THE BLOG
03/29/2010 05:12 am ET Updated Dec 06, 2017

Who or What Does Geithner Care About Most?

Treasury Secretary Timothy Geithner says that the markets are doing incredibly well. Isn't it strange that this is the case, when many millions of American and small businesses are doing so incredibly bad? Small businesses can't get loans to stay afloat and individuals can't get them to start a business. Wasn't the bailout to the Wall Street banks supposed to enable these things? Wall Street banks are flush with cash, largely because of the money that American taxpayers lent them, and still, they sit and do nothing for us in return.

Listening to Geithner, I wondered if were seeing the same reality. Perhaps his indicators point to some other reality. But when has it ever been that the markets were doing so well and the American people so poorly? Does this not support the fact that Wall Street is the other Las Vegas, as Nicholas Darvas asserts in his book, Wall Street: The Other Las Vegas. John Bogle writes in his wonderful book Enough that "there is too much speculating and not enough investing." I agree.

What is for sure is that the national and global economies were saved by the bailout and stimulus. I don't think bottoming out was a viable option. But it should have been required of AIG to make concessions to their counterparties. Instead, the like of Goldman Sachs and Barclays, who failed miserably by investing in products like credit default swaps and collateralized debt obligations, got paid big in fees before the crisis, and a big bailout totaling over 20 billion in Goldman Sachs' case thereafter. Who wouldn't be flushed with cash with such opportunities?

When asked about Arianna Huffington's movement, Move Your Money, which encourages people to move their money from big Wall Street banks to small banks and credit unions, Geithner thought it was a bad idea. He was initially quite dismissive of the power which rests with the depositors. Without giving reasons why it was not a good idea, Geithner quickly backpedals to offhandedly support the American people with words. But we'd like to see some action. The bailout was supposed to increase lending to small businesses. Instead, these Wall Street banks give out billion-dollar bonuses to their own associates.

Geithner seems to care less about the unavailability of loans to small business and individuals who are seeking credit to start a business and more concerned about Wall Street banks which he did not oversee during the years he spent as the Chairman of the New York Fed.