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Wllliam Black on Geithner and Obama

I wish people would stop asking me for insight into what Tim Geithner has been thinking since June 2009. I think I understand the President--you work 90 hours a week, 30 of which are ceremonial, 30 of which are coalition maintenance, and 30 of which are policy, of which macroeconomic and financial policy are only one of ten important issue areas. Thus if you are a president you spend three hours a week on macroeconomic and financial policy--about 30% of what we expect freshman taking "Principles of Economics" to spend. You can't master any of the technical issues. You have to trust advisors.

But Geithner? The current theory is that he really did not understand and did not want to understand the difference between 1993 and 2009--that there is a big difference between a situation in which there is a threatened run from and one in which there is an active run to Treasuries, and a situation in which the clean-up of the financial mess is already well in hand and one in which it needs to be undertaken.

Bill Black:

President Obama wanted the love (and the contributions) of the banksters. He chose Timothy Geithner to be his pipeline…. Geithner shared Obama’s lack of passion for holding the banksters accountable for their frauds…. We have known the core of these sad facts for years, for they were revealed (irony of ironies) in a May 22, 2010 article whose theme was that we had all done Geithner and Obama a terrible injustice by criticizing them for their servile approach to the banks….

I argued in my first appearance on Bill Moyer’s in April 2009 that Obama’s acceptance of Geithner’s advice to serve the interests of the banksters rather than America could cost him reelection…. The single most important thing that Obama could have done to respond effectively to the crisis and to prevent future crises was to take on the systemically dangerous institutions (SDIs) whose fraudulent CEOs drove the crisis….

The “price” that results from allowing elite frauds to become wealthy with impunity is endemic fraud, recurrent financial crises, grotesque economic inefficiency, and the perversion of markets and democracy through the descent into crony capitalism. Geithner will not bear this “price” – America and Americans will. We were not informed of this price or asked whether we were willing to bear it….

Our saying as regulators during the S&L debacle remains true today:  “the best return on assets is always a political contribution.”  In our day, the political contributions were used to influence politicians who sought to block us…. Geithner’s answer to Congressman Ron Paul’s question about his role as the chief regulator of many of the nation’s largest bank holding companies was “I was never a regulator.” So true, but you’re not supposed to admit it…. Obama followed Geithner’s advice and did not shape Dodd-Frank to target the true causes, particularly accounting control fraud, of the financial crisis….

Obama does not stand for anything positive when it comes to the banksters or distressed homeowners…

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