Paul Krugman wrote this email to Greg Levine in December of 2008. Krugman's view of Geithner has grown harsher. Krugman savaged Geithner's book "Stress Test" in a colulm titled Springtime For Bankers. The title is a play on the song Springtime For Hitler from The Producers.
Krugman's review of Stress Test.
One reason for sluggish recovery is that U.S. policy “pivoted,” far too early, from a focus on jobs to a focus on budget deficits. Mr. Geithner denies that he bears any responsibility for this pivot, declaring “I was not an austerian.” In his version, the administration got all it could in the face of Republican opposition. That doesn’t match independent reporting, which portrays Mr. Geithner ridiculing fiscal stimulus as “sugar” that would yield no long-term benefit.
It is fascinating how Krugman has soured on Geithner. Krugman was correct that President Barack Obama was never an economic progressive.
Revisiting the Financial Crisis: Why Did Federal Reserve of New York Resign Deloitte?
In February of 2007, the Federal Reserve of New York board extended the contract of international auditing company Deloitte Touche Tohmatsu Limited. Future Treasury Secretary Tim Geithner was President of the New York Fed at the time.
This is from a highly redacted press release of the yearly minute of Fed of New York meetings that I posted yesterday
Ms. Considine, Chair of the Audit Committee, reported that the Audit Committee had reviewed and approved the Reports of Audit Activities (# ) at the Bank during December 2006 and January 2007. Ms. Considine stated that the Committee had approved a request by the Bank’s Chief Compliance Officer to maintain an existing contract with Deloitte & Touche to provide consulting services related to the establishment of the Bank’s Compliance program after Deloitte & Touche becomes the Bank’s external auditor. She observed that the Bank’s control environment continued to be satisfactory, that no unfavorable audit opinions had been issued, and that the Bank’s Sarbanes-Oxley work was on track. She reported that the qualifications of the Audit Committee members had been reviewed and that Mr. Wait was designated as the Committee’s financial expert. Ms. Considine noted that the Committee also received presentations on the Bank’s Quarterly Operations performance and the Bank’s Ethics Program before going into a series of Executive Sessions, from which there were no issues that required the attention of the full Board of Directors.
I quick review of Deloitte on Wikipedia finds that the auditing agency has a history of incompetence and accusations of auditing fraud.
Adelphia Communications Corp. cable television company. The comany filed for Chapter 11 bankruptcy in 2002. Founder John Rigas and his son Timothy Rigas were convicted on 15 counts securities fraud.
The Rigases and Mulcahey were charged with hiding $2.3 billion in debt at the cable company, deceiving investors and stealing company cash to line their own pockets.
The children of John Rigases spent money lavishly on their lifestyle and personal projects. The Rigases family was moving money out of Adelphia and into other family owned businesses. The auditing company that was helping hide the money was Deloitte. The Securities and Exchange Commission settled with Deloitte for a $50 million fine. Deloitte's accounting on Adelphia was less than stellar.
Deloitte ran into problems in China in 2006. The China Securities Regulatory Commission and investors.
A source close to the China Securities Regulatory Commission (CSRC) revealed that it would likely hold an administrative hearing on April 7 to investigate the firm's role in a 2005 scandal involving Chinese refrigerator maker Guangdong Kelon Electrical Holdings Co, a former Deloitte client.
At the same time, a lawsuit was brought to Huangpu District Court in Shanghai on Wednesday, claiming Kelon investors had suffered losses because Deloitte issued unqualified financial reports while auditing Kelon's finances in 2004.
If the accusation is accepted next week, Deloitte will face trouble from both the court and the industry regulator.
In 2011, Deloitte was accused of fraud from short sellers in China. Forbes reports that the scandal made Deloitte resign from their services to Boshiwa International, Daqing Dairy, China Media Express and Longtop Financial.
With over 150 years of history and a truly global presence, Deloitte is arguably the most confidence-inspiring and relied-upon auditor in the world. However, Deloitte’s booming business in China has created significant headaches for Deloitte’s global brand. After an aggressive push into China, Deloitte now boasts more Hong Kong- and U.S.-listed Chinese public clients than any other auditor. But Deloitte was also the auditor of record for some of China’s biggest fraud implosions. With both China Media Express and Longtop Financial, many investors felt that the Deloitte stamp of approval on prior years’ financial statements meant that substantial fraud was a near impossibility. Deloitte’s abrupt resignation from both companies following short-seller accusations of fraud made the financial losses for investors that much more painful to accept.
