copyright © 2009 Betsy L. Angert. BeThink.org
Negotiations began in November. Decisions were reached during the month of December. By January, a retention bonus was awarded to the individual considered most superlative within the staff. President Barack Obama presented the gift. American International Group, Incorporated [AIG] executives did not receive the windfall. Nor did someone “separate” from the previous President garner the honors. Gold was not placed at the door of a New Deal Democrat. No, dollars and command were delivered to a truly Progressive person. Insider, Timothy Geithner was the recipient of a title that would sustain his service. Mister Geithner was given a reward that was worth far more than mere millions in greenbacks. Power and influence are priceless.
President Obama granted these “commodities” to one who worked to ensure banks and other financial institutions would continue to flourish just as they had in the Bush Era. Now, the man with copious clout, wants more.
Indeed, Tim Geithner has already taken the reigns. He has worked to set more rules. Separate from Congressional approval for increased authority, and regardless of what regulatory standards the House and Senate might pass, Secretary Geithner, happily ensconced in President Obama’s favor, has begun to broaden his horizons. He expresses his expansive preeminence, and all are a twitter.
New-found fame, a brighter, well-funded future befits the man whose face now appears everywhere. Greater authority is as Tim Geithner was groomed to acquire. Indeed, Secretary Geithner grew accustomed to attention and awards.
Perhaps, Timothy Geithner’s desire for further recompense, economically or emotionally, began when he was but a boy. In his youth, the now Secretary of Treasury saw what could be wrought if one was well-connected. His lineage allowed him to look into a world of affluence and advantages.
Maternal grandfather, Charles F. Moore, was an adviser to President Dwight D. Eisenhower. Mister Moore also served as a Vice President of Ford Motor Company. “Dad,” Peter F. Geithner, was with the Ford Foundation. Tim Geithner’s father oversaw the project that Ann Dunham, President Obama’s mother gave birth to. Stanley Ann Soetoro and Tim’s Dad, developed microfinance programs in Indonesia.
This association alone might have helped Mister Geithner realize his path to the White House. Some theorize, President Obama and Tim Geithner formed an invisible bond, one that ties them together today
Money, power, and privilege were given to Timothy Geithner from birth. The more the lad “earned,” the more he hoped to receive in return. A graduate of Dartmouth and John Hopkins, initially Tim Geithner worked for Kissinger Associates, Incorporated. He then entered government, just as his forebears had. Geithner first joined the Department of Treasury in 1988 and worked in three administrations for five Secretaries of the Treasury in a variety of positions. He served as Under Secretary of the Treasury for International Affairs from 1999 to 2001. He was Director of the Policy Development and Review Department at the International Monetary Fund from 2001 until 2003. Then, he headed the New York Reserve. He befriended the acclaimed Economist Professor Paul Krugman. The two are associates within The Group of Thirty, a Consultative Group on International Economic and Monetary Affairs. It is no wonder President Obama was impressed and wanted to retain the financial expertise of one so esteemed.
Previously, the Secretary had succeeded, even exceeded expectations. With each step, the esteemed Economic wizard takes, greater gratitude and gilt are given. Hence, he moves forward.
Secretary Geithner addressed Congress on March 24, 2009. He and his cohort, Federal Reserve Chairman Ben S. Bernanke affirmed a need to be endowed with exceptional authority. The two concurred. The AIG catastrophe confirmed “a basic and tragic unfairness – that those who were prudent and responsible in their personal and professional judgments are harmed by the actions of those who were less careful and less prudent.” Many would agree.
On paper, the proposed request for increased control over financial institutions, other than banks, seems reasonable. If Congress approves of the strategy, Federal authorities could seize a failed fiscal establishment. Many believe the measures are long overdue. However, several hesitate. When they consider the fact, Secretary Geithner might be the person to decide the fate of these firms countless express concern. Perchance, he is not the person to have or hold such extensive power.
Esteemed Economist, and colleague Paul Krugman expressed disappointment after Mister Geithner revealed his bailout plan. Nobel Prize recipient Krugman wrote in The New York Times, “”In fact it fills me with a sense of despair.”
“The Geithner scheme would offer a one-way bet: if asset values go up, the investors profit, but if they go down, the investors can walk away from their debt,” the Princeton University Economist explained, as he cited specifics within the proposed strategy.
Might the man Professor Krugman long admired not be competent to oversee the fringe financial institutions? Those who were uncertain Tim Geithner was ever the best, the brightest, or the person to be retained, are now joined by others who originally had confidence in the now Secretary of Treasury. Since the appointment, and ample intangible appropriations were bestowed upon Secretary Geithner, the choice issue may be a moot point. Only the battle for a bigger role, increased responsibility to regulate remains a subject of contention.
