Geithner Must Go--And the Future of the Fed

[alp227]

by William Greider, The Nation

The first casualty of the president's political debacle will likely be Timothy Geithner, the severely over-confident treasury secretary well known as a lapdog of Wall Street. Geithner was effectively repudiated by the president last week when Barack Obama abruptly announced a new, more aggressive approach to financial reform. But the immediate threat to Geithner is the scandal of collusion and possibly illegal behavior gathering around the Federal Reserve Bank of New York for its megabillion-dollar takeover of insurance giant AIG.

Tim Geithner is standing in the middle of the muck because he was still president of the New York Fed in the fall of 2008 when it rescued AIG with tons of public money (now totaling $180 billion). The facts of the deal are catching up with him now and none are good, since they raise doubts about his competence and his public integrity. This scandal has smoldered for several weeks in newspaper business sections, but is about to grab front-page attention.

The House Oversight Committee, chaired by Edolphus Towns, has turned up damning evidence and called Geithner to testify the week of January 27. Committee investigators are poring through some 250,000 e-mails and subpoenaed documents and finding smoking revelations. House Republicans smell blood. House Democrats, given the present climate of popular discontent, are unlikely to rally around tainted goods.

Perhaps the most explosive revelation is that Geithner's subordinates at the New York Fed instructed AIG executives to evade securities law and conceal from the public the $62 billion the insurance company paid out on contracts with the largest investment houses and banks. AIG was already bankrupt and 80 percent owned by the government, kept afloat solely with the billions being injected by the central bank. Yet the Fed told the company to pay off the bankers at full value--100 percent on the dollar--without negotiating a better deal for the public. The bankers would not have collected a dime if the government hadn't come to the rescue.

Read more: http://www.thenation.com/doc/20100208/greider

[Demeter]

1. I Wish I Could Be As Confident As Wm. Greider

but too many times Obama lets his enemies slide off the hook for me to believe he'd actually do anything to one of his appointees.

[Vidar]

2. K&R.

[inna]

3. the CoCo thing is distracting and slightly annoying.

[alp227]

4. It's gone now. I'll find another avatar now...thanks for reminding me.

[inna]

5. oh, I feel bad now. my apologies if I hurt your feelings in any way....

:hug:

:yourock:

[alp227]

6. Still, Conan is gone from NBC, there's nothing I can do about it,

and I feel that the Coco avatar is a bit irrelevant now.