Ron Suskind, Obama, Tim Geithner, Citigroup, and the Wall Street Occupation

Ron Suskind’s new book describes how Obama wanted to follow the Scandinavian approach to financial crashes by shutting down the banks, wiping out shareholders, and bringing in new management.  He charged Geithner with figuring out how to shut down Citigroup.  Geithner preferred to ignore his boss’s wishes.  An earlier book, throws further light on the relationship between Geithner and Citigroup, in which Geithner was offered the job of running Citigroup.

 

Sorkin, Andrew Ross. 2009. Too Big to Fail: Inside the Battle to Save Wall Street (Allen Lane Penguin Books, London).

61: According to his account of the Lehman crisis, Geithner had been quietly approached in November 2007 by Weill and asked if he would be interested in becoming boss of Citi, a move that could garner him untold millions.  Geithner was certainly interested, pondering the matter while on long walks round Larchmont with his dog, Adobe, but a firm offer never materialized.   At that time the credit crisis was really starting to bite, and the giant bank had just reported a record loss.  “Weill had no executive function at Citi.  He wouldn’t be the one making that call if they were seriously interested in giving Geithner the job” points out one banking analyst in commenting on the story.  “How else can we interpret this but as a nice juicy carrot being dangled in front of the President of the New York Fed by a bank that was going to need Fed help in a big way.”

2 comments so far

  1. Third-Party Supporter Sick of the Two-Party Dictatorship on

    I’m probably woefully uninformed, but sincere and willing to be enlightened by more informed minds and willing to ask questions, such as revisiting the lessons from the 1990s Scandinavian approach to its banking crisis.

    I’ll have to investigate and self-educate further. But I’m still suspicious of Obama’s apparent allegiances to Wall Street. I never trusted Obama, nor voted for him. I campaigned for and voted for Nader in 2008 (and 2000 and 1996).

    Obama put in place many of the same Clinton Democrats whom Enriched Wall Street While Mugging Main Street (with The Great American Stick-Up in mind).

    It seems too convenient an excuse to say Geithner simply ignored Obama. Even incompetence on the part of Obama seems implausible. Again, I’d have to read further to fact-check for myself, but this seems a clever ruse of Obama apologism to say Obama meant well, but had a bad apple in his cabinet.

  2. Judy Whitehead on

    I am also suspicious of the timing of Suskind’s book. He suggests that Obama was ahead of everyone on the sub-prime fiasco, but was ;slow-walked’ by Geithner just after coming to power. This seems a way of making the President appear to be well-intentioned, ‘on the side of the people’, but waylaid by Wall Street-based advisors. Yet Obama picked his team, and he has held onto Geithner for nearly 3 years. His slogan of ‘change we can believe in’ has turned out to mean only that the bankers have been supported. I would not begin to trust him unless and until he gets a better economic team, and yes, that would mean firing Tim. After all, if he had subverted a presidential order, that should surely be grounds for dismissal.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: