I have no idea why Geithner agreed to this. Maybe he thought he would be able to clean up his image or maybe Rahm Emmanuel took him aside and told him unless he did the interview, an atomic wedgie was coming his way. In any case, the digg community pulled no punches in drafting a list of questions for the current US Treasury Secretary. Alan Murray of the Wall Street Journal tried his best to soften the caustic tone of the interrogation.
The result is disappointing but not surprising. For the most part, Geithner either totally avoids answering the question or he sets up a straw man argument. For example, rather than actually addressing the revolving door between the US government (especially the Treasury Department) and Goldman Sachs (GS) he reiterates how important it is that civil servants be impartial and capable. And when asked about the recent campaign to audit the Federal Reserve, he asserts that we need to keep politics out of monetary policy.
None of these answers are actual answers. He substitutes the real issue with his own fantasies and chooses to addresses questions which are not asked. If anything, he missed his true calling as a shrewd politician. He somehow even manages to completely avoid answering the questions regarding his repeated and flagrant inability to pay his taxes from 2001 to 2004.
You can watch the video (press play on the left hand, bottom corner):
His assertion regarding transparency from the Federal Reserve is the most blatant and outlandish lie in the whole interview. Unfortunately, Alan Murray is not up to the task. If he were, he would have followed this flimsy assertion by pointing out that just one day ago the Fed was taken to court by Bloomberg and a judge ordered them to release information on what they did with $2 trillion of US government money.
Left to their own devices, the Fed was perfectly happy to draw a lead curtain over this matter and prevent any information to be made public about how much money went to who and when. The amount is gargantuan - being enough to provide universal health care coverage for all US citizens. But the public, the media (with the exception of Bloomberg) and the US government have no qualms about a secretive and insular quasi-governmental agency, such as the Fed, making decisions on such amounts with zero hesitation, zero accountability, zero oversight and zero discussion.
As well, his claims that the US government cut good deals on TARP (and is making 16-20% returns) is again, just laughable. According to Elizabeth Warren, the accounting for the TARP funds is extremely complex because valuing the toxic assets is far from clear cut. As well, we can easily compare the deals that were negotiated with the government with those that were negotiated at the around the same time by private institutions such as Berkshire Hathaway (BRK.A) - such a comparison shows that the Treasury Department cut ’sweetheart’ deals with Wall Street firms that they would never have gotten from truly arms length transactions.
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