There's a very good diary on the Rec List right now, by Kossack Forrest Brown, entitled, "BREAKING: Geithner Opposes Elizabeth Warren for Consumer Protection Board!" It tells us of a breaking story on HuffPo relating to Treasury Secretary Tim Geithner's grossly transparent attempt, this evening, to torpedo the appointment of Elizabeth Warren as the first chairperson of the newly-created (as of today's passage of the financial regulatory/FinReg reform legislation) Consumer Financial Protection Bureau. But, there's a lot more history here than meets the eye.
Others, including Pulitzer Prize-winning New York Times business journalist Gretchen Morgenson, in her brilliant expose of Treasury Secretary Geithner, 15 months ago, appear to rather vehemently agree with this assessment, as well. See: "Geithner, Member and Overseer of Finance Club." (BTW, This is one of my all-time favorite pieces of journalism as far as the Great Recession's concerned.)
Tonight, in the comments to Forrest Brown's diary, it was mentioned that Geithner might be acting as a henchman to payback DINO Senator Ben Nelson, in the deal he cut with Senate leadership, earlier in the week, which delivered up his vote for the FinReg bill today. (Nelson does not want Warren chairing this new watchdog agency either.) I also covered the Nelson-Warren angle in my diary, yesterday:
A Bastille Day Reminder: We Reap What We Sow
July 14, 2010
...Yes, I don't think Paul Volcker was thinking about taking 12 years to put a saddle on Wall Street when he recently stated: "The Time We Have Is Growing Short."
Regrettably, with every Wall Street lobbyist's breath behind closed doors, the heavily-diluted financial regulatory reform bill (FinReg) morphs into a bigger farce with every passing day.
--Over the past 24 hours, we're hearing that DINO Senator Ben Nelson may have compromised the one dim light that remained in that now-deeply-captured piece of rotting legislative sausage--up until yesterday, Democrats could at least point to a Consumer Financial Protection Agency that may have been run by one of the few middle class heroes still standing amidst this squid pro quo clusterf*ck--but even the potential management of that Board by Elizabeth Warren is in question today, now moreso than ever...
To read more on this "squid pro quo," click on the link to a TPM piece on the matter, from Tuesday, RIGHT HERE.
But, the truth is, Warren's been gnawing away at Tim Geithner's ankles for quite some time. And, IMHO, for many damn good reasons!
I strongly endorse the effort to support Elizabeth Warren's appoinment as Chairperson of the CFPB. She's one of the very few folks still holding the torch for Main Street in that totally captured enclave up on Capitol Hill. Support Forrest Brown's appeal to our senses and sign the petition to appoint Liz Warren to that position. If you're not going to do it based upon what you've read in the past few hours, here's something I posted from 2009 which will, hopefully, jar your memory and propel you into action!
My diary from April 4th, 2009...
# # #
TARP Watchdog Issuing "Damning" Report. Calls Geithner's Actions: "...Preposterous."
April 7, 2009
It certainly looks like Congressional TARP Oversight Watchdog Elizabeth Warren is heading for a showdown over the next couple of days with Treasury Secretary Tim Geithner with regard to his handling of the TARP Program to date.
Daily Kos diarist BigChin posted a great diary here about all of this, approximately 24 hours ago, entitled, Elizabeth Warren, Watchdog, Says Sack the CEO's. The focus in BigChin's diary was with regard to the comments provided by Ms. Warren concering the proposed sacking of a handful of CEO's associated with some of our country's largest bailout recipients. Essentially, it was a recap (but with great, detailed background) on the following story, which pretty much speaks for itself: "US watchdog calls for bank executives to be sacked." But, I think there's a clearly defined story here, and it's the reality that all of this may very well be setting the stage for a showdown between the two over the next couple of days, since we're more or less told this, outright, within in the following piece:
US watchdog calls for bank executives to be sacked
James Doran in New York
The Observer, Sunday 5 April 2009
Elizabeth Warren, chief watchdog of America's $700bn (£472bn) bank bailout plan, will this week call for the removal of top executives from Citigroup, AIG and other institutions that have received government funds in a damning report that will question the administration's approach to saving the financial system from collapse.
Warren, a Harvard law professor and chair of the congressional oversight committee monitoring the government's Troubled Asset Relief Program (Tarp), is also set to call for shareholders in those institutions to be "wiped out"...
...Warren also believes there are "dangers inherent" in the approach taken by treasury secretary Tim Geithner, who she says has offered "open-ended subsidies" to some of the world's biggest financial institutions without adequately weighing potential pitfalls. "We want to ensure that the treasury gives the public an alternative approach," she said, adding that she was worried that banks would not recover while they were being fed subsidies. "When are they going to say, enough?" she said...
...She said she did not want to be too hard on Geithner but that he must address the issues in the report. "The very notion that anyone would infuse money into a financially troubled entity without demanding changes in management is preposterous."
Warren ever so slightly tempers her comments about Geithner, but a quick look at her public comments on this matter, up until now, indicates there's significant animosity between the two.
As BigChin reminds us, Warren serves under the auspices of Congress, and without much real power. But, she is the go-to person responsible for oversight of the TARP program in that legislative body, nonetheless.
