Rewarding Failure At Treasury

by Josh Orton, Tue Mar 31, 2009 at 09:25:41 AM EDT

This is just obnoxious:

Tim Geithner's new nominee for number two at the Treasury Department, Neal Wolin, played a key role in drafting legislation in the late 1990s deregulating the banking system, a former Treasury Department official confirms to us.
The law that Wolin helped draft has been blamed by some critics, many of them Democrats, for easing up regulatory pressure on huge financial institutions, tangentially helping create today's mess -- and his role drafting it could come under questioning at his upcoming confirmation hearings.
...
Stuart Eizenstat, a deputy Treasury secretary under Bill Clinton, confirmed that as Treasury's general counsel at the time, Wolin "provided the technical and legal drafting" for the Gramm-Leach-Bliley Act.

The Gramm-Leach-Bliley Act repealed Glass-Steagall (among other things).

To be fair, as general counsel Wolin perhaps didn't have much say about whether the bill was good policy...maybe he was more focused on executing the decisions of others.

And yet there's something oddly insular about picking Wolin - perhaps it's tone-deafness, or maybe Treasury figures that too few people even realize the effects of deregulation (or that it happened).

The WH thinks Krugman's "naive," doesn't talk to him, and puts the deregulators in charge. Urg.

Tags: Tim Geithner (all tags)

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Elizabeth Warren unhappy with Treasury too

http://www.huffingtonpost.com/2009/03/31 /tarp-auditor-we-do-not-se_n_181229.html

Geithner is such an embarrassment to the party. Now we have Elizabeth Warren complaining that she is not getting enough cooperation from the Tresury to do her job to audit TARP related funds.

Obama has done many good things. But dont be a blind loyalist and tell me he has handled the Treasury well. The senior democrats like to sound pompous about social programs but they do not show the same passion in persuading Obama to hire better Treasury people. Maybe some of our senators are in the same boat?

Here is a test that must be administered whenever large amount of money is approved. When the government asked for 700B initially, they should have been asked to give us an best case, average case, and worst case scenario of what would happen in case our govt used those funds to bailout Wall Street. And then when they came back months later to ask for 700 B more, the congress and senate could have compared predictions to what actually happened. If there was no comparison, then the congress tells the Bush or Obama administration that they are full of shit because they just wasted a lot of money and to use different people who are more on target.

You just do not count on people who got us into this mess or did nothing to stem it. The arrogance is amazing.

by Pravin 2009-03-31 09:54AM | 0 recs

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Re: Elizabeth Warren unhappy with Treasury too

Why do people keep pretending that Geithner is somehow separate from Obama?

by bruh3 2009-03-31 09:56AM | 0 recs

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Re: Elizabeth Warren unhappy with Treasury too

Bashing Geithner is indirectly bashing OBama too. But in a blog frequented by casual readers, it is important that they know that the focus here is the Treasury, not Obama's job overall as a President. But i do not see how I let Obama off the hook. I have bashed him in diaries even before he became president for the bad job he was doing prepping for the crisis way back in December or so. I am very unhappy with his Treasury related appointments. It's not the ideology of these people I care about, but the insiderish courtesy they give the jokers on wall street. Keep in mind, all of these guys in the Treasury are smart people, including the Wall Street guys who bungled our money. What I can't stand is they were so arrogant that they thought they were kings and knew more about their understanding of finance and economics than they actually knew. All these smart Treasury people see their peers on Wall street as accomplished and have this sympathy for them that they deserve money. But one thing all these Wall Streeters and Treasury people fail to understand is , regardless of how smart one is, compensation should be based on tangible real achievements. All the money these execs created was shortlived. They still are in denial that they really haven't maastered the realm of economics. But they want to get paid like they have already mastered it when all they did was create the illusion that they did.

by Pravin 2009-03-31 10:13AM | 0 recs

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Re: Elizabeth Warren unhappy with Treasury too

Bashing? Entire Presidency? All of this seems like hyperbole. I asked why do people focus on Geithner rather than having the buck stop with the guy in charge- Obama. It is a little odd to read what seems like distain for Geithner as if Obama does not agree with what Geithner is doing. Clearly he does or else these things would not be occuring.

by bruh3 2009-03-31 10:26AM | 0 recs

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Re: Elizabeth Warren unhappy with Treasury too

"Obama has done many good things. But dont be a blind loyalist and tell me he has handled the Treasury well. "

What in this statement of mine even gave you that impression I wasn't assigning some of the blame to Obama. If Geithner is the main focus here, it is because this is his sole responsibility.

by Pravin 2009-03-31 10:43AM | 0 recs

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Re: Elizabeth Warren unhappy with Treasury too

I am only commenting on the disconnect of how people describe the situation. The rest is irrelevant since the only point I am making is the one I made. Nothing more than that.

by bruh3 2009-03-31 05:48PM | 0 recs

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Re: Rewarding Failure At Treasury

Obama himself said the buck stops with him and it's his responsibility. I suggest we start holding his feet to the fire. The current situation is unacceptable. I know where I will be April 11th, why don't you all join me.

http://www.anewwayforward.org/demonstrat ions/

by JasonMoreland 2009-03-31 10:14AM | 0 recs

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These stupid litmus tests--including

the "are you or have you ever been a LOBBYIST"--are crippling treasury right now.

Bottom line is that there are damn few people with the experience to deal with this crisis who don't have some stuff on their resume that allows for 'gotcha.'

by Geekesque 2009-03-31 11:29AM | 0 recs

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Re: Rewarding Failure At Treasury

while I agree with the general premise that failure can not be rewarded the I agree more with your commentary that writing a bill as he did and coming up with the policy are quite different

More importantly this reminds me somewhat of Roosevelts choice of Joe Kennedy as SEC chief, when you put the fox in charge of the hen house its much harder for the rest of the foxes to sneak through. Hopefully this is the case and its not like Geithners choice for a chief of staff who was a banking lobbiest

by New Frontier 2009-03-31 01:44PM | 0 recs

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Re: Rewarding Failure At Treasury

Excellent post, Josh. You're right.

by TomP 2009-04-01 10:57AM | 0 recs