I've had a lot of help from DKos members in comments making my last diary better. Now we can walk slowly through Geithner's career so you can see why his resignation would be best for America. So Geithner begins his career in the public sector
He was deputy assistant secretary for international monetary and financial policy (1995–1996), senior deputy assistant secretary for international affairs (1996-1997), assistant secretary for international affairs (1997–1998).
Then he makes a high paying move into something that is not the public sector - more on the exact nature of Fed banks later
In October 2003 at age 42, he was named president of the Federal Reserve Bank of New York. His salary in 2007 was $398,200. Once at the New York Fed, he became Vice Chairman of the Federal Open Market Committee component. In 2006, he also became a member of the Washington-based financial advisory body, the Group of Thirty. In May 2007 he worked to reduce the capital required to run a bank. In November he rejected Sanford Weill's offer to take over as Citigroup's chief executive.
If you believe public officials cannot be influenced by money please elsewhere. Otherwise continue for bribes and lies...
The Federal Reserve Bank of New York has a board of directors that votes on Geithner's salary. Three members of the board are politically appointed and have chair and deputy chair rolls. The remaining six
Class A elected by member banks to represent member banks
Richard L. Carrión (bio) 2010
Chief Executive Officer and Chairman
Banco Popular de Puerto Rico
Charles V. Wait (bio) 2011
President, Chief Executive Officer and Chairman of the Board
The Adirondack Trust Company
Jamie Dimon (bio) 2009
Chairman of the Board and Chief Executive Officer
JPMorgan Chase
and three more nominated by banks
Class B elected by member banks to represent the public
Jeffrey R. Immelt (bio) 2011
Chairman and Chief Executive Officer
General Electric Company
Jeffrey B. Kindler (bio) 2009
Chairman and Chief Executive Officer
Pfizer
James S. Tisch (bio) 2010
President and Chief Executive Officer
Loews Corporation
Now how much leeway does the board have in setting salary? Good question
Under current policies, appointment salaries for Federal Reserve Bank presidents are normally 85 percent of the salary-range midpoint (an 85 compa-ratio), with the exception of the New York Reserve Bank president, whose appointment salary normally is set at a 95 compa-ratio. The Board has discretion to approve a higher starting salary if requested by a Reserve Bank's board of directors.
And was that request made? Yes it was
In January 2009, the Board of Governors, at the request of the Federal Reserve Bank of New York's board of directors, approved a special separation payment of $434,686 to Bank president Timothy Geithner.
And why shouldn't they - apparently Timothy had done a good job keeping secret from the public (thanks bobswern) the extent of the banks insolvency. So now Geithner takes office as Secretary of Treasury and makes a lot of extremely dubious statement - I'm going to say lies:
From his confirmation hearing
Many people believe the program has allowed too much upside for financial institutions, while doing too little for small business owners, families who are struggling to keep their jobs and make ends meet, and innocent homeowners.
We have to fundamentally reform this program to ensure that there is enough credit available to support recovery. We will do this with tough conditions to protect the taxpayer and the necessary transparency to allow the American people to see how and where their money is being spent and the results those investments are delivering.
and then announcing his plan
Our plan will help restart the flow of credit, clean up and strengthen our banks, and provide critical aid for homeowners and for small businesses. As we do each of these things, we will impose new, higher standards for transparency and accountability.
and then about the solvency of banks
SEC. GEITHNER: None of those 19 banks are at risk for insolvency. Now, again, these banks, they bear the biggest responsibility for making sure that they can reassure investors that they're going to be strong and viable in the future. We'll indeed help them do that if that's necessary, but they bear the responsibility for making sure they can convince their investors and their creditors that they can get through this with a strong, viable franchise, and I think they're going to be able to do that.
Plus (Easter egg) we know that Geithner calls his former director Jamie Dimon of JPMorgan all the time.
Now some of you may say - hey this is all just one big coincidence - no one could of seen this coming. But Ralph Nader (yeah I'm not a fan of Nader helping cause 8 years of hell but that is not the point here) did see it coming in 1998
Of course, in a period of record profits the FDIC has stopped assessing for a rainy day ahead of time. Listen, when Paul Volcker, the former chairman of the Federal Reserve Board, warns against breaking down the barriers between banking and commerce and securities and industry, we'd better listen. Here's a man right out of Wall Street, major figure in American financial activity, testifying a few months ago before the Congress, saying, look, you're going to have cross subsidization, you're going to have the taxpayer having to fund failures in say the securities area and insurance area, instead of just supporting the deposits in a bank. It raises the risk factor and brings in crony capitalism where banks will favor their own subsidiaries and affiliates in terms of loans, et cetera, just the way we're decrying now in Asia. We're saying crony capitalism is bad in Asia but it's okay to bring it back here, and concentrate power even more.
Corruption is not just something that happens in other countries - Global Corruption Report 2009
When executives award themselves massive compensation packages without adequate oversight they divert company resources into their own pockets, and set an example of greed likely to permeate the culture of the company. Where to draw the line between appropriate compensation and excess is an open question, but the sums involved are certainly far from trivial. Between 1993 and 2003 packages for only the top five executives of all publicly held companies in the United States totalled US$350 billion, absorbing 6.6 percent of net income during this period.
There is no reason to have any corporation on the board of directors of a Fed bank - what we are concerned the corporations won't have enough influence!!! And even if you want to structure the fed this way there is certainly no reason to revolving door FRBNY presidents in and out of public office. Now that we have made that mistake and its a disaster - let's correct it please - Mr. President?
Note thanks to sullivanst for comments in the last diary and a good link on the setup of the Federal Reserve System.