Past time for Geithner to go

Here's hoping this latest revelation about Timothy Geithner brings a rapid end to his tenure as Treasury secretary:

The Federal Reserve Bank of New York, then led by Timothy Geithner, told American International Group Inc. to withhold details from the public about the bailed-out insurer’s payments to banks during the depths of the financial crisis, e-mails between the company and its regulator show.

AIG said in a draft of a regulatory filing that the insurer paid banks, which included Goldman Sachs Group Inc. and Societe Generale SA, 100 cents on the dollar for credit-default swaps they bought from the firm. The New York Fed crossed out the reference, according to the e-mails, and AIG excluded the language when the filing was made public on Dec. 24, 2008. The e-mails were obtained by Representative Darrell Issa, ranking member of the House Oversight and Government Reform Committee.

The New York Fed took over negotiations between AIG and the banks in November 2008 as losses on the swaps, which were contracts tied to subprime home loans, threatened to swamp the insurer weeks after its taxpayer-funded rescue. The regulator decided that Goldman Sachs and more than a dozen banks would be fully repaid for $62.1 billion of the swaps, prompting lawmakers to call the AIG rescue a “backdoor bailout” of financial firms.

“It appears that the New York Fed deliberately pressured AIG to restrict and delay the disclosure of important information,” said Issa, a California Republican. Taxpayers “deserve full and complete disclosure under our nation’s securities laws, not the withholding of politically inconvenient information.”[...]

Barney Frank, a Massachusetts Democrat and chairman of the House Financial Services Committee, said the e-mail exchanges were “troubling” and that he supports holding congressional hearings to review them.

I've been hoping for the last year that President Obama would ditch Geithner sooner rather than later. The president didn't react to the November report from the Office of the Special Inspector General for the Troubled Asset Relief Program, which slammed Geithner's conduct during the AIG bailout. But it's clear that Geithner wasn't looking out for the public interest in his last job and never should have been promoted to his current position.

Tags: Barack Obama, Obama Cabinet, Timothy Geithner, AIG (all tags)

Comments

10 Comments

Appeasement

I never understood the politics of keeping Geithner on.  The whole thing came off as a way to appease Wall Street and avoid rocking the boat.

by Kyle Shank 2010-01-07 09:34PM | 0 recs
The Cossacks work for the Tsar.

It’s really very simple:  The Cossacks work for the Tsar.

by Mitch Guthman 2010-01-07 09:48PM | 1 recs
RE: Past time for Geithner to go

Democrats keep blowing it. Good riddance to Dodd(even if he was nowhere as bad as Geithner), and now Obama trusts Geithner so much. How can our party be so freaking dumb? And we have the audacity to bash the Naderites. If Obama is not dumb enough to keep Geithner for so long, maybe people wouldn't be tempted to either vote third party or stay home and not vote. I have not trusted this weasel from Day 1 . Isnt this proving a guy like NAder right? Both parties in cahoots with money?Sure the republicans are worse, but when Obama's admin is bad enough, who really cares about the level of indifference to what is fair?  Explain to me how this statement has been proven false with the Democrats in power.  It's been a year since the Democrats controlled the entire power structure and we still not have a single meaningful financial reform implemented. What excuse does our party have now? Until now, we blamed Bush. How much better is our party that sells out? Madoff has been plying his scam even before Bush. And even if the Democrats come up with some measures, are they going to fire auditors when they fail to capture the Bernie Madoffs of the world? Last time I checked, some of this fraud started in the Clinton era and a lot of it predated him too.

