We were shocked to read last night that Treasury Secretary Tim Geithner had delivered an expletive-filled tirade to a team of financial regulators.
From the Fed chairman to whom Geithner’s plan would assign more power, to the FDIC chairman the proposal conspicuously ignores, all the major financial regulators have had constructive criticism.
It was last Friday that Geithner blasted his fellow regulators. While we don’t imagine the performance impressed Sheila Bair or Ben Bernanke, it went over even worse with pundits, who universally rated the performance “junk” and put Geithner’s career outlook on credibility watch.
Most blamed Larry Summers for orchestrating the thing; one suggested the president hold a press conference and wash both mens’ mouths out with soap. We pulled some of our favourite reviews:
Economist‘s Free Exchange blog:
Still, if ranking legislators of both parties are sceptical about the plan to further empower the Fed, I’m not sure what is accomplished by yelling at regulators, except for: a) catharsis on Mr Geithner’s part, and b) optics.
Dealbreaker’s Greg Michaels:
Drawing on his ongoing home selling frustrations, TG told those lucky enough to be in attendance last Friday that “enough is enough” and now is not the time to think through comprehensive financial regulatory overhaul. Apparently at this critical moment what is really needed is unwarranted blind faith in the administration.
Zerohedge’s “Tyler Durden”
On a more serious note, this begs the question: is the SecTsy finally losing it and why? Or, in a Machiavellian ploy of sinister brilliance, did Larry Summers orchestrate all of this by turning off CNBC access at the U.S. Treasury, in hopes of creating a brief but deadly Western standoff between his adversaries (all of them)?
Naked Capitalism’s Yves Smith:
Obama seems unable to recognise he has pinned the fate of his presidency on two people, Geithner and Summers, who are part of the problem. The stillborn PPIP was a terrible idea. Paulson had two efforts on variants of the “buy toxic assets” idea and failed. The stress tests were a farce. The Potemkin reform plan puts more regulatory authority in the Fed, which was far and away, of all the regulators, least interested in supervision. The only thing that the Treasury and Fed have succeeded in doing is cheerleading to get stock prices up so that banks could raise equity at not-hugely-dilutive prices.
And over at New York, Jessica Pressler suggests Obama hold a press conference making Geithner repeat all the bad words in public
Afterward, Obama will present Geithner with a bar of soap and tell him he has to hold it in his mouth until he reveals who taught him the bad words. Geithner will hold it, eyes tearing, for like five minutes before fingering Larry Summers. Then they’ll get sent to a nice hideaway in the mountains to do sharing exercises and we’ll get a whole new economic team, with maybe Paul Krugman and that nice Joe Stiglitz.
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