Why Geithner Has To Go, And Who His Replacement Should Be, Sheila Bair of the FDIC

[Yavin4]

The Obama administration has made one huge mistake on this entire financial crisis, and that is that they trusted "Wall Street" people to correct the problem, instead of reform minded people. Geithner, like Bernake and Paulson, still cling to the child like belief that Wall Street Analysts, Brokers, and Dealers are the smartest people on planet earth and that they need to be given the time and federal tax dollars to rescue our financial system. This is why they allowed the AIG bonuses to go through even though AIG was bankrupt. This strategy is a failure largely because it's built on a myth. These guys are not smart. They're criminal. They devised a method of writing insurance policies without having to undergo the regulations that insurance companies have to operate under.

The approach that the Obama administration needs to take is that of reform. They need to pursue a Nationalization strategy wherein the government would seize these failed institutions and proceed with an orderly sell off of the good assets and unwinding the bad ones. The person who has the most experience doing this is FDIC Chair, Sheila Bair. In fact, she does this every Friday. Every Friday one or more smaller banks fail, and the FDIC adroitly nationalizes them with little or no fan fare.

You can read more about her here:

http://en.wikipedia.org/wiki/Sheila_C._Bair


Enough of this bullshit Masters of the Universe Wall Street hype, and let's move forward to an era of real reform.

[Thrill]

1. With Republicans calling for his resignation right now

I don't want him to go right now. And personally, I think he is being unfairly blamed.

[MarjorieG]

2. And without staff, thanks to Congress, we shouldn't have Geitner? He has an impossible job.

[Yavin4]

5. Geithner Was At The Fed When The First Bailout Was Given To AIG

And he never made a stink about the bonuses. Not then. And not after becoming Treas. Sec.

Obama needs a strong reformer in Treasury.

[amandabeech]

18. Perhaps Congress has a reason for being careful.

Timmy's tax problems and how many assistant's nominees have had to with draw?

The Senate doesn't look so good.

Obama is going to have to pick people very, very carefully which means a lot of staff time.

I hope that Obama's strategy of doing everything in the crisis is not having the effect of pulling staff away from picking and vetting good treasury appointments.

[Yavin4]

4. No, He Is Being Fairly Blamed

Geithner was at the Fed when the bonuses were first discussed. It should have been policy then to kill off those bonuses if AIG was to get any money at all. Even after he became Treas. Sec., he didn't move to kill the bonuses. This tells me that he is not a strong reformer. He's still more of the status quo guy.

As for Republicans, as long as Geithner is still there, he will become a target of derision for the Obama admin.

[ihavenobias]

21. What if a Republican said that about Karl Rove or Alberto Gonzales back in the day?

What if someone posted a comment from Free Republican that said "With Dumbocrats calling for Alberto's resignation right now I don't want him to go right now."

You'd be pissed right, and say he/she was putting politics ahead of what's best for the country? As for him being unfairly blamed, I have to hammer the point that he was part of the pro-deregulation crowd that helped start this whole financial meltdown to begin with.

[backscatter712]

3. Works for me.

Geithner clearly doesn't have his shit together.

[HiFructosePronSyrup]

6. Sheila Bair? The former Bob Dole staffer?

The one who cheats on her taxes and has an ibogaine problem?

No thanks.

[Yavin4]

7. I Cannot Find Any Articles Tying Bair Into Being a Tax Cheat or Ibogaine

As far as being a Dole staffer, that helps the cause.

[HiFructosePronSyrup]

8. It helps whose cause?

[Yavin4]

12. The Cause of Reform

Because she served Dole, she cannot be painted as a wild-eye, lefty who wants to destroy capitalism.

[HiFructosePronSyrup]

14. So we should be appointing republicans to the treasury...

because even though they caused this mess, it would defuse a talking point.

That's brilliant.

[Yavin4]

23. Wrong. We Should Put A Reformer In Charge of the Treasury

Which Bair is.

[elleng]

35. Right, And Brooksley Born.

Gotta get rid of summers, to whom geithner is firmly tied.

[elleng]

37. About Sheila Bair:

http://en.wikipedia.org/wiki/Sheila_C._Bair

[davidwparker]

9. "the smartest people on planet" - just the greediest people on the planet.

What has a man prospered if he gains the whole world and looses his own soul?

