Tag: Geithner

Timmy-Gate: Did Geithner Help Hide Lehman’s Fraud?

Timmy-Gate: Did Geithner Help Hide Lehman’s Fraud?   By L. Randall Wray

Timmy-Gate Takes a Turn For The Worse: Did Geithner Help Lehman Hide Accounting Tricks?

Just when you thought that nothing could stink more than Timothy Geithner’s handling of the AIG bailout, a new report details how Geithner’s New York Fed allowed Lehman Brothers to use an accounting gimmick to hide debt. The report, which runs to 2200 pages, was released by Anton Valukas, the court-appointed examiner. It actually makes the AIG bailout look tame by comparison. It is now crystal clear why Geithner’s Treasury as well as Bernanke’s Fed refuse to allow any light to shine on the massive cover-up underway.

Recall that the New York Fed arranged for AIG to pay one hundred cents on the dollar on bad debts to its counterparties-benefiting Goldman Sachs and a handful of other favored Wall Street firms. (see here) The purported reason is that Geithner so feared any negative repercussions resulting from debt write-downs that he wanted Uncle Sam to make sure that Wall Street banks could not lose on bad bets. Now we find that Geithner’s NYFed supported Lehman’s efforts to conceal the extent of its problems. (see here) Not only did the NYFed fail to blow the whistle on flagrant accounting tricks, it also helped to hide Lehman’s illiquid assets on the Fed’s balance sheet to make its position look better. Note that the NY Fed had increased its supervision to the point that it was going over Lehman’s books daily; further, it continued to take trash off the books of Lehman right up to the bitter end, helping to perpetuate the fraud that was designed to maintain the pretense that Lehman was not massively insolvent.

The hitman: Tim Geithner

I just realized what has been nagging at the back of my mind about the creepy demeanor of Treasury Secretary Geithner. He has the affectless expression of a hitman, but he is a special kind of hitman. Like John Perkins, the author of “Confessions of an Economic Hitman,” Geithner was hand-picked for his willingness to execute the instructions of a powerful elite – no matter what the consequences for ordinary citizens.

Consider Geithner’s career progression. Wikipedia gives us the key early dates:

After completing his studies, Geithner worked for Kissinger and Associates in Washington, D.C., for three years and then joined the International Affairs division of the U.S. Treasury Department in 1988. He went on to serve as an attaché at the US Embassy in Tokyo. 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)

Nobody in the press pays any attention to Geithner’s early years, but these were the years in which he became a made man in the service of the US Plutocracy. In 1985, when he joined Kissinger and Associates, Henry Kissinger’s reputation had been badly discredited by reports of his involvement in numerous ugly international plots of the Nixon administration, including the bombing and destabilization of Cambodia, the murder of Allende in Chile, and dirty dealings backing the Argentine dictatorship. Ask yourself what kind of well-informed Dartmouth graduate would join Kissinger Associates. The answer is an aspiring hitman.

Like Perkins, Geithner’s ambition knew no moral bounds, and he was determined to make himself useful to the wealthy and powerful. Having established his bona fides at Kissinger Associates, he rose rapidly in Government “service,” with the backing of Kissinger-connected godfathers and patrons, and always accumulating greater influence in preserving the wealth of the people who run the world. As president of the NY Fed, he was at the center of decisions that transferred huge amounts of taxpayer wealth into the hands of failing banks and financial firms. As Treasury Secretary, he continues to protect the strong against the weak and the wealthy against the poor. He has been a safe pair of hands for the Plutocracy, and for this loyal service he will be richly rewarded.

Tim Geithner was not made Treasury Secretary by President Obama. He was installed by America’s permanent government: the Plutocracy.

Geithner and Bybee: how legal corruption works

On Monday, the New York Times front-paged a long, detailed investigative article on Tim Geithner, the Treasury secretary who is looting the nation’s public funds to enrich Wall Street executives. Not surprisingly, the article points out that Tim has lots of pals on Wall Street. What is a surprise is that he was offered the job of head of Citigroup in 2007 while serving as President of the Federal Reserve Bank of NY. You got that right: one of the chief “regulators” of the banking industry was offered a highly lucrative position as the head of one of the banks he was regulating.

What the NYT article does not point out is that this is how the stealthy corruption of our public officials works. Geithner was not just offered a job, he was implicitly offered assurance that Wall Street would take care of him financially as long as he took care of Wall Street. If Geithner had been busting heads and cracking down on Citigroup’s policies, he never would have received such an offer, and the implication of the offer was that if he started to crack down he would never again receive a similar offer. Geithner’s willingness to play ball with Wall Street led to his installation as Treasury Secretary, and now we see the fruits of “deep capture” of that high office: a lavish give-away program that has Wall Street salaries soaring again while the nation remains mired in recession and record setting deficits are funneling taxpayer cash into “private sector” institutions.

