By Brent Budowsky - 12/01/09 12:34 AM EST
To appreciate the economic fiasco and moral obscenity taking place during the tenure of Treasury Secretary Timothy Geithner, consider this:
The Washington Examiner weekend edition bannered this headline: “Credit cards show no pity.” This is a story about how bailed-out bankers who receive huge bonuses are crushing small business, consumers and jobless workers with ruthless interest-rate increases and abusive fees.
The Monday Wall Street Journal reported how these banking and Wall Street players are returning to conspicuous consumption, buying $200,000 platinum watches and taking $15,000 Caribbean getaways while they foreclose on homeowners and give speeches about moral hazard.
Congress debates healthcare while insurers, with major ownership from Wall Street, relentlessly raise premiums on hard-hit Americans during a jobless recovery.
The real jobless rate soars to 17.5 percent. Homelessness rises and spreads. Hunger reaches epidemic levels. Yet Treasury Secretary Geithner has been an advocate, supporter, enabler, apologist or bystander for the practices and policies that caused the crisis and continue today.
Geithner must go. He has long believed in the go-go economic theology of the 1980s and 1990s that led to the ruinous speculation, extreme compensation and taxpayer-subsidized risk-taking that inflict such extreme damage on taxpayers, consumers, small businesses and workers.
Geithner may have been the most disastrous president of the New York Fed in history. He tolerated or championed virtually every excess, every failure, every abuse and every wrong that took our economy down a disastrous course during his catastrophic watch.
Geithner was at the epicenter of the Bush administration bailout-without-conditions that has been inherited, courtesy of Geithner, by President Barack Obama (over my objection and the objection of many Democrats).
Geithner shamefully fought for giving 100 cents on the dollar to counter-parties to AIG, including American firms such as Goldman Sachs and foreign firms such as UBS. This outrage forced taxpayers to pay for a double bailout of certain American firms granting humongous bonuses today, and certain foreign firms bailed out by American taxpayers, including one under major investigation for tax evasion, allegedly helping wealthy American clients move money offshore to illegally evade American taxes.
Geithner has continued the Bush bailout policies almost completely. The inevitable result: continuation of speculative extremes, mammoth compensation on Wall Street, abusive treatment of customers by banks, 17.5 percent joblessness and the devastating failure of trickle-down economics long practiced by Republicans and by Geithner.
Geithner should have been the champion of consumers and small businesses that create the jobs when banks that took huge bailouts refuse to lend, and far too often abused them, but he was not.
Geithner could have fought for a foreclosure freeze, as I proposed in 2007, but did not. Instead he offered banker-friendly halfway measures that were doomed to fail, and did. Geithner should have fought for bankruptcy reforms, but did not. Instead, he supported the banks, while bank abuses outrage even judges. Geithner could have fought for ending abuses against credit card customers, but did not. Abuses are worse now than when he became secretary. Geithner could have pushed for dramatic Wall Street reforms when his leverage was immense, but did not. He now proposes weaker reforms undermined by bank lobbyists.
For these reasons and more, Geithner should be replaced.
Budowsky was an aide to former Sen. Lloyd Bentsen and Bill Alexander, then chief deputy majority whip of the House. He holds an LL.M. degree in international financial law from the London School of Economics. He can be read on The Hill’s Pundits Blog and reached at email@example.com.