[Bold Sea Captain]

10. Obama will not sacrifice Geithner on Bush's altar

No matter how much some bitter enders would like him to.

[Yavin4]

11. Geithner Is Part of the Problem

He's not a reformer. He's a pro Wall Street guy, and it's hurting this admin.

[backscatter712]

19. Absolutely!

Everyone thinks it's just the right-wing out to get him. Well, the right-wing is out to get him, but the fact is that they're smelling blood in the water because Geithner is fucking up. He can't make the tough decisions, he's favoring Wall Street at the expense of doing what's necessary to fix this economy, and I'm questioning whether Geithner and Summers are on our side.

Bring in Robert Reich!

[truedelphi]

27. Sydney Herald in Australia knows quite a bit about Geithner

Most of it rather bad -

URL is here:

www.democraticunderground.com/discuss/duboard.php?az=view_all&address=114x60211

[eridani]

42. The difference between DU hate of Geithner and Repuke hate of Geithner is

--that we want him replaced with someone who has alwasy been pro-regulation, and the Repukes want him replaced with someone even worse.

[backscatter712]

13. I don't know Sheila Bair, but I would nominate Robert Reich.

He knows his shit when it comes to economics - he's been an advisor to Barack Obama and member of his transition team. He has cabinet experience as Clinton's Secretary of Labor, and did a damned good job there.

He's a Keynesian, which right there makes him a big improvement over Geithner and Summers.

While we're at it, bring in Paul Krugman as an economic advisor.

[Jennicut]

15. How many times must it be said that Krugman does not want any job

with the administration? I do like Reich however.

[backscatter712]

17. Not even as an advisor?

I remembered Krugman saying he didn't want to be on the Cabinet, which was why I was thinking he'd be a good advisor.

But I guess if he doesn't want it, he doesn't want it...

[Jennicut]

20. I doubt it. I think he wants to be an objective outsider.

[elleng]

36. Folks here should learn about Sheila Bair.

http://en.wikipedia.org/wiki/Sheila_C._Bair

[anonymous171]

16. He should just say "Fuck it" and appoint Ralph Nader. nt

[Dappleganger]

22. I agree, but only if the next person can be a real ball-buster.

We deserve to some some giant blue balls for the duration of this recession.

[PBS Poll-435]

24. Bair is a toxic liability at FDIC

Why in the hell would she be good at Treasury?


Her dealing of the Citi/Wachovia/Wells Fargo debacle was either gross incompetence or worse...

[truedelphi]

26. Sounds like you could tell a tale or two.

Sounds liek ithosetales would be an interesting read.

[PBS Poll-435]

38. Yeah.

Sheila Bair insisted on maintaining the acquisition of Wachovia's banking operations by Citigroup when a better deal (for everyone) was on the table. She made a public statement about standing behind Citi.

Wells Fargo made a bid 4 days after Citigroup did. Wells Fargo wanted to purchase the entire company, lumps and all, while Citi just wanted to prop up its ever shrinking capitalization with Wachovia's deposits. (And even THAT deal required FDIC assistance!)

In the end, Wells Fargo bought Wachovia at around $7.00 per share. Citi wanted about $1.33 per share. Wells Fargo saved the taxpayers by requiring no government assistance and not leaving Wachovia's other operations left to twist in the wind.

Either she was ignorant of the situation, or she was using her office to publicly advocate for Citigroup.

Either way, she was wrong.

[truedelphi]

39. I had followed that story here on DU but didn't know

Who exactly had purview over it. Now I know.

thanks.

[RoyGBiv]

34. Indeed ...

And the only reform measure I can really find about her since 2006 is her consistent pimping of so-called "payday loans."

She sells this as an attempt to allow low-income people to get away from the check-cashing places and take the business of short-term loans out of the hands of what are effectively legalized loan sharks, so it sounds good. But then you look at the details and consider the context. She argued for its necessity due to the number of depositors who used some sort of overdraft protection on a regular basis on the one hand and then talked about all the low-income individuals who weren't using the banking system at all and that these kinds of loans could bring them into the banking system. And, she of course added, it would be profitable for banks.

Well of course it would ... for awhile.

