Why Geithner Should Go

Joan Vennochi of the Boston Globe does not have a warm regard for Timothy Geithner as our Secretary of the Treasury. Basically, she feels that he pleads ignorance too often, e.g, with regard to his non-payment of taxes and his lack of knowledge re the AIG bonuses. On this latter point Vennochi in the following excerpt from her column demonstrates quite clearly that any sensible person would have doubts as to the veracity of the latter claim.

Reporting by The Wall Street Journal and The New York Times establishes the following chronology:

AIG cited the bonus retention plan in a public filing in early November. Geithner, then president of the Federal Reserve Bank of New York, was involved in major AIG matters until he recused himself around the time of his Nov. 24 nomination as Treasury secretary.

Some lawmakers raised the matter of AIG bonuses at a December hearing. Over the next weeks, AIG officials briefed lawmakers about the retention bonuses. On Feb. 28, Treasury Department staff were briefed on AIG matters, including the bonuses, by the New York Federal Reserve Bank.

On March 3, Geithner was asked directly about the bonuses at a House Ways and Means Committee hearing.

During that hearing, Representative Joseph Crowley, a Democrat from New York, asked what could be done to stop AIG from paying $160 million in bonuses.

Geithner responded by saying executive pay in the financial industry had gotten "out of whack" in recent years. He promised to do something about it when companies getting taxpayer bailouts were involved.

The bonuses were front-page news on March 15. Geithner eventually said he would take "full responsibility" but insisted he did not learn of the bonuses until March 10. A Treasury Department spokesman later said Geithner "was not aware of the timing or full extent of the contractual retention payments or other bonus programs until his staff brought them to his attention on March 10." It took until March 20 for Geithner to confirm that his department pushed Dodd to write the budget loophole into the economic stimulus plan.

The president has made it clear Geithner is his guy. What he has never made clear to the American public is why.

Obama stood behind Geithner when his then-nominee said he didn't pay his taxes because of some misunderstanding of the tax code. Now Obama is standing behind Geithner when he says he didn't know about the AIG bonuses because he didn't fully understand what his staff was negotiating.

The president is now asking American taxpayers to trust Geithner's plan to help buy up so-called toxic assets, as well as to expand the government's authority to take over troubled corporations like AIG. (my emphasis)

That's asking for a lot of trust. So far, on a personal level, Geithner has done little to show taxpayers he deserves it. But Obama continues to praise him, and even said in a "60 Minutes" interview that he would reject Geithner's resignation, if offered.

A market rally boosts Geithner's stock when it comes to pleasing Wall Street. But it shouldn't erase the honesty question for Main Street.

A Treasury secretary who trims the truth on any level is a liability. But Obama is sticking with his investment, out of loyalty, stubbornness, or both.

There has been plenty of time to figure out who knew what about the AIG bonus formula and when they knew it. If the full calculation doesn't get Obama angry, it should.