Since the 2007 Federal Reserve of New York resigning Deloitte the auditing agency has been accused of fraud on numerous occasions. The most serious is the New York state Department of Financial Services claiming that Deliotte helped Standard Chartered money launder for Iran.
The DFS said that one senior Deloitte partner admitted that he “watered down” a report compiled for the regulator because the situation was too politically charged.
The New York regulator also claimed that in 2005 Deloitte “unlawfully” gave the British bank confidential reports that it had prepared for two other foreign banks, also under investigation for money-laundering activities.
Deliotte does more than just basic accounting. I wonder what kind of financial reports did Deliotte (if any) did they do for the Fed of New York before the financial crisis of 2008. Looking back it seems like poor judgement for Tim Geithner to retain the services of Deliotte.
Revisiting the Financial Crisis: Why Was Page of Federal Reserve of New York Page Redacted?
The Federal Reserve of New York had a meeting on January 4, 2007. Tim Geithner was the President of the Federal Reserve of New York at the time. What is redacted is what the participants of the meeting discussed. I'm not a conspiracy theorist but this strikes me as odd. Anyone have any idea what was redacted and why?
The same thing happens again on page 5 of the minutes of the meeting.
There are several more redactions on what was discussed during this meeting. What the hell did Geithner not want the public to know?
I am not a subscriber to Time. Therefore I can't read the entire interview with new Federal Reserve chair Janet Yellen. I did find her remarks on Dodd-Frank fascinating.
"I think Dodd-Frank is good roadmap and lays out most of the steps that are necessary. But we may also need to take some further steps that have not been taken yet."
I can't imagine Yellen getting appointed as Federal Reserve chair when Tim Geithner was Treasury Secretary. Geither was successful in derailing Elizabeth Warren's nomination. Geithner would have a heart attack if he heard a Federal Reserve chair advocate for more financial reform.
I wonder how much of the comtempt of the federal Reserve from Republican economic policymakers is rooted in the writings of Milton Friedman. Case in point is David Stockman.
A recurring theme of Stockman’s work is that it is precisely these efforts that have sown the seeds for all that ails the economy. He writes in the Times: “As the federal government and its central-bank sidekick, the Fed, have groped for one goal after another — smoothing out the business cycle, minimizing inflation and unemployment at the same time, rolling out a giant social insurance blanket, promoting homeownership, subsidizing medical care, propping up old industries (agriculture, automobiles) and fostering new ones (“clean” energy, biotechnology) and, above all, bailing out Wall Street — they have now succumbed to overload, overreach and outside capture by powerful interests.”
Friedman was highly critical of the Federal Reserve allow the dollar to deflate and not acting fast enough to stop the crash of 1929.
The first bank runs started in 1930. Banks did not have enough revenue to cover businesses and customers withdrawing money. Friedman is correct about the Federal Reserve acting too slow.
Friedman made it popular for conservatives to hate the Federal Reserve. However, Stockman argues that Friedman is wrong. Friedman rightly stated that the Federal Reserves not giving the banks a cash injection in 1929 was wrong. Stockman argues against the selling of Treasury bonds.
“During the four decades since the gold window was closed – the rules of the game have been profoundly altered. Specifically, under Professor Friedman’s contraption of floating paper money, foreigners may accumulate dollar claims or exchange them for other paper monies. But there can never be a drain on US monetary reserves because dollar claims are not convertible. This infernal regime of fiat dollars, therefore, has had numerous lamentable consequences but among the worst is that it has facilitated open-ended monetization of US government debt.” ibid.
Does Stockman actually want to go back to the gold standard? The man has lost his mind.
Hank Paulson, Tim Geithner and Ben Bernanke allowed Lehman Brothers to fall. The three even urged Lehman Brothers to file for bankruptcy. The result was an international economic crisis. International financial institutions froze credit after Lehman Brothers fell. Paulson went to Congress to get TARP passed and bailout AIG and the too big to fail banks. Stockman would have let AIG and the banks fail. The result would have been an economic crisis worse than the Great Depression. I am no fan of the way Paulson, Bernanke and Geithner handled the 2008 financial crisis. However, what Stockman is advocating is anarchy.
