This front page piece published today in the NY Times talks about Treasury Secretary Geithner and the ties he forged with many of the nation’s most powerful financial institutions. Here are a few excerpts from the 5,000 word article:
From The NYT: An examination of Mr. Geithner’s five years as president of the New York Fed….shows that he forged unusually close relationships with executives of Wall Street’s giant financial institutions.
His actions, as a regulator and later a bailout king, often aligned with the industry’s interests and desires, according to interviews with financiers, regulators and analysts and a review of Federal Reserve records.
Traditionally, the New York Fed president’s intelligence-gathering role has involved routine consultation with financiers, though Mr. Geithner’s recent predecessors generally did not meet with them unless senior aides were also present, according to the bank’s former general counsel.
By those standards, Mr. Geithner’s reliance on bankers, hedge fund managers and others to assess the market’s health — and provide guidance once it faltered — stood out.
His calendars from 2007 and 2008 show that those interactions were a mix of the professional and the private.
He ate lunch with senior executives from Citigroup, Goldman Sachs and Morgan Stanley at the Four Seasons restaurant or in their corporate dining rooms….Mr. Geithner was particularly close to executives of Citigroup, the largest bank under his supervision.[He] met frequently with Sanford I. Weill, one of Citi’s largest individual shareholders and its former chairman..But for all his ties to Citi, Mr. Geithner repeatedly missed or overlooked signs that the bank — along with the rest of the financial system — was falling apart.
To Joseph E. Stiglitz, a Nobel-winning economist at Columbia and a critic of the bailout, Mr. Geithner’s actions suggest that he came to share Wall Street’s regulatory philosophy and world view.
“I don’t think that Tim Geithner was motivated by anything other than concern to get the financial system working again,” Mr. Stiglitz said. “But I think that mindsets can be shaped by people you associate with, and you come to think that what’s good for Wall Street is good for America.”
In this case, he added, that “led to a bailout that was designed to try to get a lot of money to Wall Street, to share the largesse with other market participants, but that had deeply obvious flaws in that it put at risk the American taxpayer unnecessarily.”
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Who did the Wall Street Mafia piss off at NYT ? Yeesh.
I loved the article… but your analysis is much tamer than mine: http://www.jrdeputyaccountant.com/2009/04/ny-times-on-ny-fedgeithner-conflicts-of.html I was happy to jump on the AIG/Goldman connection, as well as Geithner’s questionable relationship with BlackRock.
Either way, I can’t believe NYT even published this…
Everything Geithner does is questionable since he clearly represents only the interests of those who put him in charge.