Cynical Synapse

Wed, 14 Oct 2009

Geithner and Banks: Something is Rotten in DC

Filed under: Bailout, Economy, Government, Politics, Profiteering — cynicalsynapse @ 11:32 pm

Ok, the concept of “something rotten in DC” is both obvious and an understatement. But, I already said Timothy Geither as Treasury Secretary was like the fox watching the hen house. Apparently, Geithner has quite the cozy relationship with CEOs of Goldman Sachs, J.P.Morgan Chase, and Citigroup, all headquartered in New York. Remember, Geithner was president of the New York Federal Reserve until he became Treasury Secretary. This relationship doesn’t include Bank of America, headquartered on the West Coast. Seems fishy to me.

So, let’s see. The guy who oversees the Troubled Asset Relief Program (TARP) is best buds with 3 of its biggest benefactors? No conflict of interest there. In at least one case, Geithner was on the phone with J.P. Morgan, took a call from Pres. Obama, and then got back on the phone with J.P. Morgan. I guess we should be happy he took the call from his boss, huh?

To make matters worse, several of Geithner’s top aides worked for Wall Street, including Goldman Sachs and Citigroup. Seeing a trend here? Geithner has close ties with Wall Street’s top banks, he takes their advice, and his top aides made millions on Wall Street.

On top of that, the Special Inspector General for the Troubled Asset Relief Program (TARP), Neil Barofsky, said AIG’s spring bonuses were “a failure of oversight by Treasury”. Geithner claims not knowing about AIG bonuses until 3 days prior to March 13th, despite 2 months on the job and having been President of the New York Fed, which knew about the AIG bonuses in November. Is this surprising? Rep. Darrell Issa (R-CA), ranking member of the House Oversight and Government Reform Committee, said:

We have a Secretary of the Treasury who failed to know what he should have known, failed to do what he should have done, and has failed to give us transparency.

As Rep. Edolphus Towns (D-NY) said, “It just doesn’t seem right that the people who caused this tragedy should be so richly rewarded.” It could happen again, in March, when AIG is due to pay out another $198 million in retention payments. We shouldn’t have to keep enduring such insults. And we’re surprised Geithner’s the man without a plan?

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