Tim Geithner was president of New York Federal Reserve and Ben Bernanke was chairman of the Federal Reserve in 2008. President Obama appointed Geithner ad Treasury Secretary. Obama later reappointed Bernanke to the Federal Reserve in 2010. Was this Obama's "Brownie, you're doing a heck of a job" moment?
Secretary of Treasury Tim Geithner tells CNBC that the Obama administration will go over the fiscal cliff if taxes aren't increased on the top 2 percent.
Side note: it is interesting to see that Republicans are running away from their austerity deal they imposed on President Obama. The cuts are what Republicans previously agreed to. We now know that these cuts are too drastic and could lead to another recession. This is what is going on in Europe with failed austerity policies.
This is the biggest failure of President Obama. The red line represents corporate profits. The blue line is wages. The corporate world has done well after the 2008 Wall Street crash. Wages have not kept up with cost of living expenses. Obama spent much of his first-term with an addictive need to be centrist. Sec. of Treasury Tim Geithner viewed aid for the middle class with contempt.
The economic team went round and round. Geithner would hold his views close, but occasionally he would get frustrated. Once, as [then chairwoman of the Council of Economic Advisers Christina] Romer pressed for more stimulus spending, Geithner snapped. Stimulus, he told Romer, was “sugar,” and its effect was fleeting. The administration, he urged, needed to focus on long-term economic growth, and the first step was reining in the debt.
Austerity measures would only strengthen a recession during an economic downturn. Economists Carmen M. Reinhart & Kenneth S. Rogoff predicted the economic crisis and that policymakers would hurt the recovery by implementing austerity policies. Geithner is too stupid to be Treasury Secretary.
I like to see how Obamabots frame this. Huffington Post reporter Shahien Nasiripour cites sources that the Obama administration never had any intention of nominating Elizabeth Warren for the Bureau of Consumer Financial Protection. In 2010, Sen. Bernie Sanders asked President Barack Obama if would nominate Warren.
Last summer, during a White House meeting with first-term Senate Democrats, Sen. Bernie Sanders, an independent from Vermont, asked Obama whether he'd nominate Warren for the role.
Obama held up a half-full glass of water and told him: "That's the problem with you progressives. You see this as half-empty."
Obama's tone towards Sanders makes it obvious that the president does not view himself as a progressive. Wall Street got a bailout. Americans are being foreclosed upon through illegal means. The President campaigned on change and gets pissed when people call him out for protecting the dysfunctional financial system.
Rahm Emanuel made it clear that he did not want Warren confirmed.
Last July, the night before a Senate vote on the administration-backed bill to reform financial regulation, Sen. Ben Nelson (D-Neb.) told reporters that he was still unsure how he’d vote and was concerned about who might be named to run the soon-to-be-created consumer unit.
Hearing the news, Emanuel took the temperature of the administration on Warren's nomination and reported back to Senate Majority Leader Harry Reid that it was cool, according to Senate sources with knowledge of the call.
“We don’t like her either,” the then-White House chief of staff told the Nevada Democrat.
Ben Nelson's lack of support was unsurprising. Chris Dodd. Part of Dodd's problem was Warren publicly pushed back against Dodd to not soften the financial reform bill. Dodd was obsessed with getting bipartisan support for a financial reform bill that no Republican had any intention of voting for. What is it about Beltway Democrats that are obsessed with bipartisanship?
Treasury Sec. Tim Geithner is pro-corporatist. It wasn't surprising that he didn't support Warren's nomination. Warren also took Geithner to task for not knowing where money for credit default swaps went. AIG sold swaps and then couldn't cover the bets when the market crashed.
Treasury Department General Counsel George Madison laughably tells the New York Times editors that Sec. Tim Geithner never said that Section 4 of the 14th amendment forbids the the executive branch from paying its debt.
The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.
Except that is exactly what Geithner said in the video below. Geithner even bookmarked the 14th amendment with a paperclip.
GEITHNER: "So as a negotiating strategy you say: 'If you don't do things my way, I'm going to force the United States to default--not pay the legacy of bills accumulated by my predecessors in Congress.' It's not a credible negotiating strategy, and it's not going to happen."
Madison's letter to the New York Times editors.