 

We just give easy excuses for the Republicans to divert tthe masses attention from their culpability in this financial mess. If Obama does not clean up his act, I am not voting for him in 2012. I will write in whoeever the hell I please. So far, my life has not been better off even though the imbecile Bush is gone and we control the White House, the senate and the House of Reps.

by Pravin 2010-01-07 10:42PM | 0 recs
RE: Past time for Geithner to go

Despite this, why am I still noconsidering becming  a Republican? At least Barney Frank asked for an investigation. I dont know if any republicans were trying to investigate Bush appointees. Well, maybe Hagel, i am not sure.

by Pravin 2010-01-07 10:46PM | 1 recs
typo: i meant :NOT considering becoming a republican

Typo in last reply

by Pravin 2010-01-07 11:21PM | 0 recs
Cenk of Young Turks wonders why right wing media is soft on Tim

http://www.huffingtonpost.com/cenk-uygur/why-is-fox-news-leaving-g_b_415883.html

by Pravin 2010-01-08 08:55AM | 0 recs
RE: Cenk of Young Turks wonders why right wing media is soft on Tim

Easy, it's the same reason that they go easy on derivatives,  they don't understand them.  Nor can they find a simple way to explain what he is saying, therefore they put him on ignore and soft questions.

It's really quite smart on his part, get technical and loose the reporters. 

by NvDem 2010-01-08 12:05PM | 0 recs
This isn't just about Geithner

Go to the next question, who is the alternative, who replaces him?  Do progressives as a group lobby for someone like a Krugman (to see a hold put on that nomination by Lieberman, just to piss off the left) as a replacement?

I am frankly, tired of our bloviating to keep booting people out without alternatives.  Let's settle on a replacement (or at least 2 to 5) and then present alternatives.  Too many times, the replacement is worse than the predecessor.

by NvDem 2010-01-08 12:01PM | 0 recs
RE: This isn't just about Geithner

How did Bush get his appointees through? Even without Lieberman, we have more senators than Bush did.  And yes, I am sure there is at least one non-liberal finance guy who is ethically good enough to hire as Treasury Secretary and who would be palatable to the republicans like Snowe, if it comes down to that. If Lieberman objects even for this, at some point blame Obama for not kicking him out of his chairmanship via surrogates inthe senate. Lieberman's leverage only lies in each instance of catipulation by the Obama people. 

It's not just liberal who can't stand Timmah. Conservatives hate him too.

I am beginning to wonder if Paul H O Neill, the first Bush Treasury guy wouldn't be a better choice than Timmah. At least, he seems to have more ethics.

by Pravin 2010-01-08 03:41PM | 0 recs
Alternative? Dorgan

http://www.huffingtonpost.com/2009/05/11/glass-steagall-act-the-se_n_201557.html

"

The footage of him speaking on the Senate floor has become something of a cult flick for the particularly wonky progressive. The date was November 4, 1999. Senator Byron Dorgan, in a patterned red tie, sharp dark suit and hair with slightly more color than it has today, was captured only by the cameras of CSPAN2.

"I want to sound a warning call today about this legislation," he declared, swaying ever so slightly right, then left, occasionally punching the air in front of him with a slightly closed fist. "I think this legislation is just fundamentally terrible."

The legislation was the repeal of the Glass-Steagall Act (alternatively known as Gramm Leach Bliley), which allowed banks to merge with insurance companies and investment houses. And Dorgan was, at the time, on a proverbial island with his concerns. Only eight senators would vote against the measure -- lionized by its proponents, including senior staff in the Clinton administration and many now staffing President Obama, as the most important breakthrough in the worlds of finance and politics in decades."

I am not saying you heard it here first, because I picked this idea up from some other blogger yesterday (though who I don't remember). But the idea that the Dorgan retirement has been coordinated with a replacement of Geightner is not crazy, though it would also imply letting Geightner stay on until the elections. Although I suppose (and hope) hey could replace Geightner with an acting Secretary while letting it be known that Dorgan's name would be advanced in due time. As I think about it that might even give Dorgan a little more clout in the financial services debate to come.

Another alternative would be Goolsbee who was as head of the Obama economic team in the campaign was rumored to have the inside track for Treasury before Summers came on board and maybe muscled Geightner ahead of Austan. Goolsbee is a little conservative for my taste but is at least not quite the Wall Street whore the rest of the Rubinistas are. At least we could be reasonably sure where his loyalties would be.

As to Krugman I believe he himself has said he doesn't have the temperment for the job.

by Bruce Webb 2010-01-09 01:42PM | 0 recs

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