Does Geithner Get It?
By Eugene Robinson
WashPost
Friday, March 20, 2009
President Obama's claim that Timothy Geithner faces a more daunting set of challenges than any Treasury secretary since Alexander Hamilton may be an exaggeration, but not by much. Geithner may indeed be the hardest-working man in Washington. But to survive, let alone succeed, he's going to have to make a more convincing case that he's part of the solution and not part of the problem.
The case of the appalling AIG bonuses -- I was going to call them outrageous, but politicians and pundits have exhausted the nation's supply of outrage since the payments were revealed -- is the latest situation to raise the inconvenient problem-vs.-solution question about Geithner. Why didn't he know about the bonuses earlier? And when he did get clued in, why didn't he do anything to head off what was obviously going to be a distracting and perhaps damaging controversy?
A simpler way of asking the Geithner question is: Does he get it?
Does he understand the profound sense of betrayal that so many Americans feel as we learn that the supposed wizards of finance, the Masters of the Universe who shower themselves with unimaginable wealth, were safeguarding our economic well-being with the diligence and sobriety of a drunken high roller at a craps table in Vegas at 4 a.m.? Does he understand that the crisis is not just an economic watershed but a cultural one as well, and that what once was deemed perfectly acceptable behavior on Wall Street is now seen as reprehensible? Does he understand that outside of Lower Manhattan, the definition of a "retention bonus" is being spared from the latest round of layoffs?
(More here.)
WashPost
Friday, March 20, 2009
President Obama's claim that Timothy Geithner faces a more daunting set of challenges than any Treasury secretary since Alexander Hamilton may be an exaggeration, but not by much. Geithner may indeed be the hardest-working man in Washington. But to survive, let alone succeed, he's going to have to make a more convincing case that he's part of the solution and not part of the problem.
The case of the appalling AIG bonuses -- I was going to call them outrageous, but politicians and pundits have exhausted the nation's supply of outrage since the payments were revealed -- is the latest situation to raise the inconvenient problem-vs.-solution question about Geithner. Why didn't he know about the bonuses earlier? And when he did get clued in, why didn't he do anything to head off what was obviously going to be a distracting and perhaps damaging controversy?
A simpler way of asking the Geithner question is: Does he get it?
Does he understand the profound sense of betrayal that so many Americans feel as we learn that the supposed wizards of finance, the Masters of the Universe who shower themselves with unimaginable wealth, were safeguarding our economic well-being with the diligence and sobriety of a drunken high roller at a craps table in Vegas at 4 a.m.? Does he understand that the crisis is not just an economic watershed but a cultural one as well, and that what once was deemed perfectly acceptable behavior on Wall Street is now seen as reprehensible? Does he understand that outside of Lower Manhattan, the definition of a "retention bonus" is being spared from the latest round of layoffs?
(More here.)
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1 Comments:
The bonuses are small potatoes.
Robinson nails it with his comment that the problem is the strategy … “hook up a fire hose to the Treasury and shower irresponsible and greedy financial institutions with money until the fire is put out.”
During the House Financial Services Committee hearing with the CEO of AIG, Congressman Thaddeus McCotter (R-MI) asked the most important question. Of course everyone was angry about the bonuses, but McCotter questioned the long-term viability of AIG in light of the additional $30 Billion that Treasury has earmarked for their potential use. The CEO stated that he did not know if those monies would be needed … which prompted the important question … why did the Treasury offer it ? Robinson answers it … “we’ve got a fire hose and were gonna use it.”
It is now on the record that approximately 30% of the $170 billion AIG received from taxpayers went to foreign entities and well-connected Wall Street firms. The largest amount — $11 billion — went to the Societe Generale Group, a Paris banking and financial services company. Others receiving money include Goldman Saks, Deutsche Bank, Merrill Lynch and other entities, including municipalities.
This is a runaway train that has gone out of control … blaming Geithner may be good political theatre, but I don’t have confidence that anyone is contemplating all the ramifications … but they’re damn good at using a fire hose … even if it is misdirected.
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