Has Timothy Geithner ever had lunch with a non-megamillionaire who has lost his job or home because of the banking meltdown? I ask that question after reading the list of the treasury secretary's luncheon dates when he was head of the New York Federal Reserve, a list that the government was forced to provide in response to a lawsuit.
During those years when he was supposed to be supervising Wall Street, he supped most often in the top-echelon dining room of some bank or at the home of one of the financial moguls who created the mess that has now bankrupted billions throughout the world. One of his frequent luncheon buddies was Sanford I. Weill, who as chairman of Citigroup lobbied successfully for the reversal of key regulations that dated back to the New Deal era. That change permitted Weill's oligarchy to become "too big to fail."
Another preferred dining companion was Robert Rubin, who as Bill Clinton's treasury secretary pushed through Weill's favored deregulation--a disastrous "reform" that lies at the heart of the current mess--and who went on to become chairman of Citigroup, where he presided over a downfall of the company that required a $45 billion taxpayer bailout. Geithner had worked for Rubin at the Treasury Department, and it was Rubin who got him his job at the New York Fed and hooked him up with Barack Obama.
Geithner has since pushed the Obama administration to approach the banking crisis not in response to the needs of destitute homeowners but rather from the side of the bankers who are seizing their homes. Instead of keeping people in their homes with a freeze on foreclosures, he has rewarded the unscrupulous lenders who conned ordinary folks.
He still wants to give more money to Citigroup, which has just been found woefully short of cash by Treasury's auditors, and has not stopped Fannie Mae, Freddie Mac and some other big banks ostensibly under government influence, and indeed sometimes ownership, from recently ending their temporary moratoriums on housing foreclosures. Geithner has been in the forefront of coddling the banks in the hopes that welfare for the rich will trickle down to suffering homeowners, but that has not happened.
As the New York Times revealed this week in a devastating exposé of Geithner's record: "An examination of Mr. Geithner's five years as president of the New York Fed, an era of unbridled and ultimately disastrous risk-taking by the financial industry, shows that he forged unusually close relationships with executives of Wall Street's giant financial institutions. His actions, as a regulator and later a bailout king, often aligned with the industry's interests and desires, according to interviews with financiers, regulators and analysts and a review of Federal Reserve records."
Most revealing was the Times' discovery that Geithner shocked a meeting of top government officials, convened by then-Treasury Secretary Henry M. Paulson to deal with the financial crisis, when "[h]e proposed asking Congress to give the president broad power to guarantee all the debt in the banking system. ... "
Now I know that the conventional wisdom among Democrats is that the Clintonistas were wildly successful in running the economy when they had their turn, and that Rubin and his protégés Lawrence Summers and Geithner deserve a lot of the credit. But that view is dead wrong. The seeds of the current economic chaos were planted in those years, in which Wall Street lobbyists were given everything they wanted in the way of radical deregulation, and hence was born the madcap world of credit swaps and other unregulated derivatives.
The result was a Clinton bubble, which saw the rise of a new superrich class that vastly skewed income distribution in favor of what was termed the "working rich" by Emmanuel Saez, who deservedly just won the top prize for young economists, the American Economic Association's John Bates Clark Medal. Members of the "working rich" are well represented in the top 1 percent of income "earners," who, according to a study by Saez, "captured about half of the overall economic growth over the period 1993-2006." The record is clear that from the first year of the Clinton reign, the new class of superrich, including many Wall Streeters, benefited as much as the other 99 percent of the nation's population did from the policies that Clinton put in place and George W. Bush accelerated.
To add salt to the wounds of those left out of the bubble, the Clinton administration summarily ended the federal poverty program in the name of a so-called welfare reform that "devolved" programs for the poor to the tender mercy of the states. The meanness derby between the cash-strapped states is on, and the poor, a category that includes a growing number of folks who only recently were judged "middle class," are abandoned.
What is involved here is an extreme case of government-condoned "moral hazard" offering outrageous compensation to the superrich for screwing up royally. Where is the socially conscious Obama we voted for? E-mail him and ask.
Robert Scheer is editor in chief of Truthdig and author of The Pornography of Power: How Defense Hawks Hijacked 9/11 and Weakened America.
None of these people are businessmen. They're not even robber-barons (who at least did produce something). They are pure-and-simply criminals, and their "too big to fail" institutions are nothing more than fronts for this criminal activity.
Securities fraud ... usury ... collusion ... deception ... racketeering ... the list of "crime words" goes on and on and on. And we can plainly see what has been the result of it: an economic disaster that did not have to happen, that does not yet have to happen now, but that will be "tremendously profitable" (in their odd sense of the word, "profit") if it does happen.
Charles Dickens had no shortage of source-material on which to base his characters.
But I understand. You're a reichwing toady playing political three-card monte.
With those sorts of credentials it was obvious from the start that Obama had no populist feelings regarding the economy, wall street or the people.
Hopefully this will be the start of a real re-examintion of those two, and a kicking out of the pedestal they've inexplicably been put on.
I vehemently oppose the administration's banking policy, but I don't regret voting for Obama. Like it or not, this is the best of all possible outcomes. We could have been screwed much worse.
Most of the top politicians in Washington are part of the same secret society. They indoctrinated Obama last June, but his primary competitors have been running with that crowd for years. Clinton, Edwards, Dodd -- all of them compromised.
And I promise you, under a McCain presidency, healthcare and education would NEVER EVER be brought forth as serious reform items.
Before you go post these sorts of comments, stop and think about what you are writing!!!
But these Executives and Employees have taken so much of the Profits from their banks the Banks are Bankrupt!
These people who in 1980 made 20 times the average worker NOW MAKE 400 Times the Avg Worker!
Remember $10 to $100 Million Christmas Bonuses on top of $10 to $50 Million salaries!
They ruined their OWN Banks and want to continue while WE the taxpayers Bail their Banks OUT!
THEY RUINED THEIR OWN BANKS!
Be that as it may, it's absurd to fault Geithner for having lunch with the most powerful bankers in the country when he's president of Wall St.'s branch of the Fed. Get real. Obama and Geithner are working their posteriors off to save the "little people" from economic disaster. There's no way to do this except consulting with the smartest, most powerful people in the banking industry. What good would it do anyone for Geithner to completely waste his time lunching with an out-of-work worker? What's that supposed to do make him "feel their pain"? We all need to work hard at finally growing up and acting like adults, like Obama, instead of constantly sentimentalizing everything the way the Boomers have all their lives, and the way the conman and carnival barker Clinton did to seduce the "little people" into the silly delusion that he actually cared about them. The bubble he created with his Wall St. cronies, ultimately to line his own pockets, shows how much the "sensitive" Clinton actually cared about anyone on earth except himself. Obama and Geithner are so much better than Clinton it's absurd to talk about them in the same breath.
Stegall repeal. It was the lack of interest on the part of the Bush administration in regulating the financial industry that brought us to where we are today.
However, it could have been worse, guys. We could be stuck right now with an elderly, befuddled McCain plus a certified nutcake like Palin. At this time of crisis, all of us are better off with a young, energetic, hardworking President at the helm, no matter what party we belong to.
I'm not so sure we're better off with a popular, vigorous president with fundamentally flawed ideas. He may turn out to be as mule-stubborn as Bush. Plus if we're going to have an economic failure from continuing the Bush-Paulson plan, wouldn't it be better to have Republicans own it totally?