The Obama Administration, mostly through Tim Geithner, has compared the proposed process to the work of the Federal Deposit Insurance Corporation. This favored institution protects depositors from bank failures. Regulators can take control of a troubled depository, place it under the authority of the FDIC, and then, quickly, and competently, restructure the reserve
Perhaps, that is the most significant difference. With consideration of the current economic crisis, and crucial assessments, the Secretary made prior to this plea for greater rule, Timothy Geithner showed no evidence of being swift or skilled in his ability to seize the moment or reign in American Insurance Group’s excesses.
As the former president of the New York Federal Reserve, Mister Geithner is the one Obama Administration official who is associated with the Bush-era bailouts. Once AIG was under Federal control, public servants say, compensation arrangements were rarely, if ever, discussed. In December, long before Tim Geithner received his own abundant reward, an initial $55 million in bonuses was delivered to the Insurance Group executives.
At the time, the glorious Geithner did not decry the greed. Indeed, even on this date late in March 2009, as he answered questions before the House Financial Services Committee, Secretary Geithner stated, “It’s a difficult balance.” He then further explained his belief; the government should not dictate detailed executive compensation limits to bankers. Timothy Geithner empathized with those who had been given retention bonuses. Indeed, while he did not give voice to the thought, the Secretary understood, he too was a very recent beneficiary of such graciousness.
Perhaps, opponents of greater government oversight appreciated the more individualist posture Treasury Secretary Geithner presented. However, a few felt a vital veracity must be pondered. An individual Presidential appointee [Geithner], and an agency [FDIC] with ample autonomy, are not one and the same.
Intentionally, the Federal Deposit Insurance Corporation, unlike the Treasury Department, was designed to be separate from the political process. The bureau acts in accordance to law. Should Congress consent to the Geithner request, a person who is profoundly affiliated with a partial, political body, would have the authority to take possession of a business that displeases the White House. Granted, supporters assure those who challenge the proposal, only corporations in crisis would be seized. Nevertheless, dissenters declare, corporate collusion with government insiders would remains a concern. A poorly regulated financial institution potentially would corrupt the government [further?].
Policy-wonks state, the power to take over banks or other alternative financial entities need be part of a broader regulatory structure. Limits are set on the risks that economic establishments can take. Therefore, the need for seizures is, and must be, more fully linked to violations. The Obama Administration has expressed a desire to increase regulations on firms that might be eligible for seizure under the proposed law. However, specifics have yet to be furnished.
For now, the focus remains solely on the Treasury Secretary. Tim Geithner seeks greater power than was given to him in the form of a gift, his title.
Unequivocally, Tim Geithner has received many accolades. Perchance, he was and is deserving. Secretary Geithner offered a welcome plan to resolve the mortgage meltdown the day before his most recent plea. Wall Street applauded the strategy, as evidenced by a record rise in stocks. The headlines for the long-anticipated program that would remove bank toxic assets and revive the financial system, bedazzled those with money to spend. Rescue Plan, With Fine Print, Dazzles Wall Street. Urged on by his success, Secretary Geithner had reason to hope he could garner greater authority. Those with big bucks see his increased powers as a bonus.
Yet, the apprehension Nobel Prize Economist, Paul Krugman expressed on March 23, 2009, the day before this recent hearing hangs over the head of Treasury Secretary Geithner. Thankfully, rancor for the subprime solution seems to receive less attention, at least amongst the House Financial Services Committee. Possibly, acrimony over Geithner’s past performances is also forgotten.
For a time it seemed Professor Krugman too had been willing to forgive and forget. There was a time the Princeton Professor was with those who sanctioned the selection of Tim Geithner to Treasury. Doctor Krugman had thought as President Obama did; Tim Geithner should be retained. His mere presence in the Administration would be a worthy bonus. Only months ago, Krugman approved of Geithner and his work. In his article, The grown-ups are coming, the stellar observer of economic policy sardonically noted the Tim Geithner was an improvement in contrast to the Bush Best and the Brightest.
Paul Krugman spoke highly of his associate from The Group of Thirty, a Consultative Group on International Economic and Monetary Affairs. That is, until Tim Geithner introduced his solution for toxic assets relief.
Perhaps times have changed. Certainly, there is reason to think Timothy Geithner has not. Nonetheless, earlier impressions and associations formed long ago linger in the present.
The New York Times Columnist and Economist publicly offered his “Despair over financial policy.” However, in a recent interview with Democracy Now’s, Amy Goodman, Krugman was reluctant to say the person who ascribes to lemon socialism, Timothy Geithner must go.
Paul Krugman as others may not have yet come to terms with contradictory views of the man who now Heads the Treasury.
