“I don’t think that Tim Geithner was motivated by anything other than concern to get the financial system working again. But I think that mindsets can be shaped by people you associate with, and you come to think that what’s good for Wall Street is good for America . . . [This] led to a bailout that was designed to try to get a lot of money to Wall Street, to share the largesse with other market participants, but that had deeply obvious flaws in that it put at risk the American taxpayer unnecessarily.”
–Joseph E. Stiglitz, Nobel-winning economist at Columbia
There is a huge, 5,000 word, front page article in the NYT today on Treasury Secretary Timothy F. Geithner. The article on the former president of the New York Federal Reserve Bank is your required reading today.
You may note that many of the media’s most knowledgeable banking experts are not quoted in the piece; (Though a few of them will be discussing the foibles of our banking system at our TBP conference in June)
Now for a little inside baseball stuff: I cannot say for sure, but I have a sneaking feeling that several analysts were the ones who helped build the case against Geithner. Note the extensive usage of the former NY Fed Prez’ schedule in the online version of the article.
I also have to point out the Stiglitz quote above. The assumption referenced by the Columbia Prof and Nobel winner, is that the unusually close relationship between Geithner when he was NY Fed President and the C-level execs of Wall Street’s giant financial institutions has put him in the mindset of Wall Street, and not the taxpayers. That was my very same argument about Larry Summers earlier this month.
This is a huge piece, one that I imagine was over 3 months in the making. It appears to have been painstakingly assembled. One would hazard a guess that a few smart banking analysts would be helpful to any writer who was putting together such missive as to the foibles of the Tres Secy.
Larry Summers: Wrong Man for the Job (April 4, 2009)
Stiglitz: Blame Summers (April 17th, 2009)
Geithner Forged Close Ties to Finance Club
JO BECKER and GRETCHEN MORGENSON
NYT, April 26, 2009
Geithner’s Calendar at the New York Fed
Geithner Calendar PDF