IT’S TIME TO THROW GEITHNER UNDER THE BUS
No wonder Republicans have essentially opted out of participating in any government stimulus plans and turned on themselves as a distraction. They realize that their chances in November 2010 might be improved by just doing nothing. They know that by letting Treasury Secretary Timothy Geithner run things, the banking and financial mess will drag out way beyond 2010 and the public will get pretty tired of things around the time of the next Midterm elections.
Without a functioning, responsible, ethical, trustworthy and strong banking and financial sector, all the spending and tax stimuli will not turn around the economy. More people will continue to lose jobs throughout 2010 and the American people will quickly lose patience with the Obama Administration. A transparent and thorough reorganization of the banking and financial sector must be done as fast as possible and contemporaneous with pursuing the rest of the Obama policy priorities. Most people, including Presidents, have little or no control over circumstances and events. However, we are all judged by how we respond to them.
Secretary Geithner has impeccable credentials: An Ivy League Education and backgrounds on Wall Street, the IMF, and President of the New York Federal Reserve, all before the age of 46. In 2008, he also played a major role in organizing all the initial bailouts through TARP of the major banks and AIG with prior Treasury Secretary Hank Paulson. It was no wonder that Wall Street gave thumbs up to his nomination by President Obama to head the Treasury Department. His priorities were and are tilted more towards Wall Street than Main Street. At his confirmation hearings he admitted he wanted to preserve the status quo of ownership and control on Wall Street – and the best interests of the nation were only secondary.
However his upcoming complex and unworkable plans for additional bank and AIG bailouts, public-private purchases of toxic assets with huge governmental subsidies, tepid plans for mortgage and foreclosure relief, overall secrecy, and an inability to simply articulate what he is doing, instead belie a completely different person. Here is a man without much imagination or creativity who rides on his resume and his connections. He appears to be a lackey for other stronger parties, mainly Wall Street insiders and possibly those in the Republican Party who want the President to fail. His credibility was destroyed by the policies he has pursued, not just his personal income tax problems.
There is a growing chorus for bank nationalizations and an aggressive and comprehensive policy towards reorganizing the nation’s bank and financial system from intelligent and experienced people across the political spectrum that care about this country’s economic future. In response Secretary Geithner appears to be dithering, obfuscating, delaying and covering up a variety of Wall Street’s past and current sins. Do people in Wall Street – to whom he caters unnecessarily – have some major secrets on him to which he is being held hostage?
President Obama did not win the Democratic Nomination or the Presidency because he stayed loyal to anyone except himself. If someone were causing damage to his personal or long-term goals for the country, they were quickly “thrown under the bus” and disposed of rather shamelessly. Now Secretary Geithner is dragging down the overall speed and direction of the Obama Presidential bus. He is causing much of the bank and financial mess to slide onto the Obama Administration, moving it off the original perpetrators, Wall Street and the top officials of the prior administration of George W. Bush. To see the shift in blame in less than 100 days is phenomenal.
However, it is not too late to reverse course. It would even help the President in the long run to quickly admit he made a mistake with Mr. Geithner. The American people would welcome it and support him at this early juncture. It would also give the President needed political cover and permit the blame to be reasonably dumped on Mr. Geithner, Wall Street and the prior administration where it belongs. Most politicians, pundits and taxpayers from the left and right are ready to dump on Mr. Geithner anyway.
The greedy, narcissistic, obtuse, and arrogant Wall Street schemers are still 2 steps ahead of the rest of us. Until a pro-active, talented, unified, aggressive, knowledgeable group of professional regulators are in place over this country’s banking and financial sector, we will be continuously surprised and outraged at the fraudulent and self-enriching behavior of those still in control on Wall Street. Furthermore, a comprehensive set of laws and regulations over our financial sector must be in place for aggressive enforcement.
Those on Wall Street probably realize they have no credibility left with the American public since their actions over the past few years destroyed all trust within and for the system. Now they simply want to skim off as much money for themselves before the entire charade and Ponzi scheme completely implodes. Their only steadfast front has been Mr. Geithner.
Despite the Wall Street excesses, we really have ourselves and our politicians of both parties to blame for over 20 years of deregulation and trusting the market could actually impose ethical and rational behavior on itself. The Congress and the Obama Administration have only until the end of 2009 to create a comprehensive and expansive regulatory system over the entire financial sector and the complete reorganizing of the U.S. banking system.
It’s only 20 months to go until the 2010 midterm elections and most Democrats in the House of Representatives are already dancing around the public outcry and aching to move our financial and banking bailout in a more sane direction. Mr. Geithner is now a bigger liability for the Administration than his resume and alleged brilliance can possibly offset. First impressions do matter and Mr. Geithner has failed every one during the past 2 months.
Thus it is time for President Obama to throw Mr. Geithner under the bus and quickly move onto salvaging his Presidency and getting ready for 2010 and 2012. Those dates are immovable in American politics; Mr. Geithner is eminently disposable for the good of the nation.
Then the President can throw a good part of the financial and banking system under the bus along with their greedy and arrogant managers and executives. They simply have to be put through a complete, supervised and rigorous reorganization and possible liquidation in bankruptcy court. Then bankruptcy rules would apply to cancel all contracts and permit the trustees to go back 6 years and rescind all prior questionable compensation, bonuses, salaries, commissions and other fraudulent transfers. We could put in public dollars to protect certain important national and international creditors but public participation should not be an open-ended unsupervised multi-trillion-dollar dump into a black hole. The greedy banking executives should be allowed to simply drown in their own toxic soup of worthless assets.
Perhaps the public outrage against AIG and the bank bailouts is due to the widespread realization that the economic, social and even criminal laws in this country are very different for the wealthy from those laws that apply to the rest of us. While tens of millions of people are losing jobs, homes, pensions and trust in our entire economic and political system as a result of the actions of the most powerful in our economy, the Government bends over backwards to protect those that created this deep recession. When fairness and ethics are thrown under the bus by the powerful in Washington and Wall Street, then resentment and anger are natural results. Until and unless the Administration promptly matches its actions to its lofty words, its slow but steady drop in public support will not be arrested.
Wall Street has lied to us for too long in trying to scare us that the world would come to an end without more unsupervised bailouts to them. They lost our trust many months ago and now they have no credibility whatsoever. The world will continue just fine without Wall Street – only their world would come to an end – which is long overdue. The rest of the economy and the American people would feel only a slight bump as those characters are run over by the bus.
3/19/09 by Marc Pascal in Phoenix, AZ.