To the Editor:
Contrary to Professor Laurence Tribe’s assertion (Op-Ed, July 8), Secretary Geithner has never argued that the 14th Amendment to the U.S. Constitution allows the President to disregard the statutory debt limit. As Professor Tribe notes, the Constitution explicitly places the borrowing authority with Congress, not the President.
The Secretary has cited the 14th Amendment’s command that “[t]he validity of the public debt of the United States… shall not be questioned” in support of his strong conviction that Congress has an obligation to ensure we are able to honor the obligations of the United States. Like every previous Secretary of the Treasury who has confronted the question, Secretary Geithner has always viewed the debt limit as a binding legal constraint that can only be raised by Congress.
Sincerely,
George W. Madison General Counsel
The point is America has never had to deal with a Congress willing to default. There is no real legal guideline. Other than the government must pay its debts.
What is illogical of the Jim Demint position is it would actually give the executive branch greater power. The Treasury Department would decide which debts are paid or left unpaid. The government would go into greater debt by missing payments to financial institutions and lose its AAA credit rating. This isn't a conservative position DeMint is proposing. It is anarchy.
Ezra Klein pointed out that the federal government cuts millions of checks every month. Treasury would have to decide who gets paid. Treasury has never had to handle such a workload.
Politically, Geithner and the Obama administration is signaling that they won't play hardball with the Republicans. This should as a surprise to no one.
Reading Treasury Secretary Tim Geithner's letter to Jim DeMint is horrifying. Geithner has to explain basic economics to DeMint as if he was a child. It is painfully obvious that DeMint is incredibly stupid. Demint believes that the country can run without raising the debt ceiling. DeMint proposes only paying the interest back to banks. Geithner explains that the federal government borrows 40 cents for every dollar. There will will future financial obligations, in terms of loans and budget priorities in legislation that has already been passed.
DeMint believes the Treasury Department runs like his credit card. Just stop using it and everything is okay. If DeMint failed to pay his mortgage and auto insurance, he would be homeless and unable to drive. The federal government would not have enough revenue to fund its military operations in Afghanistan, Libya and Iraq. The fedral government would likely shut down. I wonder how DeMint would feel when he doesn't receive a paycheck.
Geithner explaining DeMint's factual errors to him.
Back in January, Bloomberg reported President Barack Obama made a speech about lowering the corporate tax rate. The New York Times reports Treasury Sec. Tim Geithner is working on lowering the corporate tax rate from 35 percent to 26 percent.
Gene Sterling, director of the National Economic Council goes in full sellout mode.
"The question is, Is the business community going to support this because it's a win for the economy over all?" said Gene Sperling, director of Mr. Obama's National Economic Council. "Or, is it going to get held up because each business will decide whether they're a temporary winner or loser compared to the status quo?"
It is harder to see everyday how Obama is the lesser evil than the Republicans.
Three months from now we won't hear anything about the Gas Commission investigation. Anyone really believes the Justice Department will prosecute an energy company. There hasn't been a major SEC investigation of any of the major financial institutions involved under President Barack Obama's watch. These companies needed bailout money because they hid their losses through off-the-books accounting practices. The New York Federal Reserve withheld announcement of a AIG credit swap exchange with.
"Do you think it might be feasible to hold off on the Maiden Lane III 8K and press release until next week?" Brett Phillips, a New York Fed lawyer wrote in an e-mail [to AIG counsel]. "The thinking is that the Maiden Lane III closing will be a less transparent event, and it might be better to narrow the gap between AIG's announcement and the New York Fed's publication of term sheet summaries."
Former New York Reserve chairman Tim Geithner was paying AIG 100 cent on the dollar of taxpayer money. No interest was charged. Geithner then went on to become Treasury Secretary.
I have no faith in the Obama administration cracking down on energy companies.
Update: another reason I doubt the White House will crack down is because it purposely sent out bogus numbers on the BP spill.
On 4 August, Jane Lubchenco, the NOAA administrator, demanded that the White House issue a correction after it claimed the "vast majority" of BP oil was gone from the Gulf.
A few days earlier, Lisa Jackson, the head of the EPA, and her deputy, Bob Perciasepe, had also objected to the White House estimates of the amount of oil dispersed in the gulf. "these calculations are extremely rough estimates yet when they are put into the press, which we want to happen, they will take a life of their own," Perciasepe wrote.
