Over the years on FW I've criticized Geithner more than once for various
things he did or didn't do. At the same time I realized that he was not
quite the same as some of this predecessors and professional associates in
govenment. He isn't your usual revolving glass door man. He didn't arrive
from the financial sector (that is, priivate banking and suchlike) nor, it
appeared, was he likely to enter it. In 2007, before the cataclysm,
Sandford Weill had already offered him the CEOship of CitiGroup -- probably
the richest prize of anything in Wall Street -- but he'd turned it down.
Reading his biography on Wikipedia you'd have to be critical in the extreme
not to recognize that Geithner is a polymath of a high order. (That he
cheated over one modest attempt at tax avoidance shouldn't, in my opinion,
be held against him.
The one thing I definitely would charge Geithner with is hubris, something
he shares with Bernanke (and before him Keynes) -- that, with his advice,
governments can solve economic problems.
Keith
At 15:39 07/02/2013, AC wrote:
<<<<
New York Times 2 February 2013
Banks, at Least, Had a Friend in Geithner
By
<http://topics.nytimes.com/top/reference/timestopics/people/m/gretchen_morgenson/index.html>GRETCHEN
MORGENSON
<http://topics.nytimes.com/top/reference/timestopics/people/g/timothy_f_geithner/index.html?inline=nyt-per>TIMOTHY
F. GEITHNER left the Treasury Department last week after four years as
secretary. So how did he do?
As financial adviser to the president in the tumultuous years immediately
after the credit crisis, Mr. Geithner had immense sway over the
governments approach to all things economic. For everyday Americans, his
major tasks included responding to the home
<http://topics.nytimes.com/top/reference/timestopics/subjects/f/foreclosures/index.html?inline=nyt-classifier>foreclosure
mess, unwinding federal bailouts under the Troubled Asset Relief Program
and tackling the problem of financial institutions that are too big to
manage and too interconnected for Americas good.
But in scanning these agenda items, a pattern of winners and losers
emerges. Lets just say the financial institutions that dominate the United
States were rarely on the losing end in the Geithner years.
I wanted to speak with Mr. Geithner to allow him to respond to his critics
and to get his take on his years in the job. A spokeswoman said he was on
vacation and unavailable.
So I turned to the Treasurys Web site, where
<http://www.treasury.gov/connect/blog/Pages/75-Facts-About-the-75th-Secretary-of-the-Treasury.aspx>I
found a list of 75 facts about Mr. Geithners tenure. Among other things, I
learned that on his watch the Financial Crimes Enforcement Network assessed
its two biggest penalties against banks for money-laundering and that the
Treasury Department cracked down on offshore tax evasion. I also found he
has logged more than 600,000 miles on international trips, played
basketball in China and cricket in India, and has his signature on $17
billion of United States currency.
Clearly, Mr. Geithner was busy. He had to deal with severe financial
troubles overseas, navigate relationships with China and Europe and
negotiate with Congress on contentious tax matters.
Mr. Geithner
<http://www.newrepublic.com/blog/112152/timothy-geithners-exit-interview#>has
spoken to other journalists about the work that he and his colleagues did
in the aftermath of the financial crisis. He said that this work was
incredibly effective for the broad interest of the economy and the
financial system, and that he believed his financial reform efforts will
significantly reduce the probability and the intensity of crises for a long
period of time. He also denied that bankers have too much political
influence in Washington.
Thats news to <http://jeffconnaughton.com/>Jeff Connaughton, who was chief
of staff to Ted Kaufman, a former Democratic senator from Delaware. Mr.
Connaughton, author of The Payoff: Why Wall Street Always Wins, said he
believed that Treasurys kid-glove treatment of the big banks would have
the lasting effect of ensuring future crises.
While banks recovered quickly and the Dow is around 14,000, he said last
week, the economy is still sputtering for millions of Americans whose
livelihoods were devastated by the financial crisis. He added: The legal
and regulatory framework that Geithner leaves behind for preventing a
future financial crisis inspires little confidence, especially amid
scandals emerging almost weekly at banks too big and complex to manage,
regulate, police and fail.
