What Did Geithner Know and When Did He Know It?

[leftchick]

Published on The Smirking Chimp (http://smirkingchimp.com)



By Cenk Uygur
Created Mar 18 2009 - 9:59am

There are now conflicting stories <1> about when Tim Geithner knew about the AIG bonuses. The administration says he found out last week. But Congress (and obviously the administration) knew of plans to pay hundreds of millions of dollars in bonuses last fall. There was an SEC filing to pay $469 million in "retention payments" to AIG executives in November of last year.

How could Geithner not have known about any of this? He'd have to be the only one in Washington that didn't know. More troubling is his earlier instance, especially during the stimulus package fight, that these companies be able to pay bonuses without much limitation.

Look at this article <2> from February 9th in the New York Times that explains how he fought against pay caps - and won. How is this not completely his responsibility?

For him to pretend to be surprised now when he actively fought to make sure bonuses were not limited is disingenuous at best.

Finally, another interesting question is - why? He claims it's because these banks couldn't keep the best and the brightest talent otherwise. That seems laughable, but he might have actually believed it because he has been surrounded by people who have internalized this idea for so long.

But let's consider one other possibility first.

Robert Rubin played ball with Wall Street and helped them to deregulate a lot of these financial markets right before Clinton left office. He then conveniently went to work for one of those banks and collected a whopping $115 million <3> at least <4> from Citigroup for sitting on their board for a period of years. Does Geithner know this is the reward for loyalty <5> - to the banks?

[stillcool]

1. Pay caps are not the same as bonuses..

[MarjorieG]

2. Easy to lump, but Geithner wanted to regulate and wants us out of this mess.

Would like our populist Dem-progressive echo chamber to tell me what we do when from the fall out. What we did seemed a better solution at the time, so everyone really knew better, with all their PhDs in economics?

[JDPriestly]

10. Read the article, Infinite Debt in the April edition of Harper's

It's by Thomas Geoghegan. It opened my eyes. It will open yours too.

We need to invest in manufacturing and wages and reduce the profits of the financial sector by prohibiting usurious interest rates.

I don't know how to link you to the article on line because Harper's is open only to subscribers as far as I know. I subscribe to the hard copy. This article will show you viable alternatives to the current giveaways to the banks.

America doesn't need a stronger banking system. It needs a stronger manufacturing base. America doesn't need billionaire bankers wagering ever higher debts on derivatives. It needs real jobs that pay decent wages for ordinary Americans.

Read the article. It tells you exactly how we got where we got. The key is a Supreme Court decision by Brennan in 1978, Marquette National Bank v. First of Omaha Service Corp. in which the Court held that under the National Bank8ing Act of 1865, the limit on the interest rate that a bank can charge on its loans is determined by the state in which the bank if located. Banks moved to states that permit them to charge any rate they want. The usury laws that had insured sanity in the financial markets since the Babylonians were wiped out in a fell swoop. The rest is history. Americans started borrowing on credit cards, against their houses, from the government, for education, for health care, for everything they needed and wanted. And now, Americans can't pay. The last thing we need is to support the banking industry.

The financial sector is making serfs of us all. We are reverting to an economy like that in the Middle Ages. We have a choice to make.

Obama is letting us down. The Republicans are even worse. And I say that as one who worked to get Obama elected. I am deeply disappointed in Obama. I hope he reads the article in Harper's and changes his course.

[theoldman]

3. What did Hank Paulson know and when did he know it?

Why did he not pass this information on to Geithner? Like Barney Franks said "the world was not created on January 20th".

[xiamiam]

4. gotta be suspect of paulson.mr. gun to your head and sign here absolving any liability for the crime

[KharmaTrain]

5. Maybe Cause Geitner Wasn't Treasury Secretary In November

I think we had just had an election at the time and Geitner was still at the Fed in New York. While I'm sure he and President Obama began to investigate the financial mess, I also have little trust in the boooosh regime and what type of information they gave both the incoming administration and Congress. Many of these deals were done by Henry "Kommandant Klink" Paulsen and the scope of the damage and the bail-out really wasn't known to many until the last days of this regime.

Geitner has faults...he's trying too hard to placate the Wall Street culture he knows so well...trying to "soft land" this crisis and being too tepid in light of the disclosures of wide-scale fraud and corruption. But he's also eating a shit sandwich not of his making. Now he's on the clock and the longer it takes for him to break up these "too big to fail" companies through nationalization, the more he's turning that sandwich into his own.

[theoldman]

6. Geithner can only pass the blame for a short time.

Eventually he has to take responsibility for the situation. His job is to fix the problem and it will take years, not months.

[earth mom]

7. Geithner is just doing his job-protecting the status quo.

It's the reason he was picked for the job. :grr:

[kentuck]

8. Geithner knows a lot he is not saying...

Perhaps he cannot say? But wasn't he in charge of the NY Federal Reserve Bank? He knows all the intricate details but he is only going to tell what he thinks he can get away with. Obviously, he has convinced Barack Obama that he knows what he is talking about??

[leftchick]

9. foolish move on obama's part

to pick and stick with wall streeters in the first place.