The financial crisis and Gulf spill gave the White House the opportunity to do the right thing. The White House felt protecting corporate interests is more important than the environment or taxpayers. The Obama administration bleeds neoliberal. People should stop kidding themselves that Team Obama is most concerned about the people.
Neil Barofsky was the inspector general of the Troubled Asset Relief Program from 2008 until March 30, 2011. Barofsky declared TARP a "failure." Barofsky accused Sec. of Treasury Tim Geithner of refusing to protect homeowners and reform financial institutions. These accusations are coming from someone who was in charge of oversight of TARP.
Treasury Secretary Timothy Geithner has acknowledged that the program "won't come close" to fulfilling its original expectations, that its incentives are not "powerful enough" and that the mortgage servicers are "still doing a terribly inadequate job." But Treasury officials refuse to address these shortfalls. Instead they continue to stubbornly maintain that the program is a success and needs no material change, effectively assuring that Treasury's most specific Main Street promise will not be honored.
The "Main Street" promise is to keep Americans from losing their homes. Geithner and President Obama won't lift a finger to help homeowners. They will support the Federal Reserve buy toxic mortgages from banks. Americans are being forced into homelessness by banks setting up rocket docket courts around the country.
Geithner has also allowed banks to repay meney owed to TARP by tapping into the small bussiness fund. Banks are repaying money owed with taxpayer money meant to be used to give loans to small businesses. Small businesses end up not getting the loans they desperately need.
The Obama administration is a DINO administration. Americans are suffering and their only priority is protecting financial institutions responsible for the 2008 crash.
According to Politico, Nancy Pelosi told Obama House Democrats will not back tax cuts for those earning over $250,000. Obama know Reid backs extending all the Bush tax cuts. Obama told Reid, in front of Pelosi, to work on his own tax cut package. Short answer: Obama caved on high end tax cuts that poll badly with the American people.
Tim Geithner and Lawrence Summers were at the meeting with Obama, Pelosi and Reid. Want to take a wild guess on if they support extending the Bush tax cuts for those making above $250,000?
A CBS News poll found 56 percent support letting the tax cuts for $250,000 and above earners expire. A NBC News/Wall Street Journalpoll gave respondents four choices. Letting tax cuts for top earners was the most popular choice.
Eliminate all the tax cuts permanently: 10
Eliminate the tax cuts for those earning more than $250,000 per year, but keep them for those earning less than that: 39
Keep in place all the tax cuts for everyone for another year to three years: 23
Keep in place the tax cuts for everyone permanently: 23
This maintains my premise that Obama is not a policy wonk. The deficit commission was merely a bad dog and pony show. Obama used the defict commission so he could make claims of being bipartisan and and wanting to reduce the deficit. Obama's deficit commission reads like a horrible policy paper from the Cato Institute. (I should know since I have forced myself to read too many nutty papers.) Obama can't truly be interested in reducing the deficit if he allows the tax cuts for top earners to continue.
Update:Greg Sargent reports that Steny Hoyer backs holding a vote extending tax cuts for the middle class during the lame duck session. Ways and Means Committee chairman David Camp plans to block a middle class-only tax cut vote. It would be political suicide for Republicans to vote for tax cuts for the rich and then say they are doing this to jump start the economy. House Democrats understand this is good politics. Obama either doesn't understand the politics or silently backs tax cuts for top earners.
Update: this chart created by the Washington Post illustrates the stark differences between the Republican and House Democratic tax proposals. The bigger the dot the bigger the tax cut.
Richard Shelby would most likely become chairman of the Senate Committee on Finance if Republicans take over the Senate. Shelby made it clear to ABC News that he plans to gut the Financial Reform bill.
"The bill is so sweeping and such a game changer in many ways that it's incumbent upon us to revisit it," Shelby said at the Reuters Washington Summit.
Yes, things were working so well before. That is why taxpayers were left paying for the bank bailout. Financial institutions were taking huge risks with naked credit default swaps. AIG sold too many naked CDS. AIG was unable to pay all the financial institutions that bought CDS. AIG nearly went under and other troubled financial institutions could not get the CDS revenue owed to them.
On Wednesday, September 17th, a day after the Fed agreed to inject eighty-five billion dollars of taxpayers’ money into A.I.G., Bernanke asked Paulson to accompany him to Capitol Hill and make the case for a congressional bailout of the entire banking industry. “We can’t keep doing this,” Bernanke told Paulson. “Both because we at the Fed don’t have the necessary resources and for reasons of democratic legitimacy, it’s important that the Congress come in and take control of the situation.”