How did Treasury favor the banks? Consider its answer to the foreclosure
mess. After promising to help four million borrowers, its
<http://www.makinghomeaffordable.gov/programs/lower-payments/Pages/hamp.aspx>Home
Affordable Modification Program at last count had helped about one-quarter
of that number.
One reason for this is that the program was flawed from the start.
First, the Treasury made the program voluntary, awarding funds to
participating banks but failing to penalize those that did not. The program
was all carrot, no stick.
Worse, the initial plan didnt require the banks to write down second liens
they may have held like home equity lines from borrowers whose original
loans were modified. This let the banks put their interests ahead of both
borrowers and those who held the first mortgages.
Unwinding the Troubled Asset Relief Program was another area where the
department fell short. Eager to trumpet the success of TARP and other
bailout programs, for example, Treasury boasted last spring that taxpayers
would likely make money on them.
Such a claim,
<http://www.cepr.net/index.php/op-eds-&-columns/op-eds-&-columns/timothy-geithner-saved-wall-street-not-the-economy>said
Dean Baker, co-director of the Center for Economic and Policy Research,
should immediately discredit the teller.
Treasurys accounting for TARP and the other programs didnt factor in the
below-market rates the recipients paid on these loans. We did them an
enormous favor, Mr. Baker said in an interview last week, at a time when
liquidity commanded an incredible premium.
Neither, critics say, was Treasury transparent about TARP or willing to
provide data to Congress on the programs progress. Under Secretary
Geithners leadership, Treasury consistently overstated the results of its
actions, painting a rosier picture than reality, said Senator Charles E.
Grassley, the Iowa Republican who is the ranking Republican on the Senate
Finance Committee. Without the special inspector general, the public
wouldnt have a clear, numbers-driven point of view on TARP.
FINALLY, theres the matter of Treasurys response to the weightiest issue
of all: banks that are too large to succeed.
Back in 2010, Senator Sherrod Brown, Democrat of Ohio, and Mr. Kaufman were
co-sponsors of the Safe Banking Act, which proposed placing tough limits on
banks size. If it had passed, it would have imposed a strict 10 percent
cap on any bank holding companys share of United States deposits and set a
6 percent limit on leverage.
The act was a way to begin reining in the huge institutions that had caused
so much trouble in the credit debacle. It could also have protected
taxpayers from having to make future rescues.
A good thing for Main Street, in other words.
But it was not to be. Among the bills most aggressive opponents was, yes,
the Treasury.
We were disappointed, Mr. Brown said in an interview on Thursday. Not
only did Treasury oppose it, but they proudly opposed it. If the Treasury
had spoken out for it we could have gotten very close to winning.
Thankfully, Mr. Brown has not given up on the idea of reducing big banks
size and threat to taxpayers. He and Senator David Vitter, a Louisiana
Republican, have asked the Government Accountability Office to quantify the
size of the advantages and implied taxpayer subsidies that large
financial institutions enjoy over their smaller brethren. The study is
expected to take about a year to complete.
I like Tim personally, Mr. Brown said of Mr. Geithner. But he was better
at putting out the fire than preventing the next one.
http://www.nytimes.com/2013/02/03/business/banks-at-least-had-a-friend-in-ge
ithner.html?nl=todaysheadlines&emc=edit_th_20130203
Banks, at Least, Had a Friend in Geithner
As financial adviser to the president in the tumultuous years immediately
after the credit crisis, Mr. Geithner had immense sway over the government's
approach to all things economic. For everyday Americans, his major tasks
included responding to the home foreclosure2 mess, unwinding federal
bailouts under the Troubled Asset Relief Program and tackling the problem of
financial institutions that are too big to manage and too interconnected for
America's good.
But in scanning these agenda items, a pattern of winners and losers emerges.
Let's just say the financial institutions that dominate the United States
were rarely on the losing end in the Geithner years
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https://lists.uwaterloo.ca/mailman/listinfo/futurework
