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Geithner Gets a Bad Rap in the AIG Scandal

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Swede Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-17-10 11:38 AM
Original message
Geithner Gets a Bad Rap in the AIG Scandal
On the other hand, if you're the kind of person who believes at least some good deeds should go unpunished, you might want to cut Geithner and his colleagues at the Fed some slack for their performance during the worst financial crisis since the 1930s. They did, after all, help save the world from a second Great Depression. A House committee has dragooned Geithner into testifying about AIG on Jan. 27, but the constant second-guessing over the specific details of the AIG rescue Why not impose haircuts on creditors? Why allow bonuses for executives? is only distracting attention from the real AIG scandal and the efforts to make sure it never happens again.


http://www.time.com/time/business/article/0,8599,195386...
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sandnsea Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-17-10 11:51 AM
Response to Original message
1. Interesting article
"The first thing Fed bashers should remember about the AIG bailout is the chaotic circumstances. The Fed barely knew how to spell AIG before the panic of September 2008; it didn't regulate insurance companies, and its leaders had no idea that a division of this particular insurance company had turned itself into a giant and overleveraged hedge fund, much less that AIG was entangled with other giant and overleveraged institutions through exotic financial gambles ultimately backed by sketchy mortgages. According to accounts of the crisis like David Wessel's In Fed We Trust and Andrew Ross Sorkin's Too Big to Fail, Geithner first discovered that AIG posed a potentially catastrophic risk to the global economy just as he and the rest of the Fed were frantically trying to persuade Bank of America to take over Merrill Lynch while searching for a buyer for Lehman Brothers in order to prevent the largest bankruptcy in the history of the planet. It's not easy to improvise a bailout for a company you knew nothing about the day before while the world is going to hell."

Read more: http://www.time.com/time/business/article/0,8599,195386...

I don't think NOBODY knew anything about AIG or at least should have known, but I think it is probably true that Geithner isn't the one who should have known. He is the one who unraveled this ponzi scheme though, in banking and insurance, and I think gets a bad rap because people don't understand that.
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Daveparts still Donating Member (614 posts) Send PM | Profile | Ignore Sun Jan-17-10 01:14 PM
Response to Original message
2. Corporate Apologist Tripe
Oh boy, do I have some problems with this corporate apologist tripe. Im not a Fed Basher, I understand that you either have to have a vehicle like the Fed or you have to have a government bank. The Fed is the lessor of two evils, the Fed is a tool and when it works well you leave it alone but when it works badly you put it on the grinding stone until you have a sharp edge again.

When Geithner was first nominated everyone came forward to tell us what an intelligent man he was. Bernanke and Paulson all said that this was one sharp cookie. Now according to the article he is being Dragooned 1 : to subjugate or persecute by harsh use of troops 2 : to force into submission or compliance especially by violent measures. Is Mr. Geithner being dragooned by asking him questions about questionable practices?

The article then presupposes that the reason that these things went on was because they were mere babes in the woods. They didnt know any better; those Wall Street tricksters took advantage of them. So which is it? Is Geithner a genius or dumb ass and is either a legal excuse for criminal wrong doing?

On the other hand, if you're the kind of person who believes at least some good deeds should go unpunished, you might want to cut Geithner and his colleagues at the Fed some slack for their performance during the worst financial crisis since the 1930s. They did, after all, they did help save the world from a second Great Depression.

Say what? Saved whom from a second Great Depression? 16 million unemployed, 10 million homes foreclosed with and estimated three million more expected this year! California tax revenues down by 44%, 36 states facing draconian budget cuts. Food stamp roles up by 25% one in five American children considered at risk for malnutrition. A commercial property bubble that threatens to take the banks down yet again and Im supposed to hosanna because someone in a New York high rise says were saved!

This is about insiders who knew exactly what they were doing, they were protecting their friends and it takes a lot of gaul to imply that they were doing it for us!
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yurbud Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-17-10 01:53 PM
Response to Original message
3. the only ''bad rap'' Geithner could get is one that doesn't inflict enough pain
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-17-10 07:05 PM
Response to Original message
4. NO Sale
Geithner will never get what he deserves: serious jail time.
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Larkspur Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-17-10 11:36 PM
Response to Original message
5. Time Mag, the folks who named Bernake "Man of the Year", is defending Geithner?
I'm not surprised.

The corporate masters of Time Mag let Congerss know they wanted their poodle, Bernanke, reinstalled as head of the Fed by naming him "Man of the Year". So it is no surprised that Geither, who is another poodle for Wall Street and Big Money interests, is defended by them.
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Jim Sagle Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-18-10 02:49 AM
Response to Original message
6. Whadda crocka corporatism.
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