Shelby wants to maintain the status quo.
"I don't believe it's good for business, it's not good for the financial sector and ultimately I don't believe it's going to be good for credit for a lot of people who need it. It's gonna cost," Shelby said.
I have no problem with the free market and people making money. My concern is systemic risk that could cause a depression. There is a difference between encouraging free market growth and reckless financial practices. Shelby would be encouraging the latter.
Shelby has set his sights on the newly created Consumer Financial Protection Bureau.
"The consumer agency bothers me the most," said Shelby, who failed to reach a compromise with Democrats and voted against the bill. "I thought the creation of it and the way it was created was a mistake," he said.
Notice Shelby didn't offer an alternative to make sure that consumers aren't vulnerable to shady financial practices. It is absolute insanity for Republicans to think different results will be achieved using the same faulty financial practices.
Shelby saves his most wingnuttery attack for Elizabeth Warren.
"I believe she's got a big ax to grind and she's sharpening that ax," said Shelby. "I don't think that you need somebody in a position like that with all these preconceived ideas and I believe she has a lot of them."
Warren is serving the American people and not special interests. Warren hasn't been afraid to put Treasury Sec. Tim Geithner in the hot seat. Sen. Chris Dodd has been against Warren's nomination. Warren is scaring members of both political parties. She must be doing something right.
President Barack Obama is proposing to extend the research and development tax credit. The problem is the tax credit for R&D would cost an estimated $100 billion in tax revenue. Obama is hoping the R&D tax credit will spur development. The President will have to figure what he will have to cut to help reduce the deficit. The White House is also considering infrastructure spending and to free up credit for small businesses.
Elizabeth Warren, chair of the Congressional Oversight Panel explained to Steve Chiotakis why there is such difficulty for small businesses to get loans.
Chiotakis: So Professor, if small businesses generate, what, two of three jobs in this economy, doesn't this fly in the face of the necessity of bailing out the banks in the first place?
Warren: Well you know, that's really the irony here isn't it? Remember, in the fall of 2008, Secretary Paulson went to Congress and the American people and said, we need this $700 billion bailout, because if we put the money into the banks, that's how it will make it on into the real economy. And the evidence shows that simply didn't happen; we put the money into big Wall Street banks and that's where it stayed.
Treasury Sec. Tim Geithner extended TARP until October of 2010. However, small businesses are still having a tough time getting loans. Geithner has not been able to get small banks to paticipate. The Independent Community Bankers of America gave Geithner a list of demands that must be meant before these banks will paticipate. Why doesn't Geithner just set up a temporary loan guarantee funds for small businesses? The small banks don't want to take the financial risk. Small businesses can get loans through the federal government to expand and hiring extra labor.
Duncan Black and Mike Konczal question how much job creation and economic growth will come from R&D tax credits. The H. Lee Moffitt Cancer Center & Research Institute in Tampa received $20 million in stimulus money. Director Thomas Sellers told TBO.com that the stimulus money is helping Moffitt produce fifty patent a year and five start-up companies.
As a longterm policy, helping spur research is smart. It isn't going to turn the economy around. What this tells me is Geithner and Obama's economic team has run out of ideas.
I wrote this post on Twitter about John Boehner calling for President Barack Obama to fire Tim Geithner and Lawrence Summers.
@thereidreport Boehner asking for Geithner to be fired would have progressives press for a more Left-leaning Sec o Treasury.
Geithner backed executive bonuses for AIG bonuses. AIG CEO Edward Liddy told Congress Geithner knew about the bonus money executives were going to reward themselves. Time reported the New York Federal Reserve informed Geithner of the bonuses before the March 10, 2009 date Geithner gave Congress.
Although Treasury Secretary Timothy Geithner told congressional leaders on Tuesday that he learned of AIG's impending $160 million bonus payments to members of its troubled financial-products unit on March 10, sources tell TIME that the New York Federal Reserve informed Treasury staff that the payments were imminent on Feb. 28. That is 10 days before Treasury staffers say they first learned "full details" of the bonus plan, and three days before the Administration launched a new $30 billion infusion of cash for AIG.
