Today will be a day of quick hits. Call it an experiment in expanding on the "Reportings" news and opinion roundup I used to do every morning.
First up, Simon Johnson's not-so-subtle assault on Treasury Secretary Timothy Geithner, at the New York Times Economix blog. Background: In Ron Suskind's recent book about the early days of the Obama administration's response to the financial crisis, "Confidence Men," Geithner is cast as the official who wanted to prevent the breakup of the big banks, advocating for stability in the crisis.
Despite a lack of any supporting evidence, Mr. Geithner sees megabanks as essential to the functioning of the economy — and he gambled on bailing them out as a way to restart the economy.
So it would have been entirely logical for him to fear disclosures that would damage their business models and legal viability.
Whenever someone or a group of people is above the law, equality before the law is ended. This is how the megabanks, and the way they are treated, threaten to undermine democracy.
Not exactly subtle, wouldn't you say? But Johnson is just getting warmed up:
President Obama’s campaigns have taken a great deal of money from Wall Street and, as Mr. Suskind’s book vividly illustrates, have proved consistently reluctant to take on this powerful vested interest. This is why Mr. Geithner is still Treasury secretary.
Suskind's book has been attacked all over the place — including from the Oval Office — so it's interesting to see Johnson zeroing in on the key aspect of it in spite of the negative reviews. Frankly, I think he's on to something. When I read the book, I too zeroed in on the parts where Geithner seemingly ignored or stalled on what was briefly an urge at the White House to break up at least some of the big banks.
Johnson wraps it up with a bang:
Too-big-to-fail banks benefit from an unfair, nontransparent and dangerous subsidy scheme. This isn’t a market mechanism; it’s a government-backed distortion of historic proportions. And it should be eliminated.
It will be interesting to see if this somehow becomes an issue in the coming presidential campaign. I, for one, am not holding my breath.
Anyway, you can watch Suskind below, on "Morning Joe," recount the debate the led to Geithner being told to break up Citibank — and then, basically, not doing it.