Just a few days earlier, the Washington Post ran an article on Judge Bybee, the issuer of an infamous White House opinion “legalizing” torture. It seems Judge Bybee was promised an appointment to the Federal Circuit Court of Appeals, but first Gonzales wanted him to do a little bit of dirty work in the Office of Legal Counsel. Of course there was never an explicit deal, but the torture was approved, and the judgeship granted. Bybee knew that if he had antagonized the Bush administration by resisting their demands to make torture legal he could kiss his seat on the bench goodbye. So he did the dirty deeds.

The perfection of legalized corruption is the main reason why no change of elected officials will clean up the United States government. The practice of controlling politicians and political appointees with tacit quid pro quos is legally impregnable. Only far-reaching reforms requiring rigid separation of public and private sector careers can overcome this stealthy form of corruption, and it is the corrupted politicians who would have to pass these laws. A new form of government must arise to end the insidious and destructive practices of stealthy, legal corruption. Building this new governmental structure should be the political goal of the citizens of the world. My book-in-progress on the Netstate is one step towards that goal. The first chapter can be read here:


Who are the cancer men?

Everyone who ever watched the X-Files is familiar with the sinister figure of the “cancer man,” the chain-smoking head of the conspiracy to manipulate humanity for its own good (and that of its secret government).

The image of the cancer man is much in my mind these days as I ponder the question of how Geithner and Summers were appointed to determine Obama’s economic policies. After doing a bit of fruitless Google searching to answer this question, I realized that I already knew the answer. These men were put in place by people who wish to remain unknown, because their actions as the true controllers of the Executive Branch of the government of the United States are contrary to the beliefs of the American people and the founding principles of our nation.

When the cancer men selected Geithner and Summers they guaranteed that the interests of wealthy individuals and powerful financial corporations would be placed above the interests of ordinary taxpayers. Since the arithmetic of Democracy opposes such an outcome, they must operate in secret, and that is why there is no available anwer to the question of who proposed Geithner and Summers. What is even more interesting is that this question is not even raised in the press.

How do the cancer men conceal their role? They use the age-old devices of indirect action and influence that have corrupted politics for millenia. A key corruption mechanism is the “marker” system of exchanging favors. Ambitious and well-connected people keep a mental ledger book of favors done and received for and from powerful acquaintances. Dealing reliably with markers qualifies a player in this system for advancement to a powerful position. Geithner and Summers were appointed in exchange for loyal past service in protecting the interests of very wealthy and powerful people. They understand that people who accumulate these markers will be able to cash them in at the end of their public service for very comfortable living arrangements.

Similarly, the people who put Geithner and Summers on the (very) short list for Obama cabinet appointments were accumulating markers for future redemption. The beauty of the marker system is that there is no immediate quid-pro-quo to compromise the players. Temporal separation of corrupt action and subsequent reward sterilizes the transaction and frustrates investigation. Even if we could find every last phone log, email, and meeting transcript pertinent to the Geithner and Summers nominations, we would never find a direct inducement of bribery. All we would see is powerful people “suggesting,” through intermediaries, that these men would be “good choices” for Obama.

So I ask you all to ponder why nobody in the press knows who recommended Geithner and Summers for their jobs, and, more importantly, why nobody even cares about this question: Who are the people who control the Obama administration?

Who are the cancer men?

The Black Hole Of The Economy

Crossposted from Antemedius

A black hole gravitationally sucks in everything that comes near it, and nothing can return from the other side of the event horizon once sucked in.

Banks lending money is one of the major, if not THE major way they produce revenue and profit. In any business, when sales are down you do everything you can do to increase sales revenue – or you go bust – UNLESS you can produce revenue another way.

Yet the real message coming through is that the banks BANKERS seem to have decided that they do not want to increase revenue in any other way than simply taking it from taxpayers instead of lending to generate revenue.

This leads me to suspect that they have no intention of returning to providing the “product” they have always provided to generate revenue, but instead have decided to simply and openly steal it, and that the current economic crisis is not something the government is trying to correct but is instead actively a partner in intentionally manufacturing.

With government help. With Geithner’s help. With the presidents help.

We have a big problem. The problem is not the economic crisis.

What is “government”?

Very simply, it is an agency of coercion. Of course, there are other agencies of coercion — such as the Mafia. So to be more precise, government is the agency of coercion that has flags in front of its offices.

   –Harry Browne

Thomas Ferguson is an American political scientist and author who studies and writes on politics and economics, often within an historical perspective. He is a political science professor at the University of Massachusetts Boston. He obtained his Ph.D. from Princeton University. He is also a contributing editor for The Nation.

Today Ferguson talks with Real News CEO Paul Jay about the banking crisis and the black hole at the center of the crisis, the Obama administrations response so far to it, and about something he thinks really needs to be done that is not being done.

Real News – March 25, 2009 – 12 minutes 25 seconds

Obama should save the banks, not the bankers

Tom Ferguson: Stimulus package is dangerously small; plan for toxic assets shovels money to bankers