Dodd tells CNN that the Treasury Department told him to take out amendment limiting executive bonuses.
As head of the New York Federal Reserve, records show Geither told AIG to take out references to key deals from regulatory filings. This is extremely unethical for a public servant to do. At the New York Federal Reserve, Geither negotiated the AIG bailout plan. Geithner is more aware than most of the financial troubles AIG is facing. Geither placed protecting AIG above the American public.
Geithner used AIG to funnel bailout money to cover Goldman Sach's naked credit default swaps losses. Goldman Sachs played a significant role in the mortgage meltdown. Goldman Sachs betted against the housing industry and attempted to collect on the CDS. AIG was too extended to pay when the 2009 Wall Street meltdown occurred. Both AIG and Goldman Sachs did a nose dive and the taxpayers were left with the bill. Geithner's response has been to protect these institutions from oversight.
Jon Walker of Firedoglake explains why firing Geithner and Summers is bad politics for the Republican Party.
House Minority Leader John Boehner (R-OH) has recently called on President Obama to fire Treasury Secretary Tim Geithner and Director of the National Economic Council Larry Summers. Now I don’t know how Boehner’s mother raised him, but where I come from, that behavior would be considered downright rude. Where is the gratitude? I think John of Orange owes them an apology. Trying to get the two individuals whose actions played a major role in assuring that Boehner will be promoted (to the position of Speaker of the House after Republicans win big this November) fired is just bad manners in my book. If it weren’t for Summers’ terrible economic projections and horrible advice, combined with Geithner’s equally bad counsel, consistently putting the prosperity of Wall Street over main street while horribly mismanaging the HAMP program, Boehner would not be close to measuring the drapes for the Speaker’s office.
Summers favors the current banking monopoly and urged Bill Clinton to sign the Gramm-Leach-Bliley Act. As President of Harvard, Summers made the sexist statement that women do not have the same "aptitude" as men to succeed.
Unfortunately, Geithner and Summers hold too much sway over the President. It is ashame because this maybe the only time I will ever agree with Boehner.
RC Productions has made a music video in tribute of Elizabeth Warren. The music video urges the appointment of Warren to the new consumer financial protection agency. Treasury Sec. Tim Geithner and Sen. Christopher Dodd have opposed her nomination. As chair of the Congressional Oversight Panel, Warren questioned Geithner's commitment to the mortgage crisis and fought Dodd's attempts to water down the financial reform bill. What we are seeing is two very thin-skinned men looking for political payback. I find it interesting Warren's two leading critics are men that fought to protect AIG executive bonuses.
You can watch the Warren music video at the Huffington Post.
Howard Dean in the Huffington Post takes both parties to task for a lack of political courageousness. Dean cites the Tea Party Federation banishing Mark Williams for his "Letter to Lincoln" blog post.
"Now if the Tea Party, which is not a professional group of politicians have the decency to repudiate the racist fringe in their group," Dean wrote. "Why can't the Republicans."
The question poised by Dean is rhetorical. Dean notes, "(Republicans) will do anything to regain power." Refusing to extend unemployment benefits under the false pretense of fiscal conservatism. The political goal by Republicans was to make unemployed Americans angry at the Democrats.
Dean continues to hammer his point about Democrats needing a spine transplant.
The second lesson is harder. Stand up for what you believe in. I admire Nancy Pelosi because she is tough, gets things done, and doesn't take crap from the right wing or any one else.
The Obama administration panicked when Andrew Breitbart put the heavily edited videotape of Shirley Sherrod on the internet. Cheryl Cook, an undersecretary at the Department of Agriculture forced Sherrod to resign from the USDA. Cook told Sherrod she was "going to be on Glenn Beck tonight." The Obama administration fired Sherrod and Van Jones because of their fear of Glenn Beck. Can anyone imagine the White House firing an appointee because of what was said by Jane Hamsher, Rachel Maddow, Keith Olbermann or Arianna Huffington? Hamsher and Huffington want Geithner gone. White House senior adviser David Alexrod said Obama will not fire Geithner because "they have a man-crush on each other."
Obama had a private meeting with Fox News owner Rupert Murdoch and Roger Ailes. Obama could not even be bothered to attend this years Netroots Nation conference to speak to his base. This isn't to suggest Obama is a Republican. Obama is a politically reactionary politician who is fearful of media and corporate power.
