When I turned to today’s Wall Street Journal editoral page, I thought it had been replaced by the Onion, for here was Treasury Secretary Tim Geithner offering a version of history that bears little resemblence to the truth. But then again this is the same guy who claimed he’d never been a bank regulator despite having been President of the NY Federal Reserve (before and during the crisis).
Maybe the most humorous lines: “The president made two key decisions…second, he asked us to write draft legislation rather than propose broad principles. The president did not want the new rules to end up being written by those who brought us to the edge of catastrophic financial failure.” Then why in the world was Mr. Geithner included in the writing of the bill. Did Obama forget Geithner headed the most important regulator of Wall Street both before and during the crisis? And if your standard is not wanting those who “brought us to the edge of catastrophic financial failure,” then why were Chris Dodd and Barney Frank allowed anywhere near the bill? Seriously.
Almost as bad was Geithner’s claim that “we have started the process of winding down Fannie Mae and Freddie Mac and reforming the overall mortgage market.” Really? How so? Oh, that’s right: some useless, empty, bereft-of-detail report sent to Congress. Again, this is the same guy who chose to raise the cap on potential Fannie and Freddie losses, placing the taxpayer at the potential loss of hundreds of billions.
Another fantasy: “While many misperceive the investment made in banks under the Troubled Asset Relief Program as an unfair and unjust gift to the financial sector, we have already turned a profit on these investments, and we may do so on all the government intervention programs.” Wake up, Tim: the TARP was a bank bailout, and we are nowhere near recovering the $160 billion so far put into Fannie and Freddie. We are also losing money on the auto bailouts.
I could go on, but it’s not necessary. Why the President continues to support Geithner when almost no one, of any party, takes the guy seriously anymore, is beyond me. For there to be any hope of real, substantial reform of our financial system, those who “brought us to the edge of catastrophic financial failure” need to go. And the place to start is with Geithner.