Monday, April 27, 2009

NYT Bombshell: Banking Guy Had Lots of Breakfasts, Lunches With Other Banking Guys.

Did we miss something?

After plowing through today's 5,231-word takeout on Treasury Secretary Tim Geithner, all we could conclude was what already seemed obvious: The former head of the New York Fed spent a lot of time conferring with the heads of banks overseen by the New York Fed.

The NYT labels these relationships "unusually close," but the only evidence of that is that they often took place at the Four Seasons restaurant, or in the executives' homes or board rooms. Frankly, it would have seemed far more "unusual" to us if those meetings had taken place on a bench near the Central Park boat pond. As we understand it, businessmen typically prefer to sit at desks and tables when they meet, so they can jot down numbers and such.

How is it "unusual" for a Fed chairman to spend time with bankers? If the NYT had obtained the schedule of the President of the Fed in St. Louis, wouldn't it have found a similar calendar of lunches and meetings with local banking officials? That's just what Fed Presidents do. Would the NYT find it unusual to to discover that Major League Baseball commissioner Bud Selig goes to lots of baseball games, and often sits in the owners' box?

The NYT goes on to suggest that these relationships influenced Fed policy, and have continued to shape his views as Treasury Secretary. "His actions, as a regulator and later a bailout king, often aligned with the industry’s interests and desires, according to interviews with financiers, regulators and analysts and a review of Federal Reserve records."

Again, wouldn't it have been more shocking if Geithner's views diverged from his colleagues, friends and mentors in the banking world? Geithner belongs to the banking establishment. That's not news.

We won't deny our own doubts about Geithner's approach to bailout policy, putting taxpayers on the hook for the massive debts that resulted from unsound decisions made by the banking industry in recent years -- decisions that helped catapult the nation into an economic crisis that will cost hundreds of billions of taxpayer dollars to repair.

This comes as no surprise to anyone who has been following the events of the last several months. Geithner has never been shy about his views on a government bailout, which is precisely the reason his term has already been so controversial. So for the NYT to devote so much space to reporting on Geithner -- and turn up only evidence to prove what we already knew about him, or could have guessed -- is frustrating to those of us who might want him gone.

The theme of the NYT's epic analysis of Geithner's schedule, by reporters Jo Becker and Gretchen Morgenson, seemed to be that the former Fed chief's close relationships might have unduly influenced his decision-making. But nowhere in the piece did the NYT break new ground in reporting any decisions Geithner made that were inconsistent with his publicly-stated views on monetary policy.

It's no news to anyone who reads the paper that Geithner has close ties with Wall Street. His mentor, Bob Rubin, was Bill Clinton's Treasury Secretary and now works at Citigroup. Other pals include the head of JPMorgan Chase, Jamie Dimon, and Goldman Sachs CEO Lloyd Blankfein.

The big NYT "scoop" appears to be a copy of Geithner's calendar for the last two years before arriving in Washington. The NYT crows that it was obtained through the Freedom Of Information Act.

But we spent several minutes flipping through the calendar's pages and saw nothing to suggest he'd spent all his time cozying up to the private sector in corporate boardrooms. We noticed a number of meetings with business journalists in there, too -- Greg Ip of The Wall Street Journal, Jesse Eisinger of Portfolio and John Cassidy of The New Yorker, and various reporters at the NYT, including Roger Lowenstein and Edmund Andrews.

Also, a basketball game at the Fed's 14th floor gym, a business trip to Zurich (why did he leave for the airport from 27 N. Moore St.?) and "Ben's recital." Could that be a recital by Fed chairman Ben Bernanke? We didn't know he played an instrument!

We want the NYT to stay on the Geithner story, and to keep looking for real evidence to suggest a corrupt relationship between him and the banking industry he has worked so hard to protect. But so far it hasn't found anything worth devoting 5,231 words of increasingly valuable real estate in its pages.


John said...

I guess we need to make Gretchen the Treas Sec. She's the only one who passes her ethics test.

Brooklyn Bridget said...

They might as well fill the space with 5,231 words' worth of nothing—it's not like there are any ads to put there.

Anonymous said...

And you could point out that ProPublica and The Washington Post also got Geithner's calendars. They published a front page story about them, and Geithner's tenure at the New York Fed, more than three weeks earlier...