I’m not sure when it is in anyone’s experience with Geithner that they realize that he is simply the most loathsome maggot. I suspect its when they sense that he doesn’t look at a questioner straight on. Add to that foreknowledge of his tax escapades and the impression is almost certainly clinched.

Now that it’s beginning to seem clear that there will be a second downleg to this crisis, one accompanied by increasing unemployment, bankrupcies, credit card defaults, foreclosures and one commercial real estate horror show or bank failure after another, look for public discontent eventually to blossom into large scale protest demonstrations and strikes. Its then that a frog like Geithner will need to concern himself with alibies rather than sophistry.

Let me see if I have this correct:

1. Geithner was head of the New York Fed.
2. The Fed Act of 1913 was set up to ensure the
financial stability of banks.
3. The Fed Board of Governors has twelve members;
five are Fed regional bank presidents. Local banks
which are members of their regional Fed bank, own
stock in the Fed regional bank, and receive a 6%
annual dividend.
4 “…Fed decisions do not have to be ratified by
the President or anyone else in the executive
or legislative branch of government..”
5. The Fed has unlimited funds to support the
financial stability of banks.
6. The Fed failed to identify, never mind prevent, the
greatest financial crisis since the great
depression. In fact, it was Fed policy to “turn a
blind eye” to developing excesses, preferring
instead to cleanup after a financial system crash.
7. The Fed woke up one morning and realized the
financial system was about to collapse.

Was the Fed worried? Sure they were anxious, and
some had sleepless nights; but its not like the Fed
was going to lose their job or a bed to sleep in.

The Fed has a blank check, and after all its just
money – taxpayer money .Besides,the crisis allows
the Fed to demonstrate its considerable technical
skills in financial markets, and who knows you may
even be hailed as a “savior”.

So what is a Fed guy to do in this situation?. You
spend the taxpayer money , and try to put the sorry
episode behind you as quickly as possible. Besides,
congress gave you the power , and all of your
colleagues – Paulson,Bernanke,Geithner,bank presidents
,European Central Bankers, are telling you this is
the best course of action.

It is like Geithner says -you do what you gotta do.
Next crisis around, you will do whats right. Did you
notice that we never seem to get around to doing
whats right- just whats expedient.

I agree. The anger from Main Street over bailouts provided the fuel for the healthcare plan (which had its own problems) backlash.

Broder was writing about how “tragic” it is that Atty. General Holder is now looking into prosecuting the CIA operatives who committed torture. Broder said that, for the investigations to be effective, you have to take them all the way to the top, but what good would it do the nation to see Mr. Cheney in the dock?

A commentor answered that this was just another symptom of the political entitlement felt in certain socio-economic sectors since Nixon resigned. As the commentor put it, once Nixon got away with it (what with being pardoned and all), lots of folks began to believe they could do what he did, and worse, and get away with it.

How does this apply here? Simple really – there is STILL no moral hazard for banks to take huge short-term profits at the overall expense of the long-term economic health of the U.S. (and the world). By bailing the banks and other financial institutions out with few preconditions, Treasury and the Fed sent a clear signal that they were willing to underwrite private risk taking with public dollars, thus obviating the moral hazard. While Treasury may now want to build more moral hazard in to the regulatory system, the consolidated, financially stronger banks won’t allow it. Just like Republicans post-Nixon, the banks post-Paulson believe they got away with something, and so feel free to do that something, and worse somethings, again in the future.

Tell that to the over 13% of people in foreclosure (on prime mortgages now). Tell that to the 16.8% of people who are unemployed or underemployed. Etc.

It has not been “saved” because Tim Geithner says it has.

When you look at the world through the lens of Big Finance like Geithner does, even if you are critical of it as on this blog, you have a very distorted view of reality.

Please stop perpetuating the idea that the Real Economy = Big Finance.

Or maybe the hoi polloi — the little people — really don’t count.

And even if we have a short-term comeback based mostly on government stimulus, what guarantees exist that any growth we might see is sustainable? The answer? Nothing guarantees it.

Some people have called what we are about to see the “recoveryless” recovery. That’s about right.