Past time for Geithner to go

UPDATE: Cenk Uygur asks and answers a very good question: Why is Fox News leaving Geithner alone?

Let’s hope the latest scandalous revelation about Timothy Geithner will bring a rapid end to his service as Treasury secretary:

Jan. 7 (Bloomberg) — The Federal Reserve Bank of New York, then led by Timothy Geithner, told American International Group Inc. to withhold details from the public about the bailed-out insurer’s payments to banks during the depths of the financial crisis, e-mails between the company and its regulator show.

AIG said in a draft of a regulatory filing that the insurer paid banks, which included Goldman Sachs Group Inc. and Societe Generale SA, 100 cents on the dollar for credit-default swaps they bought from the firm. The New York Fed crossed out the reference, according to the e-mails, and AIG excluded the language when the filing was made public on Dec. 24, 2008. The e-mails were obtained by Representative Darrell Issa, ranking member of the House Oversight and Government Reform Committee.

The New York Fed took over negotiations between AIG and the banks in November 2008 as losses on the swaps, which were contracts tied to subprime home loans, threatened to swamp the insurer weeks after its taxpayer-funded rescue. The regulator decided that Goldman Sachs and more than a dozen banks would be fully repaid for $62.1 billion of the swaps, prompting lawmakers to call the AIG rescue a “backdoor bailout” of financial firms.

“It appears that the New York Fed deliberately pressured AIG to restrict and delay the disclosure of important information,” said Issa, a California Republican. Taxpayers “deserve full and complete disclosure under our nation’s securities laws, not the withholding of politically inconvenient information.” […]

Barney Frank, a Massachusetts Democrat and chairman of the House Financial Services Committee, said the e-mail exchanges were “troubling” and that he supports holding congressional hearings to review them.

I’ve been hoping for the last year that President Obama would ditch Geithner sooner rather than later. President Obama didn’t react publicly to the November report from the Office of the Special Inspector General for the Troubled Asset Relief Program, which slammed Geithner’s conduct during the AIG bailout. But it’s clear that Geithner wasn’t looking out for the public interest in his last job and never should have been promoted to his current position.  

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  • Striving to be objective....

    shouldn’t this be a disaster for the administration?  The financial/economic situation in this country trumps most everything, and President Obama placed him in charge of the treasury.

    It’s probably lose-lose though.  If Geithner resigns, it might be a political loser.  However, if he stays, it might be an ethical/economic (or an ethiconomic) loser.

    The former is the better choice, as you state, and I absolutely agree with you…Why hasn’t this happened earlier?

    As I recall, you’ve never been a big fan of Geithner, desmoinesdem.  Nor have I.  Golden Boy?  Whatever.

    • true, I disliked this appointment from the beginning

      Better to take the political hit now and ditch Geithner and Summers. But as a MyDD commenter noted, the Cossacks work for the Tsar. This is Obama’s economic policy, not Geithner’s.

      It should be a disaster, but the AIG deal is complicated, and the mainstream media have zero attention span. Probably the White House can ride this out by not commenting. The media will move on to the next Tiger Woods story within a day or so.  

      • He should probably resign

        at a strategically significant time.  With today’s jobs report, it might be a good time to resign today.  Plus, Friday is always a good time to share this kind of news.

        • except that there's little pressure

          on the White House to dump him. I don’t see Obama as wanting to admit Geithner is the wrong man for this job.

          • You're right

            There is very little pressure towards Tim.  It’s curious why the both the left and right don’t smell blood in the water here.

            I suppose the GOP has bigger fish to fry (HCR and Terror, this month), while progressives don’t feel like now is the time to criticize the administration in another way, as it might make Obama less popular among the populace.

            Either way, we’ve seen little talk about TG from either side.

            Cenk makes an interesting point, but it further reinforces that if Obama wants to harness the populism that will play a role in 2010, he should get rid of him.

            Populists on the right were disappointed in McCain’s support of the bank bailout.  Populists of the left were disappointed in Obama’s support of the bank bailout.  Both candidates disappointed, and now that he’s in office, Obama is continuing to disappoint populists.  TG should go.  Populists on both sides will probably be pleased.