Tim & his pals

The unsurprising news that Treasury Secretary Geithner used the TARP bailout to totally give away the store to his buddy-boys at Goldman Sachs and the other professional looters shines an unflattering light on his boss. Geithner is hopeless, but somebody put him where he is despite his underwhelming record at the New York Federal Reserve and his memory lapse involving a tiny little matter called income taxes.

This complicity with Wall Street’s worst behavior fuels the teabaggers and those who might be swayed by them. The tinfoil hats and gun-toters often live somewhere very light on oxygen, but in this case their instincts are quite correct: the big thugs running things are in cahoots and ripping us off shamelessly.

It is an irony of the current situation that populist resentment of these creeps is being held partially at bay by Barack Obama’s credibility. What a pity that he chooses to spend it on the rich and their enablers.

Without pretending to understand high finance, I think it is pretty obvious that the government aid to AIG and the other pillars of the collapsing bank infrastructure could have been packaged in a completely different way and could have included some serious damage to the wallets of our master engineers of disaster. Instead, thanks to Geithner’s non-negotiations, AIG’s counterparty clients walked away with their full dollar and apparently paid nothing.

All this as documented by a Goldman Sachs alum, no less.

The report’s money graf on Geithner’s terminal wishy-washiness is pretty devastating:

[T]he refusal of FRBNY and the Federal Reserve to use their considerable leverage as the primary regulators for several of the counterparties, including the emphasis that their participation in the negotiations was purely "voluntary," made the possibility of obtaining concessions from those counterparties extremely remote. While there can be no doubt that a regulator’s inherent leverage over a regulated entity must be used appropriately...in other instances in this financial crisis regulators (including the Federal Reserve) have used coercive language to convince financial regulators to take or forego certain actions.

Surprise, surprise! Guys whose lives revolve around accumulating wealth decided not to part with any. Gee whiz.

This is the same Geithner who gives every impression of being at the beck and call of the Wall Street moneybaggers.

Given the lack of shyness in the Obama White House to push things they do care about (I’m thinking of Rahm Emanuel here), we can only conclude that keeping the big bankers delighted was and is a top priority. Says a lot about the limits of liberalism and the ease with which the elite awaken the populist beast in all its many colors.