Here's some more from Warren and others on this matter...
Since day one, there's been virtually no oversight cooperation from the Treasury Department with regard to the government's Troubled Asset Relief Program ("TARP"). Unless you've been living in a cave, this is quickly escalating from its originally-budgeted $700 billion to what will certainly be breaking the $2 or $3 trillion mark this year.
Hardly one damn spec of oversight enabled on this massive program, whatsoever?
Then there was this piece from HuffPo, from a little over three weeks ago: "TARP Oversight Panel Says It's Been Ignored By Geithner And Paulson."
Oversight Panel Says It's Been Ignored By Geithner And Paulson
Congress Daily | By Bob Kemper | 03/11/09
The Congressional Oversight Panel, the group charged with overseeing how the federal government allocates $700 billion to prop up the nation's financial institutions, supports greater public disclosure of how the program is working, but the panel itself often can't get the information it needs to do its job, members said today. Damon Silvers, the oversight panel's deputy chairman, told the Joint Economic Committee that he and other panel members are waiting for Treasury Secretary Geithner to appear before them to explain how the Obama administration plans to help failing banks. Among the things the panel still needs to know is how the administration plans to deal with the toxic assets like failed loans and foreclosures that are bogging down banks, panel members said.
The oversight panel had asked Henry Paulson, Treasury secretary in the Bush administration and the chief architect of the Troubled Asset Relief Program, for the same information but never heard back from him, Silvers said. The bottom line, panel members said, is that even though about $300 billion has been spent and another $350 billion has been made available to bail out financial institutions, those who are supposed to be overseeing the program lack the information they need to perform their duties, Silvers said...
With the widely-viewed Scott Pelley piece from 60 Minutes on Sunday, and now this, it sure looks like the crap's about to hit the fan for Tim & Company over the next few days. I can practically see the congresscritters lining up for their soundbites on this one already.
# # #
UPDATE: SIMON JOHNSON GOES NUCLEAR ON GEITHNER FOR BLOCKING WARREN
Simon Johnson, author, M.I.T. economist, and former International Monetary Fund ("IMF") Chief Economist, in his latest post at his Baseline Scenario blog on Thursday evening, absolutely devastates--unlike I've ever seen Johnson ravage anyone, up until now--Treasury Secretary Tim Geithner for attempting to block Liz Warren's potential appointment as the chair of the new Consumer Financial Protection Bureau in: "Tim Geithner's Ninth Political Life."
Tim Geithner's Ninth Political Life
By Simon Johnson
July 15, 2010 at 8:59 pm
In modern American life, Treasury Secretary Tim Geithner stands out as amazingly resilient and remarkably lucky - despite presiding over or being deeply involved in a series of political debacles, he has gone from strength to strength. After at least eight improbably bounce backs, he might seem unassailable. But his latest mistake - blocking Elizabeth Warren from the heading the new Consumer Financial Protection Bureau - may well prove politically fatal.
Bold type is diarist's emphasis.
Frankly, I haven't seen many folks takedown another person in public like Johnson does it to Geithner tonight.
Johnson rattles off no less than eight major Geithner ("lives") career fiascos over the past 13 years:
Life #1.) A member of the team that "badly mishandled" the Asian financial crisis. (1997)
Life #2.) Had an embarrassing track record as President of the NY Fed, where he failed to spot problems with our economy.
Life #3.) Bush administration Treasury Secretary Hank Paulson's point person on one of the most "comprehensively bungled bailouts of all time." ("Appalled" Congress with TARP's intentions and "then didn't use the money as advertised.")
Life #4.) Almost failed confirmation process for Treasury Secretary due to personal tax issues.
Life #5.) "Stumbled badly with his initial public repositioning of the TARP."
Life #6.) Instituted stress tests a few months after Obama took office. Claimed most banks had plenty of capital. All the government had to do was endorse the test results (which it did) to make them valid.
Life #7.) Volcker came onboard in the Summer of Obama's first year in office, and "...instead of (appropriately) discrediting the Geithner approach in the eyes of the White House, it actually helped the Treasury Secretary climb new pinnacles of influence."
Life #8.) Geither's only real semblance of a strategy was to "just raise capital requirements". Actual result: "Capital requirements will barely be raised in any meaningful sense. "
...it now appears that Secretary Geithner will oppose Elizabeth Warren becoming the new chief regulator responsible for protecting consumers from defective financial products - despite the fact that she has led the way for this issue, on both intellectual and political fronts, over the past decade. The financial sector has abused many of its customers badly over the past decades. This simply needs to stop...
Johnson concludes that Geithner feels he can push hard against Warren in an effort to put someone more banking industry-friendly in the CFPB chair.
...In the end, of course, no one ... proves indispensible. And everyone of this sort eventually pushes their luck too far.
If the Democratic leadership really wants to win in the November elections, they should think very hard about the further consequences of Mr. Geithner.
Frankly, Johnson's post was significantly more eviscerating of Geithner than even this summary, immediately above. Click on the link to the full piece, near the top of this diary, to check it out. It's a serious can of whoop-ass!
# # #