treasury Secretary Timothy Geithner hit some false notes in his media blitz.

In addition to tempting fate with his assertion that neither foreclosures, bad commercial real estate loans nor high unemployment would send the economy back into freefall, Geithner also appeared to contradict himself on the reasons for a contraction in commercial lending.

In an interview that aired on National Public Radio, Geithner urged banks to take on more risk by making more loans, saying, "Right now the real risk we face is that banks are not lending enough and are not going to provide the capital businesses need to grow. The real risk is the pendulum having been too soft and easy on the lending side. Right now the risk is that banks overcorrect or that supervisors overcorrect and that's something we need to lean against."

But in an interview with Newsweek, the Treasury Secretary said the decline in lending does not reflect badly on the administration's handling of the financial crisis. “I've got lots of weaknesses and failures of communication, but I always tried to say that the capacity to lend will be much stronger because of these [rescue] efforts," he said in the interview. "In recessions, loan demand falls, and in recessions that follow big financial booms it's going to fall more than usual. You can't view that as an indication of whether policy is working. “

That's a far cry from the message President Obama has been sending, although economists and even some small-business advocates would say that a lending revival hinges on borrowers, not lenders. Certainly that's the message that community bankers took to their meeting with President Obama Tuesday.

Geithner also defended his frequent interactions with big banks, tellling NPR that he also spends as much time as possible speaking to businesses across the country, including small banks, small businesses and community leaders in parts of the economy that are hurt.

"I have to spend time figuring out what it's going to take to fix things that are broken in the financial system and that requires spending time with the leaders of the nation's major institutions. There's no way anyone can do this job without doing that."

Fair enough. But it's hard to believe the U.S. Treasury Secretary logs anywhere near as much time on the phone talking to community banks about overzealous regulation or the creditworthiness of borrowers as he does negotiating Tarp repayments with Citigroup or Bank of America.

BankThink is a collective byline used by American Banker editors to make observations and weigh in on big ideas shaping the industry.