Diary

Geithner Should Be Forced To Resign

Let’s walk slowly through Geithner’s “career” so you can see why his forced resignation would be best for America.  So Geithner begins his career in the public sector

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).

Then he makes a high paying move into something that is not the public sector – more on the exact nature of Fed banks later

In October 2003 at age 42, he was named president of the Federal Reserve Bank of New York. His salary in 2007 was $398,200. Once at the New York Fed, he became Vice Chairman of the Federal Open Market Committee component. In 2006, he also became a member of the Washington-based financial advisory body, the Group of Thirty. In May 2007 he worked to reduce the capital required to run a bank. In November he rejected Sanford Weill’s offer to take over as Citigroup’s chief executive.

The Federal Reserve Bank of New York has a board of directors that votes on Geithner’s salary.  Three members of the board are politically appointed and have chair and deputy chair rolls.  The remaining six

Class A elected by member banks to represent member banks

Richard L. Carrión (bio) 2010
Chief Executive Officer and Chairman

Banco Popular de Puerto Rico
Charles V. Wait (bio) 2011
President, Chief Executive Officer and Chairman of the Board
The Adirondack Trust Company

Jamie Dimon (bio) 2009
Chairman of the Board and Chief Executive Officer
JPMorgan Chase

and three more nominated by banks

Class B elected by member banks to represent the public

Jeffrey R. Immelt (bio) 2011
Chairman and Chief Executive Officer

General Electric Company
Jeffrey B. Kindler (bio) 2009
Chairman and Chief Executive Officer
Pfizer

James S. Tisch (bio) 2010
President and Chief Executive Officer
Loews Corporation

Now how much leeway does the board have in setting salary?  Good question

Under current policies, appointment salaries for Federal Reserve Bank presidents are normally 85 percent of the salary-range midpoint (an 85 compa-ratio), with the exception of the New York Reserve Bank president, whose appointment salary normally is set at a 95 compa-ratio. The Board has discretion to approve a higher starting salary if requested by a Reserve Bank’s board of directors.

And was that request made?  Yes it was

In January 2009, the Board of Governors, at the request of the Federal Reserve Bank of New York’s board of directors, approved a special separation payment of $434,686 to Bank president Timothy Geithner.

And why shouldn’t they – apparently Timothy had done a good job keeping secret from the public the extent of the banks insolvency.  So now Geithner takes office as Secretary of Treasury and makes a lot of extremely dubious statement – I’m going to say lies:

From his confirmation hearing

Many people believe the program has allowed too much upside for financial institutions, while doing too little for small business owners, families who are struggling to keep their jobs and make ends meet, and innocent homeowners.

We have to fundamentally reform this program to ensure that there is enough credit available to support recovery. We will do this with tough conditions to protect the taxpayer and the necessary transparency to allow the American people to see how and where their money is being spent and the results those investments are delivering.

and then announcing his plan

Our plan will help restart the flow of credit, clean up and strengthen our banks, and provide critical aid for homeowners and for small businesses. As we do each of these things, we will impose new, higher standards for transparency and accountability.

and then about the solvency of banks

SEC. GEITHNER: None of those 19 banks are at risk for insolvency. Now, again, these banks, they bear the biggest responsibility for making sure that they can reassure investors that they’re going to be strong and viable in the future. We’ll indeed help them do that if that’s necessary, but they bear the responsibility for making sure they can convince their investors and their creditors that they can get through this with a strong, viable franchise, and I think they’re going to be able to do that.

There you have it – Geithner is a lying, bribe accepting sack of crap that should be forced to resign.