October 19, 2011

But we still won't break up Citigroup

A $285 million fine for fraud claims? Chump change. Every real progressive knows that because of its bloat, its financial ill-health, and its scheming, even though Citi and its predecessors have been bailed out at least once a decade, it's time to change that now.

And, every real progressive knows we won't. Treasury Secretary Tim Geitner, who ultimately does President Obama's bidding, has refused in every way possible to do this.

Again, that's why the one-third or more of Occupy Wall Street who think Obama is the answer are idiots.

More seriously, I'm reading Ron Suskind's "Confidence Men" right now. We had a great chance to either nationalize or break up Citigroup just before Timmy G. announced his vaunted "stress tests," and he did exactly as I noted ... he ignored  Christina Romer and others, who seemed to have at least a partial ear of Obama's on this issue, and refused to countenance doing anything to the bloated bank.

Joe Nocera's review of "Confidence Men" provides more details on this incident.
The most explosive allegation in “Confidence Men” concerns one such instance, early in the Obama presidency, when several top White House advisers, including Summers, wanted to “wind down” and restructure Citigroup, the most troubled of the too-big-to-fail banks. Obama liked the idea; it would show, he thought, that the government was willing to tackle the predicament of the banks and their toxic assets head on, and would set the proper tone for the way his administration planned to treat the banks. But Geithner, Suskind writes, strongly opposed the idea, so he just waited for the moment to pass — and for the president to forget about it. Suskind flatly labels Geithner’s action a “fireable offense.” 
But, he wasn't fired. As far as we know, he wasn't even given that severe of a dressing down. Or any. And, in Suskind's level of detail, if Geithner had been called on the rug, we'd know about it.

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