Anyway ... this thread got me interested, so I looked up a lot of newspaper articles about her dealing with something other than the Citi deal, and that's about all I could find that could conceivable fall under the heading of reform. Of course I'm sure I could have missed a lot, and it would be interesting to know what that might be.

But, the way she does things at the FDIC does not make me think of her as a good person to be in Treasury.

[TayTay]

25. This is vastly over reaching

The guy has only been in office for two months. I think that he has made some mistakes and there is a learning curve, but I think he is getting better.

What's next? Cabinet appointees who are appointed for weeks at a time then have to be re-confirmed. I mean, c'mon, this is completely premature and unfair.

[Yavin4]

28. The "Guy" Was At The NY Fed And Was Deeply Involved With Paulson And Bernake

He did not just fall off a turnip truck and walked into the Treasury. He was in the room when these bailout deals were negotiated.

In your zeal, you fail to see that Geithner's continued presence in this admin gives the Repubs the perfect foil on which to rebuild their popularity.

[janet118]

29. How about Harry Markopolis for Treasury Secretary?

He's the whistleblower that was screaming bloody murder to the SEC and the WSJ years before the Madoff scandal broke. Here's the http://online.wsj.com/documents/Madoff_SECdocs_20081217.pdf">report he sent that was ignored by all the "experts" and "regulators."

He is definitely not a Wall Street suck up and he knows his derivatives and hedge funds. Let him have at these greedheads.

[bajamary]

30. Timmy and Larry need to go

Both Timmy (former assistant to Kissinger) Geithner and Larry (yes, ladies your brains are smaller) Summers are acolytes of Robert (I'm a great chairman of Citibank) Ruben.

Robert Ruben was instrumental in the deregulating Wall Street, and the financial system.

So why in God's name with all that has been done (or not done) does Obama keep these fellows in his, rather our, employ?

I hate to think why.

[jeanpalmer]

31. It was wrong to appoint someone

who was too close to the problem. Wall Street created this catastrophe and Bernanke, Geithner and Summers are too close to Wall Street. We need someone who has some distance from the problem. There are all kinds of qualified people, I'm sure. Bill Siedman ran the cleanup of the savings and loan meltdown. Paul O'Neill seemed to be an honest person, has a good background. Lee Iacocca rescued Chrysler. We need someone who isn't just a Wall Street or political hack. Also, someone who can communicate with the American people and explain to them in detail what the problem is, what the risks are, and how it's going to be fixed along with the costs involved. Geithner, Bernanke, and Summers have shown themselves incapable of doing that imo. Timmy Larry and Benny seem to sit in the privacy of their little cubicles and make these momentous decisions withoit sharing anything substantive with us. It's just, "Give them $30 billion," "Buy a $trillion of Treasury bonds," etc. No detailed explanations. This isn't how a democracy is run.

[amandabeech]

32. Bill Siedman's still around.

I caught him on CNBC a couple of weeks ago (I'm laid off, sigh). They used to have him on every week making whole lots of sense, but not now. I can only guess why.

If he won't take the job, he'd be a tremendous adviser.

[truedelphi]

44. I was wondering who handled the S & L cleanup

Good to hear a name mentioned. I always cringe when some official says, "If only we had a game plan as to how to fix this mess."

We do have a game plan. The situation wherein we straightened out the failed S & L's back in the 1980's was not tremendously complicated and it worked. A bank was chosen in each region of the country, given a state charter and Federal Monies pumped into that bank to disperse. Those smaller, more local banks were into helping the problem. Wall Street banks are into helping themselves.

[LittleBlue]

33. Bair is incapable. I read some of the crap she wrote about

how America would benefit from buying shit assets from the banks.

We do not need another shill.

[Genoveseboy]

40. It's too early for anyone to go

People need to get a grip.

[Hippo_Tron]

41. Well, if you have all of the answers you should run for President then

Obama is doing exactly what Roosevelt did when he faced uncharted waters: trial and error. You try something and if it doesn't work, you try something else. Right now we haven't had enough time to see if his initial try hasn't worked. Obama gave Geithner and Summers the first crack at fixing this. But he didn't form that Special Economic Advisory Board for nothing. If Geithner and Summers fail, Obama will try something and somebody else. It is too early, however, to determine that they have failed.

[acmavm]

43. They could replace him with any republican and get the same

results we've gotten so far.

Oh wait, he was a republican.

No wonder.