WaPo Hit Piece on Geithner

The long knives are still out for Timothy Giethner, Treasury Secretary.

WaPo is out with a hit piece today intimating. without really stating, that, while at the New York Fed, Geithner was too close to those he was supposed to be regulating. Here's WaPo:

Geithner, who maintained ties to senior bank executives and others in the financial world, had a particularly close relationship with former Treasury secretary Robert E. Rubin, a mentor then serving as a senior executive at Citigroup. In 2007 and 2008, Geithner held discussions with Citigroup officials dozens of times, more than with any other firm, according to interviews and documents, including Geithner's daily calendar...

A protege of former secretary of state Henry Kissinger at his consulting firm, he joined the Treasury and rose through the ranks with support from two Clinton-era secretaries, Rubin and Lawrence H. Summers. Geithner eventually served as undersecretary for international affairs, where he oversaw the department's response to the Asian financial crisis in the late 1990s...

...among hundreds of people listed in Geithner's 2007 and 2008 appointment calendars, which were made available by the New York Fed. Geithner's outside
contacts include senior banking managers, Treasury officials, regulators from other nations and journalists. The appointments range from breakfasts and lunches with bankers to tennis with Alan Greenspan and "Dinner w/Dr. and Mrs. Kissinger, et. al."

No institution shows up as frequently as Citigroup, the biggest bank company under the New York Fed's supervision. Among the numerous senior Citigroup officials recorded were Geithner's mentor Rubin, chief executive Charles Prince and his successor, Vikram Pandit...

Before his confirmation hearing Geithner paid courtesy calls in the Senate. He mostly got a warm reception. When he went to see Sen. Ron Wyden, the Oregon Democrat quizzed him about his supervision of Citigroup.

"I quoted to him from the U.S. code," Wyden said, "about the clear responsibilities of the New York Fed." Wyden wanted to know why the "alarm bells" about Citigroup hadn't prompted the Fed to "enforce existing laws."

A few days later Geithner appeared before the Senate Finance Committee. Wyden once again asked why Geithner missed the boat with Citigroup.

Geithner acknowledged that "supervision could have been more effective." Before he could continue, Wyden pressed him: "Should your supervision have been more effective?"

"Absolutely," Geithner said.

Bottom line, Geithner doesn't mess with the big boys. He has lunch with them.

This is no surprise. The bad guys are always circulating the regulators. Most who read the WaPo article will reach the conclusion that Geithner should be replaced, and while Geithner is a front man for the insiders, the ultimate problem is not Geithner,it is the existence of the regulatory agencies themselves. Eliminate the government agencies and the insiders won't have the core power source too circle. Let the markets regulate themselves. I'll take a free market created financial "Good Housekeeping" seal of approval over the current nonsense any day.