Thursday, March 19, 2009

Geithner: He Stuck Up His Thumb, Said AIG's Plum, and Now We Have Rotten Pie

Yesterday, as I was posting on President Barack Obama's attempt to diffuse the A.I.G. bonuses bomb by saying he takes responsibility for the bonus mess, I read at Writes Like She Talks a paragraph from WaPo's "The Fix" about Treasury Secretary Tim Geithner that made me think I'd either misread the article or it had a typo.

The part that tripped me up was that on March 10, Geithner, after meeting with AIG CEO Edward Liddy to tell him he was displeased about more than $165 million in federal bailout money that AIG would give to executives as bonuses, "tasked his legal team with finding a way not to stop the bonuses." I added the bold emphasis because the word "not" was what I did not comprehend. Geithner did what? Told his lawyers to find a way NOT to stop the bonuses. (Read The Fix)

In addition, according "The Fix," Geithner did not inform President Obama and White House aides about the bonuses and his attempts to ensure AIG was able to hand them out until two days after his meeting with Liddy.

It was late, and so, I thought I'll figure this out when I'm fully awake.

Tonight I was watching CNBC online and saw the video that I've posted up top. According to CNBC's report, Geithner is the one taking responsibility today for AIG stink. He said he was concerned that the Federal Government could be sued if its strings on the bailout money stopped AIG bonuses, causing the company to break its contracts, and so he asked Sen. Chris Dodd to include a loophole in the bailout's language. Per CNN Money:
Sen. Dodd, chairman of the Committee on Banking, Housing and Urban Affairs, admitted to CNN Wednesday he'd added the controversial provision after a Treasury official pushed for it. Earlier in the week, Dodd had said he had not played any role in the addition of the loophole.

Geithner told Velshi Thursday the bonus situation is his issue to deal with. "You know, it's my responsibility," he said. "I was in a position where I didn't know about those sooner, I take full responsibility for that." (CNN Money)
Dodd apparently is all politician. His first instinct was to lie and say he didn't do it. Let's save him for another post.

Here's Geithner on CNN:

As a daughter of New Orleans who's watched people sue the Federal Government, go to court and lose their class-action suits that accuse the Federal Government/Army Corps of Engineers of being at fault for the levee breaks, and having heard all my life how hard it is for anyone to sue the Federal Government and win, I think Geithner must be an absolute idiot. Or did Liddy have something on Geithner's sorry behind to hang over his head? Probably not, but I'm trying to fathom how Geithner could have made such an idiotic decision.

Obama has a reputation for being very loyal, but Geithner doesn't deserve that loyalty. Watch video of Obama standing by Geithner, supporting him for "the AIG fiasco," as The Washington Post calls it. The video accompanies an article, "How the Fed Failed to Tell Obama About The Bonuses," which asserts the following:
Federal Reserve officials knew for months about bonuses at American International Group but failed to tell the Obama administration, according to government and company officials, exposing problems in a relationship that is vital to addressing the financial crisis. (Read full story.)
The article goes on to say that Geithner, "a central figure in the decision to bail out AIG last fall as president of the Federal Reserve Bank of New York," declares he didn't know the AIG bonuses were so big until March 10.

Every money man I've known has been detail-oriented, and so, before they'd sign off to give away bonuses with federal dollars, they would have made sure they knew the size and timing of those bonuses. It seems Geithner doesn't operate like the average money man. Scary.

Why did Obama decide to keep Geithner on board again? Let's do a rewind and look at him over one more time at The New York Times, November 2008. And to be fair, here's his official U.S. Treasury Department bio.

I don't know what it is, but this AIG drama is making me go all Mother Goose. A few days ago it was AIG's Liddy Piggies. Today it's Geithner as Little Jack Horner. Maybe it's that the AIG saga sounds as unbelievable as nursery rhymes.

1 comment:

SjP said...

Sounds a whole lot like "chicken little" to me. Just trying to figure out who Goosey Loosey, Henny Penny, and Turkey Lurkey are. Dodd is obviously Chicken Little cause the "ish" hit is butt right on the head. lol