Tim Geithner May Not Be As Bad As The Bush Treasury Secretaries, But That Bar Is Too Low

The worst of the die-hard reactionaries and racists who seem to find the GOP such a snugly place, didn't give Obama even one minute's worth of honeymoon. When did Limbaugh start screaming how he wanted the president to fail? Before the inauguration? And how soon after did the obstructionists and secessionists like Rick Perry, Jim DeMint, Richard Burr, Michele Bachmann and Mike Pence rush to find microphones to concur? Alan Grayson articulated the import of this for the nation: "If the president had a B-L-T tomorrow the Republicans will try to ban bacon."

But now the honeymoon is certainly over for the whole nation, even for people of good will. The president's approval numbers have slumped and his party has lost a great deal of trust-- and even the Democratic candidate for Ted Kennedy's old Massachusetts Senate seat seems like she could lose. People seem to be ready to forget that it wasn't just Bush who brought on the recession but the conscious and articulated policies of the Republican Party. Perhaps people would be more willing to keep that in mind if Obama had a team with more Hilda Solises and fewer Rahm Emanuels and Timothy Geithers.

Thursday the unraveling of Geithner-- which started when Obama made the terrible mistake of nominating him to be Treasury Secretary-- slipped into high gear. Now it's just a matter of time before Obama has no choice but to cut him lose; the sooner the better, for everyone's sake (except, of course, for the reactionaries and racists who want to see Obama fail).

The Federal Reserve Bank of New York, then led by Timothy Geithner, told American International Group Inc. to withhold details from the public about the bailed-out insurer’s payments to banks during the depths of the financial crisis, e-mails between the company and its regulator show.

AIG said in a draft of a regulatory filing that the insurer paid banks, which included Goldman Sachs Group Inc. and Societe Generale SA, 100 cents on the dollar for credit-default swaps they bought from the firm. The New York Fed crossed out the reference, according to the e-mails, and AIG excluded the language when the filing was made public on Dec. 24, 2008. The e-mails were obtained by Representative Darrell Issa, ranking member of the House Oversight and Government Reform Committee.

The New York Fed took over negotiations between AIG and the banks in November 2008 as losses on the swaps, which were contracts tied to subprime home loans, threatened to swamp the insurer weeks after its taxpayer-funded rescue. The regulator decided that Goldman Sachs and more than a dozen banks would be fully repaid for $62.1 billion of the swaps, prompting lawmakers to call the AIG rescue a “backdoor bailout” of financial firms.

Now, you probably already know that Issa, a criminal type himself and the richest person in the House of Representatives, is hardly a good-faith player. In fact, he's one of the worst of the worst. But sometimes even a rotten bastard like Issa hits on truth. “It appears," he brayed, "that the New York Fed deliberately pressured AIG to restrict and delay the disclosure of important information. [Taxpayers] “deserve full and complete disclosure under our nation’s securities laws, not the withholding of politically inconvenient information.” Barney Frank-- who's no Darrell Issa-- also finds this "troubling" and wants to see congressional hearings. Ditto for Edolphus Towns, chairman of the House Committee on Oversight and Government Reform.