Prior to the prize bequeathed on Mister Geithner, all of his actions appeared above board and in alignment with the ethical standards President Obama set for his Cabinet. The beneficiary of perks and power was perceived as an individual who had sacrificed much in order to serve his country. Tim Geithner was subjected grueling to Senate hearings. His records were scrutinized. To be certain no one would have reason to question the calculations, a highly respectable résumé was submitted.
Before his selection, Mister Geithner served as President of the New York Federal Reserve Bank. In his career, he worked closely with former U.S. Federal Reserve Chief Alan Greenspan, Bush Treasury Secretary Henry Paulson, and head of the Federal Reserve Ben Bernanke, and oh yes, venerated Economist Paul Krugman.
Overdue taxes were paid to ensure that all appeared proper and in order. That is, at least some of the levees never accounted for were remunerated Other outstanding tariffs, Tim Geithner was told, need not be paid, The statute of limitations had lapsed.
Just as had been with much else in his life, Tim would be forgiven for his forgetfulness or failures to do what most think ethical. No one would think to inquire of the enormous sums the Head of Treasury would garner for his friends, former colleagues, and himself. People were expected to consider the pittance he “earned” as a civil servant and be reassured, Tim Geithner is committed to the good of the country. After all, were he still with his previous employer, investment firm Goldman-Sachs, Secretary Geithner’s salary would have been far greater.
The power Timothy Geithner garnered throughout his life cannot be counted. Personal financial gains for friends, former colleagues, and himself are ample. Influence is near infinite. Why not, some might say, give Geithner more authority to rule. He has “earned” it. Perhaps, one day in a sequel to Professor Krugman’s recent tome, “America the Tarnished”, the established Economist will reject the cry, “Why not indeed.” He might even pen prose that state more directly Timothy Geithner, his retention, and the rewards he has already received are a significant part of “the crisis [that] has cost America much of its credibility, and with it much of its ability to lead.”
References for a Geithner Rule to be realized . . .
- Geithner says U.S. to help strengthen GM, Chrysler. Reuters. Automotive News. March 29, 2009
- Geithner Says Some Banks Need ‘Large Amounts’ of Assistance, Bloomberg. March 30, 2009
- On “Tonight Show,” Obama Defends Geithner. CBS News. March 19, 2009
- Geithner turnaround helps U.S. at G20 meeting, By Glenn Somerville. Reuters. Comcast News. March 31, 2009
- Tim Geithner: $135 Billion of TARP Cash Left, By Luke Mullins. USA Today. March 30, 2009
- G20 summit: Timothy Geithner calls for global regulation, By James Quinn Telegraph. March 27, 2009
- Geithner Seeks Broader Powers Over Financial Firms, By David Stout and Brian Knowlton. The New York Times. March 25, 2009
- Federal Deposit Insurance Corporation
- Geithner, Bernanke, testify before the House Financial Services Committee, By Emily Flitter. Bank Think. American Banker. March 24, 2009
- Treasury Secretary: Timothy Geithner, By Frances Romero. Time Magazine. November 2008
- Geithner plan ‘financial hocus pocus’: Krugman. Reuters. March 23, 2009
- Geithner Asks Congress for Broad Power to Seize Firms, Goal Is to Limit Risk to Broader Economy. By Binyamin Appelbaum, David Cho and Debbi Wilgoren. Washington Post.?Tuesday, March 24, 2009; 10:42 AM
- Obama Picks Geithner, an Insider, for Treasury, By Massimo Calabres. Time Magazine. November 22, 2008
- American International Group, Incorporated.
- AIG Insurance American International Group, Incorporated.
- AIG Business Solutions. American International Group, Incorporated.
- AIG Financial Services. American International Group, Incorporated.
- Geithner Hearing Scheduled for Jan. 21, By Jackie Calmes. The New York Times. January 14, 2009
- A Free-Spirited Wanderer Who Set Obama’s Path, By Janny Scott. The New York Times. March 14, 2008
- The Group of Thirty, a Consultative Group on International Economic and Monetary Affairs.
- The Geithner put, By Paul Krugman. The New York Times. January 30, 2009
- Rescue Plan, With Fine Print, Dazzles Wall Street, By Jackie Calmes. The New York Times. March 24, 2009
- The grown-Ups are coming, By Paul Krugman. The New York Times. November 22, 2008
- Despair over financial policy. By Paul Krugman. The New York Times. March 21, 2009
- Geithner, Holder Reap Rewards for Failure, By Margaret Carlson. Bloomberg. January 29, 2009
- America the Tarnished, By Paul Krugman. The New York Times. March 30, 2009
Updated Reference . . .
- Obama’s Economic Plan: A Version of the Monopoly Game, But No One Loses, By William Greider. The Nation. AlterNet. ? March 28, 2009