Today’s must read MSM piece is a fascinating front page WSJ article on Treasury Secretary Tim Geithner (Bailout Anger Undermines Geithner).
Ignore that misleading headline — the article itself is not so much about the anger over the bailouts, but instead details the policy decisions and political choices Geithner made as Treasury Secretary.
The litany is not pretty.
The headline misses the nuance of the story: That Geithner is very much a creature of the Banks he is supposed to regulate; that he continued the same ruinous bailout policies he was a part of when they began under Bush/Paulson; that he has stood as a speed bump preventing more aggressive regulation of the banks that caused the mess.
Perhaps the key sentence in the entire Journal article: “Interviews with dozens of government officials show that Mr. Geithner has acted as a brake on administration officials seeking punitive action against big financial firms.” No, we best not punish these banks, that would be terrible.
From the Journal article, here are a few of Geithner’s greatest faux pas:
• Resisted efforts to oust Citigroup Chief Executive Vikram Pandit as a condition for more government aid;
• Successfully argued against ripping up contracts that controversially allowed millions of dollars in bonuses to be paid to American International Group employees;
• Pushed for banks to repay government funds, thus freeing them from TARP regulation;
These factors are minor compared to the overall failure to enact any sort of comprehensive regulatory reform. That is what a stronger, less captured Treasury Secretary would have done. Only a year into his term, this failure to achieve any major reforms represents his biggest policy blunder.
Expect it to cost the Democrats dearly come November . . .
graph courtesy of WSJ
Bailout Anger Undermines Geithner
WSJ, FEBRUARY 21, 2010