Tim Geithner Under the Microscope
Wall Street sure does like the thought of Tim Geithner running the Treasury Dept. next year. (The Dow surged 494 points Friday as the news leaked, and 397
Jul 31, 202053.7K Shares717.2K Views
Wall Street sure does like the thought of Tim Geithner running the Treasury Dept. next year. (The Dow surged 494 points Fridayas the news leaked, and 397 yesterdayas the appointment was officially announced.) But, like Sarah Palin before him, the relatively obscure Geithner — who’s headed New York’s Federal Reserve Bank for the past five years — was certain to get a closer examination after being named to a position of such tremendous public importance. Indeed, The New York Time’s Andrew Ross Sorkin has a revealing piecetoday that questions just how wizardly the 47-year-old is if he couldn’t foresee the financial mess coming:
“„Mr. Geithner also oversaw and regulated an entire industry whose decline has delivered a further blow to an already weakened American economy. Under his watch, some of the biggest institutions that were the responsibility of the New York Fed — Bear Stearns, Lehman Brothers, Merrill Lynch and most recently, Citigroup — faltered. While he was one of the first regulators to smartly articulate the potential for an impending disaster, a number of observers question whether he went far enough to stop the calamity.
Sorkin also questions how effective Geithner has been in helping Treasury Sec. Henry M. Paulson Jr. manage the administration’s bailout strategy. Some observers have fingered Geithner as a proponent of the controversial decision to let Lehman Bros. fail:
“„Perhaps what has most people on Wall Street stirring is Mr. Geithner’s role in the fall of Lehman. At the time of its bankruptcy, he, along with Mr. Paulson, appeared to be the most vocal in supporting the government’s refusal to bail out the firm, according to people involved in various meetings. With hindsight, many in the financial industry blame a deepening of the global financial crisis on the government’s decision to let Lehman crumble.
That, Sorkin suggests, has led the Obama folks to try to rewrite the history books on the Lehman deliberations in order to let Paulson absorb all the blame:
“„These include the suggestion that Mr. Geithner was not in league with Mr. Paulson over Lehman; that Mr. Geithner pressed to save the firm from bankruptcy; that he was a lone voice on the subject and was overruled by Mr. Paulson and Ben S. Bernanke, the Fed chairman, on this issue.
In the confidence game of high finance, maybe none of this matters, and the reaction of Wall Street investors alone is enough to justify Geithner’s promotion. Still, you’d like to know that the guy at the helm of the Treasury Dept. knows which direction to steer.
Rhyley Carney
Reviewer
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