Tim Geithner said on Sunday's Face the Nation that the Treasury might fire the heads of big banks that depend on financing from the federal government, just as it summarily deposed Rick Wagoner, the former CEO of General Motors -- and before Wagoner, the heads of AIG, Fannie Mae, and Freddie Mac. "Where that requires a change in management and the board, then we will do that," said Geithner.
I suppose it's comforting to know our government stands ready to fire corporate executives and directors whenever taxpayer money is on the line. But I suspect Geithner's new tough line is mostly designed to reassure a public that's lost all faith in the wisdom of bailing out Wall Street.
For the sake of the argument, assume he's sincere. What criterion will an axe-wielding Geithner be using? If precipitous loss of shareholder value is enough to "require a change in management and the board," presumably every CEO and director of every big bank now being bailed out should be fired, starting with Ken Lewis of Bank of America.
If the criterion is diversion of taxpayer money to uses other than Congress intended when it first authorized the $700 billion bailout, the list of soon-to-be-fired CEOs is a bit shorter but still large. Surely it includes all the bailed-out banks that continue to fly their executives around the world in company jets, award them extraordinary pay packages, and run junkets at fancy resorts. Citigroup's Vikram Pandit (who collected $38.2 million for his taxpayer-subsidized services in 2008) comes immediately to mind.
Why stop there? Perhaps Geithner intends to fire executives and directors of any company that's dependent on taxpayers and is now losing money. Just think of the corporate house-cleaning this will mean. Hundreds of agribusiness executives are now at risk as are scores of military contractors. Hell, the whole pharmaceutical industry depends on taxpayer support (research subsidized by National Institutes of Health, sales subsidized through Medicare and Medicaid), and it's doing badly, so their executives and directors will be gone soon, too.
All told, about one out of every five large American companies depends on government contracts, and a majority of these firms are losing money right now. So ... off with their heads.
Henry Blodget: Why Does this Man Still Have His Job
The whole system remains infected with the rot that destroyed AIG: An incentive structure that can be summarized as "Heads we win, and tails we win, too."
The people at the Securities Exchange Commission allowed ( through non-enforcement of of securities laws ) naked short selling.
The deregulation, in 1999, signed into law by President Clinton is also responsible for Credit Default Swaps and other "financial engineering".
The people I referred to in my previous post are suffering more that John Thain (formerly of Merrill Lynch), Jack Welch (formerly of General Electric), Warren Buffett, Bill Gates ( of Microsoft), the current and former CEO's of Fanny and Freddy, Wachovia, Countrywide, Indy Mac Bank, and the multibillionaires and multimilloinaires around the world.
The honest people in the US who worked very hard for 30 or 40 years will find it hard to retire when they have lost two thirds of their pension funds in the stock market. The people in their 20s and 30s will not want to invest in a stock market that rewards the wealthy for failure.
My mother taught me that HONESTY IS THE BEST POLICY. President Obama and his administration, hopefully, will be honest and tax the wealthy and arrest the crooks, try them, and if convicted, order restitution and put the crooks in jail.
Nothing less than this will do.
They want to fire everybody and put in whoever they want.
The bad bankers will not be fired. They work hand in hand with our politicians.
Congress is doing nothing. Guess we have to wait for the harvest.
This they will do, under the guise of populism. Their think tanks and p.r. firms have already organized this "populist" "tea bagging" protest, which began before Obama was even inaugurated. It is a tribute to the citizens of Dumb****istan, that with the help of Fox "News", the little dears actually believe they themselves have organized a "grassroots" movement. They are SO cute, sometimes!
And the proof that it's all a product of the Bad Guys, is how... when it was exposed to the greater public what "teabagging" actually MEANS... they did NOT QUIT. They doubled-down on the dissemination of the term. That's just so... so Karl Rove!
When the original corporate/financial thieves ride back to power in this country on "populist" wings, don't say I didn't warn ya. They'll figure out the path to pulling it off, eventually.
Nancy Pelosi when asked on the April 10 Jon Stewart interview, how did the House Of Representatives decide to distribute the Stimulus Bailout $700 Billion to the banks, I was shocked to hear her answer,"That's the Secretary of Treasury's decision." meaning Timothy Geithner exclusively decided which banks got the Bailout money.
I was numb with Shock! Could you imagine Larry Summers, Obama's Chief Economic Advisor convincing Obama and the House of Representatives to give Geithner $700 Billion to indiscriminately hand out $700 Billion to his former colleges in the Federal Reserve who actually printed the phoney inflationary Fiat to give to Geithner, so that Geithner could give it back to the Federal Reserve Banks for free with the Tax payers paying the complete Bailout Bill, principle and interest to be paid back to the private foreign owned company, the Federal Reserve Bank with our grandchildren's taxes?
And our hidden taxes that increases inflation that has reduced the standard of living for Americans decade by decade with the FED's clever manipulations of our economy with their exclusive carte blanche control of our Monitary System which they were supposed to STABILIZE; the ONLY Raison d'Etre that got them CONGRESS' approval for a Central Bank CHARTER in 1913 ?
Are we a nation sailing to our doom on a Ship Of Fool's?
History will stigmatize Obama as the Father of the Mother of all Ponzi Schemes.
They need to get their lies straight and stick to one set of them. This jumping back and forth is way to disconcerting!
There's an old saying "Trust only movement." That is, ignore what people say about what they are doing, and watch what actually happens. What I see happening is our tax money (and future money) flowing to foreign banks and other gamblers on these fraudulent securitized loan packages and credit default swaps. I see big banks getting ever bigger. I see Wall Street workers for the most part keeping their jobs and salaries and benefits (and bonuses), and autoworkers expected to give back wages and benefits or the bankruptcy court will do it for them.
In other words, movement is in exactly the wrong direction. And you know what the best joke is? If things don't improve for ordinary people, they'll punish the politicians by voting the Rethuglicans back into Congress in the 2010 midterm elections. Oh, yeah, that'll help! I'd laugh if it didn't hurt so much.
i think obama should be able to decide not just who gets fired but who gets hired. maybe even who lives and who dies.
It's not like education, roads, defense, healthcare, et al, are anything like important by comparison...