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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsRobert Reich: Tim Geithner and the Wall Street Bailout Redux
Tim Geithner and the Wall Street Bailout Redux
TUESDAY, MAY 13, 2014
Timothy Geithners new book about the financial crisis, Stress Test, is basically an argument that the Wall Street bailout succeeded. Thats hardly surprising, given that Geithner was in charge of the bailout when Treasury Secretary (as was his predecessor at Treasury, Hank Paulson), and so has an inherit interest in telling the public it succeeded.
Even so, the bailout clearly did succeed, if success means avoiding another Great Depression.
But another Great Depression might have been avoided if the crisis had been handled differently for example, by allowing the bankruptcy laws to do what they were intended to do, and forcing the big Wall Street banks to reorganize under them.
......(snip)......
So pardon me if I take issue with Tim Geithner. The bailout was a success in the narrowest terms. Seen more broadly it was a terrible failure. ................(more)
The complete piece is at: http://robertreich.org/post/85654652535
xchrom
(108,903 posts)Ichingcarpenter
(36,988 posts)(1) The biggest Wall Street banks are now bigger than ever, and no sane person on or off the Street now believes Washington will ever allow them to fail which means theyll continue to make big, risky bets because they know they cant fail. And theyll get even bigger because big depositors and lenders know theyll never fail and therefore demand lower interest rates than demanded from smaller banks.
(2) No Wall Street executives have ever been prosecuted for what they did to the country, which means even more rampant irresponsibility in executive suites as well as even deeper cynicism in the public about the political power of Wall Street.
(3) The bailout helped the banks but did little or nothing for the tens of millions of Americans who lost billions of dollars in home equity and savings, and the millions more who lost their jobs. The toll was greatest on the poor and the middle class, who still havent recovered their losses, even though Wall Street has fully recovered (and then some). Nor have reforms been enacted that will help the middle class and the poor the next time Wall Street implodes.
So pardon me if I take issue with Tim Geithner. The bailout was a success in the narrowest terms. Seen more broadly it was a terrible failure.
rock
(13,218 posts)And this of course raises the question that Louis XVI had, "How far can I push these idiots and squeeze them for all they're worth!" You know, so he can stop short of getting beheaded.
Enthusiast
(50,983 posts)CTyankee
(63,912 posts)but Reich makes a lot of sense. But maybe Geithner's book is just one big CYA...
bullwinkle428
(20,629 posts)and the results were utterly EPIC!
"It's a gunfight at the Book Tour Corral, y'all. As we know, Senator Professor Warren is out there on her new it's-not-a-campaign-book-honest caravan and now comes Timothy Geithner with his own account about how he and the other Masters Of The Universe saved us all from ruin, and can we all just give him the ovation he deserves, and perhaps an oceanside palace. In his book, Geithner manages, with help from career dickhead Rahm Emanuel, to be stupid, sexist, and condescending all at the same time on the subject of Senator Professor Warren."
Heeeeeeeeere's Timmeh!
"We were initially amused, and eventually a bit annoyed, when Warren, who had spent so much time bemoaning Treasury's nefarious work against the public interest, quickly began trying to hire away a bunch of our staffers," Geithner wrote. "She was unapologetic when my team confronted her about it."
Oh, the hard lot of the economic royalist when the ladies do not remain amusing, but become annoying, and then fail to apologize when confronted about their annoyingness when they are called to account by their betters. And there's a reason why police departments put car thieves on retainer. Hiring crooks to find crooks is a time-honored law enforcement technique."
http://www.esquire.com/blogs/politics/timothy-geithner-book-elizabeth-warren-051314
mountain grammy
(26,620 posts)PoliticAverse
(26,366 posts)merrily
(45,251 posts)Clinton and Greenspan both urged Congress to pass and get on Clinton's desk for his signature ASAP.
Where was Reich's public voice then?
And, no, the bailout did not cause the depression in 2008. The bailout was supposedly an attempted remedy, one highly recommended by Geithner, another guy who oversaw the causes of the 2008 near global economic collapse.
Did Reich speak out against it in 2008? He was not only in Clinton's cabinet, but a member of Obama's transition board. Where was he public voice when Obama gave Bush the go ahead on TARP II?
I am glad that someone is saying things that need to be said, but I find it difficult to cheer Reich as an individual, especially on the subject of the bailout.