geithner

Welcome to the recovery! That's what Treasury Secretary Timothy Geithner wrote in the New York Times this week. And such good news! We've all been waiting to be told that the economy was improving, after all.

Beauty's in the eye of the beholder, especially, apparently, the beauty of bailouts. In the U.S. right now, some see robust growth, others a limping progress. Some see unemployment edging down, others see it spiking up. It's all about the beholder. The U.S. Treasury is now estimating the cost of the bailout at $89 billion, considerably less than what's been reported since the fall of 2008. The $89 billion figure fits nicely into the vision of Treasury Secretary Tim Geithner who, as head of the New York Fed, was the point-man under Bush, overseeing the hand-out of dough to Wall Street. But where Geithner sees gentle waves, New York Times business reporter Gretchen Morgenson sees tsunamis -- counting it all up in the $1 trillion range. For one, there's the cost of lending to banks at near zero interest rate set that against what banks charge us -- which is to say an average 14% on credit cards -- and what they pay back in interest to depositors -- far too little, most of us think. Morgenson points to FDIC losses in taking over failed banks, including loss-sharing costs shouldered by taxpayers. That she puts at $400 billion. Against that, Geithner's $89 billion starts to fade fast. There's just one more thing left out of Geithner's figures: implied government guarantees, or what one bank analyst calls the "noxious byproduct" of systemic risk. A "deliberate low-balling that underestimates damage to the wider economy," that analyst observed, obscures $4 trillion in lost output globally, losses that can be permanent or persistent, in his words. So take your pick -- gentle waves or a global tsunami. Feel better yet? The F Word is a regular commentary by Laura Flanders, the host of GRITtv which broadcasts weekdays on satellite TV (Dish Network Ch. 9415 Free Speech TV) on cable, and online at GRITtv.org and TheNation.com. Support us by signing up for our podcast, and follow GRITtv or GRITlaura on Twitter.com. Distributed by Tubemogul.

Two earthquakes, two vastly different consequences. If anything makes you appreciate solid foundations (not to mention building codes), it's the sight of those San Diego buildings swaying -- but not falling -- in Sunday's 7.0 quake; the same size quake that devastated Haiti. When it comes to our economy, however, the foundations look anything but secure. GRITtv with Laura Flanders brings participatory democracy onto your computer screen and into your living room, bridging the gap between audience and advocates. Watch any show, at any time: http://grittv.org Distributed by Tubemogul.

We talked about the economy today, and whether Treasury Secretary Tim Geithner deserves more credit. What he should be getting credit for, it seems to me, is that Lehman Brothers report -- well, not the report, but the cover-up.
To give you the thumbnail sketch, a court-appointed bank examiner spent a year researching the fall of Lehman -- the trigger for the bailout crisis. As it turns out, surprise surprise, the accounting at Lehman was, to put it mildly, shifty... and our guests aren't the only ones asking what did Geithner know and when did he know it?
Yves Smith at Naked Capitalism is noting, "The NY Fed, and thus Timothy Geithner, were at a minimum massively derelict..."
Mike Whitney over at CounterPunch is faking disbelief: "Is there really any doubt that Tim Geithner at the New York Fed, or Bernanke knew that Lehman was trading its junk assets to finance its on-going operations?"
If Geithner and Bernanke didn't know what was going on at Lehman, that's bad. If they knew, that's worse. One way, you've got to wonder why they're still in work. The alternative is that it was all part of some bigger, nastier scam, which transferred huge amounts of wealth from taxpayers back to the very banks that created the crisis.
They shouldn't just be out of work, quite possibly, Geithner or Bernanke (or both) should be in the clink. We learned long ago that this President can cut bait when he thinks it's called for. Candidate, then president Obama has broken with his preacher, his green jobs guru, his social secretary. The last, Desiree Rogers, apparently got the boot for letting gatecrashers into last fall's first State Dinner.
If she can get the boot for letting strangers into a feast, surely Bernanke and Geithner should get at least that for covering up for the banks who ate up our whole economy? Or does Obama only get tough with homies?
The F Word is a regular commentary by Laura Flanders, the host of GRITtv which broadcasts weekdays on satellite TV (Dish Network Ch. 9415 Free Speech TV) on cable, and online at GRITtv.org and TheNation.com. Follow GRITtv or GRITlaura on Twitter.com.