[Marxism] Geithner Talks To Select Group Of Bankers Every Day
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Thu Oct 8 07:30:12 MDT 2009
Geithner Talks To Select Group Of Bankers Every Day
MATT APUZZO and DANIEL WAGNER | 10/ 8/09 08:27 AM | AP
WASHINGTON — Even during his most frenzied days, when Congress is
demanding answers or the president himself is calling, Treasury
Secretary Timothy Geithner makes time to talk to a select group of
powerful Wall Street bankers.
They are a small cadre of businessmen who have known and worked with
Geithner for years, whose multibillion-dollar companies all survived
the economic crisis with help from U.S. taxpayers.
When they call, Geithner answers. He has spoken with them immediately
after hanging up with President Barack Obama and before heading up to
Capitol Hill, between phone calls with senators and after talking with
the Federal Reserve chairman, according to a review by The Associated
Press of seven months of his appointment calendars.
The calendars, obtained by the AP under the Freedom of Information
Act, offer a behind-the-scenes glimpse at the continued influence of
three companies – Citigroup Inc., JPMorgan Chase & Co. and Goldman
Sachs Group Inc. – whose executives can reach the nation's most
powerful economic official on the phone, sometimes several times a
There is nothing inherently wrong with senior Treasury Department
officials speaking regularly with industry executives, or even with
the secretary keeping tabs on the market's biggest players, even
though critics say Geithner risks succumbing too much to these
bankers' self-interested worldview.
"It's appropriate for Treasury officials to keep in touch with those
who work in the markets every day, particularly when the economy and
the markets are so fragile," Treasury spokesman Andrew Williams said.
What the calendars show, however, is that only a select few can call
the treasury secretary.
After one hectic week in May in which the U.S. faced the looming
bankruptcy of General Motors and the prospect that the government
would take over the automaker, Geithner wrapped up his night with a
series of phone calls.
Story continues below
First he called Lloyd Blankfein, the chairman and CEO at Goldman. Then
he called Jamie Dimon, the boss at JPMorgan. Obama called next, and as
soon as they hung up, Geithner was back on the phone with Dimon.
While all this was going on, Geithner got a call from Rep. Xavier
Becerra, a California Democrat who serves on committees that help set
tax and budget policies.
Becerra left a message.
In the first seven months of Geithner's tenure, his calendars reflect
at least 80 contacts with Blankfein, Dimon, Citigroup Chairman Richard
Parsons or Citigroup CEO Vikram Pandit.
Geithner had more contacts with Citigroup than he did with Rep. Barney
Frank, D-Mass., the lawmaker leading the effort to approve Geithner's
overhaul of the financial system. Geithner's contacts with Blankfein
alone outnumber his contacts with Sen. Christopher Dodd, D-Conn.,
chairman of the Senate Banking Committee.
Partly this is explained by the extraordinary clout of these
companies. Goldman, JPMorgan and Citigroup are among the dominant
players on Wall Street. Their executives can move not just markets but
entire economies. Treasury invested heavily in all of them to keep the
But size does not tell the whole story. Treasury has a huge financial
stake in North Carolina-based Bank of America Corp., but CEO Ken Lewis
appears on Geithner's calendars only three times. Morgan Stanley CEO
John Mack also appears three times.
Geithner's relationship with Goldman, JPMorgan, Citigroup and their
executives dates to his tenure as president of the Federal Reserve
Bank of New York. As one of Wall Street's top regulators, Geithner
worked closely with executives and built relationships he brought with
him to his corner office at the Treasury Department.
The prominence of those relationships is clear by the company they
keep on Geithner's calendars.
On March 24, just after Geithner announced plans to help banks sell
off toxic debts left over from the housing market meltdown – which
stood to be a boon for big banks – his calendars reflect a busy
morning. He had a briefing on terrorism financing, a meeting on
tightening financial regulations and a prep session for congressional
Geithner emerged to take just three phone calls, from Vice President
Joe Biden, New York Attorney General Andrew Cuomo and shortly before
heading to Capitol Hill, from Dimon.
Officials at JPMorgan, Citigroup and Goldman had no comment on
Geithner's predecessor at Treasury, Henry Paulson, similarly kept in
close touch with Wall Street power brokers. Though his calendars
showed many contacts with bankers at the height of the banking crisis,
they showed frequent calls with Blankfein at key times. Paulson came
to Treasury from Goldman.
At the New York Fed and then at Treasury, Geithner helped put together
multibillion-dollar taxpayer bailouts for Wall Street investment
firms, including Goldman, JPMorgan and Citi. Even banks that have
repaid the money still enjoy massive subsidies. Their quick returns to
record profits and million-dollar bonuses sparked outrage.
Critics said the government was too quick to help the banks and was
unwilling to let them suffer the consequences of their bad bets.
Geithner's calendars could contribute to the perception that the
treasury secretary is too close to Wall Street, said Simon Johnson, a
former chief economist with the International Monetary Fund and
professor at the Massachusetts Institute of Technology's Sloan School
"Your worldview in the middle of a crisis depends on whom you talk to
and what their perspective is, and you need a broad cross-section of
opinions to truly understand what's happening," Johnson said.
By seeking information from such a narrow group of contacts, Johnson
said, Geithner risks limiting his exposure to the views of his trusted
Geithner must believe he can set aside their inherent biases, he said,
adding, "I don't see how you do that."
Read more at: http://www.huffingtonpost.com/2009/10/08/geithner-talks-to-select-_n_313612.html
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