Geithner’s Duplicitous Efforts to Reinforce the Oligarchy

Bloomberg’s blockbuster story–showing that the Fed was dumping $7.77 trillion into the same banks that Treasury was claiming were solvent to qualify them for TARP–shows a number of different things. It focuses on the $13 billion in profits the banks made off of massive secret loans from the Fed.

The 190 firms for which data were available would have produced income of $13 billion, assuming all of the bailout funds were invested at the margins reported, the data show.

More importantly, IMO, the Bloomberg piece also shows how Ben Bernanke, TurboTax Timmeh Geithner, and Hank Paulson used secrecy to get DC’s bureaucracy–both Congress and Executive Branch officials–to push through his preferred plan to prop up the TBTF banks.

They did this in two ways: first, by keeping details of the Fed’s massive lending secret from the people implementing TARP.

The Fed initially released lending data in aggregate form only. Information on which banks borrowed, when, how much and at what interest rate was kept from public view.

The secrecy extended even to members of President George W. Bush’s administration who managed TARP. Top aides to Paulson weren’t privy to Fed lending details during the creation of the program that provided crisis funding to more than 700 banks, say two former senior Treasury officials who requested anonymity because they weren’t authorized to speak.

This meant the Fed could hide the fact that the six biggest banks were basically insolvent, and should have been wound down rather than propped up with a strings-free TARP.

The Treasury Department relied on the recommendations of the Fed to decide which banks were healthy enough to get TARP money and how much, the former officials say. Read more

Anyone Wondering Whether Gregg Just Didn’t Want Scrutiny of His Office’s Favors for Abramoff?

Darn. We’ll have one less Republican in Obama’s cabinet, at least until Obama nominates Mitt Romney or Newt Gingrich to the post. I’m heartbroken.

But, really, does anyone actually believe this claptrap?

However, it has become apparent during this process that this will not work for me as I have found that on issues such as the stimulus package and the Census there are irresolvable conflicts for me. Prior to accepting this post, we had discussed these and other potential differences, but unfortunately we did not adequately focus on these concerns. We are functioning from a different set of views on many critical items of policy.

Shorter Gregg: "I just completely stopped listening after the moment Obama said, ‘interested in a cabinet spot?’ and missed all his discussion of retaining the census in Democratic hands." 

Yeah, I don’t find that too plausible either.

I wonder whether Gregg simply got to the point in the vetting process where he realized that he didn’t want his life to be investigated in detail by his colleagues and the press? I mean, it was just hours after Gregg was nominated that it became clear that Gregg’s Legislative Director from 2002 to 2004, Kevin Koonce, had been trading sports and music tickets and booze for legislative favors. As the latest details on the Abramoff make clear, Abramoff and his cronies were asking for $3.5 million earmarks and the defeat of a defense appropriations bill that would have hurt Abramoff’s Native American gaming clients. Koonce’s language, "[Gregg’s office] had the proposed amendment ‘flagged,’" "I got something for you too," "Let me know if I can return the favor," and Abramoff’s language (describing a request from a potential Abramoff client), "Koonce practically lives in our various suites. We are shady," suggest Abramoff’s $10,000 investment in sports tickets did not go to waste. Koonce was delivering on Abramoff’s requests. 

Which sort of means–whether or not Gregg is a subject or a target of the investigation at the moment–his office was trading legislative favors for gifts. And those trades, whether they were made with or without Gregg’s knowledge, certainly don’t say much for Gregg’s ability to shepherd the nation’s commercial interests.

Sure, Gregg tells a nice story about how his lifetime dream was to run a census. But I suspect he’s just hoping to get out of the Senate in 2010 with his honor and his clear criminal record intact.