“I don’t think that Tim Geithner was motivated by anything other than concern to get the financial system working again. But I think that mindsets can be shaped by people you associate with, and you come to think that what’s good for Wall Street is good for America . . . [This] led to a bailout that was designed to try to get a lot of money to Wall Street, to share the largesse with other market participants, but that had deeply obvious flaws in that it put at risk the American taxpayer unnecessarily.”
–Joseph E. Stiglitz, Nobel-winning economist at Columbia
There is a huge, 5,000 word, front page article in the NYT today on Treasury Secretary Timothy F. Geithner. The article on the former president of the New York Federal Reserve Bank is your required reading today.
You may note that two of the most quoted banking experts — Chris Whalen and Josh Rosner — are not quoted in the piece; (They will be discussing this at our TBP conference in June)
Now for a little inside baseball stuff: They have been the ones painstakingly building the case against Geithner since his nomination. (Note the extensive usage of the former NY Fed Prez’ schedule). The assumption, referenced in the Stiglitz quote above, is the unusually close relationships between the NY Fed Pres and the C-level execs of Wall Street’s giant financial institutions has put him in the mindset of Wall Street, not the taxpayers.
I would imagine that this piece was 3 months in the making. You can rest assured that the two boys — who are presenting a panel on banking at the upcoming conference — were educating the writers of the Times missive as to the many foibles of Turbo-tax Timmy over that period.
Previously: Larry Summers: Wrong Man for the Job (April 4, 2009) http://www.ritholtz.com/blog/2009/04/summers/
Stiglitz: Blame Summers (April 17th, 2009) http://www.ritholtz.com/blog/2009/04/stiglitz-blame-summers/
Sources: Geithner Forged Close Ties to Finance Club JO BECKER and GRETCHEN MORGENSON NYT, April 26, 2009 http://www.nytimes.com/2009/04/27/business/27geithner.html
Geithner’s Calendar at the New York Fed http://documents.nytimes.com/geithner-schedule-new-york-fed#p=1http://www.nytimes.com/2009/04/27/business/27geithner.html
Geithner Calendar PDF http://graphics8.nytimes.com/packages/images/nytint/docs/geithner-schedule-new-york-fed/original.pdf
Originally published at The Big Picture blog and reproduced here with the author’s permission.