Tuesday, November 3, 2009

Ratigan: Why Keep Geithner?

When I criticize Obama, one of my most frequent complaints is that Obama appointed this man.

geithner A year ago it was revealed to the American people that our banking system is a legalized Ponzi scheme in which bank and insurance CEOs pay themselves billions of dollars in personal compensation to lend and insure assets with money they don't have to customers who can't pay back the loans.

In those dark days between the fall of Lehman Brothers and before the presidential election, we were often carried through that time by the small glimmer of hope that at least we would soon have a new leader who would hopefully fix this mess and punish those responsible.

Yet in the past 9 months, not only has the administration failed to fix anything, they have actually made things much worse for anyone who isn't a Wall Street banker. Therefore, we are past the point where anyone in power still gets the benefit of the doubt -- the process of taking back our country for all citizens must begin now.

This is why I think we must ask if U.S. Treasury Secretary Timothy Geithner is still the right person for the job. It has become clear recently that, back in his previous role as New York Federal Reserve Governor, he unnecessarily gave billions of dollars of US tax money to banks and insurance companies with few strings attached. And it is now becoming clear that his lack of meaningful action is helping many of these same banks steal more by legalizing their most economically dangerous, socially destructive and self-enriching practices.

Yesterday on NBC's Meet the Press, Secretary Geithner again endorsed House bank reform legislation that would allow, by my calculations, as much as 80%, or $475 trillion, of the bank's $600 trillion in crooked insurance schemes to still be held in secret. It was and is the secret risks held in this very market that led to our collapse in the first place, and that continue to pose massive future risk to the global economy.

Geithner also continued to employ the bankers' favorite and most ludicrous lie : that the taxpayer must somehow continue to pay executives at companies like AIG ungodly sums of money under the threat that, if we don't, somehow the taxpayer will never make their money back. Well let me tell you something, the taxpayer and our nation will never get back the lost wealth taken under these false circumstances and this colossal breach of fiduciary duty. The idea that we must somehow perpetuate this system with our tax money and the future wealth of our children goes against the very American ideal of failure, adaptation and innovation, not to mention of our democracy.

Also last week, the Treasury Secretary endorsed a piece of legislation that, instead of stopping a select few companies from profiting from the implicit taxpayer-guarantee of Too Big Too Fail, seeks to officially condone it. If the most prized skill in our society, economically, is the ability to lend and insure the most money without consequences, then our nation's people are doomed to lose everything in the world's largest ever betting parlor; and that is precisely the system this Treasury Secretary -- Tim Geithner -- is seeking to legalize and institutionalize in America today.

However, the smoking gun for Secretary Geithner comes from a recent Bloomberg FOIA disclosure regarding events from last November. It was then that New York Federal Reserve Governor Tim Geithner decided to deliver 100 cents on the dollar, in secret no less, to pay off the counter parties to the world's largest (and still un-investigated) insurance fraud -- AIG. This full payoff with taxpayer dollars was carried out by Geithner after AIG's bank customers, such as Goldman Sachs, Deutsche Bank and Societe Generale, had already previously agreed to taking as little as 40 cents on the dollar. Even after the GM autoworkers, bondholders and vendors all received a government-enforced haircut on their contracts, he still had the audacity to claim the "sanctity of contracts" in the dealings with these companies like AIG.

None of us were in the rooms when these decisions were made, so I don't pretend to know if Mr. Geithner was the one lone, sane voice of reason fighting against mysterious forces or the primary proponent. However, I fail to see the reasoning for why we continue to rely on those who were in the room when these horrendous decisions took place to be the same people that we choose to deal with their aftermath… [emphasis added]

Inserted from <Huffington Post>

To me it appears crystal clear that Geithner is running DOT for the benefit of plutocon branch of the GOP and against the interests of US taxpayers.  Obama was mistaken to appoint him, demonstrates incompetence by keeping him.  Geithner is as disastrous for Finance as Joe Liebercrud is for health care.


the walking man said...

I would give my old lady his job, she knows what dollars are for and it ain't for a few to have the best and nothing left over for the rest.

rjs said...

dont have to go far to find a criticism of geithner: Never Send a Boy to Do a Man's Job "I must admit, Dear and Long-suffering Readers, that my first reaction to this news was of a kind with several of the sources quoted in the article: white-hot, scalding rage. I mean, what the fuck?! Tim Geithner and pals left up to thirteen billion dollars of taxpayer money just sitting on the table? Why? Because some counterparties insisted on being paid in full and the New York Fed did not want to negotiate separate deals, says a person close to the transaction. Oh, that's a good reason. No, really, I mean it. Dumb fucking cocksuckers."
(for this he got promoted to treasury Sec)

Randal Graves said...

If he gets canned, he might go work his magic somewhere else, like on Wall Street! Can we really afford to lose such genius?

TomCat said...

Mark, I don't doubt for a second that she would do it better.

RJ, I wish I knew what motivated Obama to promote him.

Randal, where else can we turn for the maunfacture of bubbles?