Please, President Obama, fire Timothy Geithner today and hire a treasury secretary to fight for the U.S. economy as hard as Geithner fights to protect bankers’ profits.
I know you’re intensely loyal to Geithner and have resisted such calls in the past.
But Mr. President, times and circumstances have changed. For your own good and especially for the good of the country, you should reconsider. You’re in an especially close election and you need to cut yourself loose from the failed policies you’ve pursued for the past four years that have coddled the financial sector at the expense of the rest of the economy.
Your loyalties are with Geithner but his, Mr. President, are with the too big to fail banks, not with the public.
The most recent evidence comes from this Huffington Reports piece which details how Geithner, while president of the New York Fed responded when he heard about the big banks manipulating a key interest rate known as LIBOR when he was chair of the New York Federal Reserve in 2007.
Recently disclosed emails show that while Geithner expressed concerns over the integrity of the LIBOR, or London Interbank Offered Rate, he did little to investigate or stop the manipulation.
What he did to was cut and paste the bankers’ own proposals into his own proposal to the Bank of England about how to address the LIBOR concerns. It should have been an early warning sign of how Geithner and his big bank cronies spoke with one voice – theirs.
The public may not understand just how critical the integrity of LIBOR is, but you do, Mr. President. You know that it’s how it’s used as a benchmark for trillions worth of transactions every day, on everything from complex credit default swaps to credit cards.
You also shouldn’t underestimate the public’s ability to grasp what’s at the root of this LIBOR scandal, which is the same theme that’s underlying JP Morgan London Whale trading losses – that bankers have been manipulating the financial system for their own interests, with your administration either fully cooperating or looking the other way.
Don’t underestimate the ability of the ruthless and hypocritical Republican attack machine to clobber you with those policies even as the Republicans embrace more banker-friendly policies than you are.
They’ll get a good shot this week when Geithner testifies before the House Banking Committee over what he knew and what he did about banks.
The public may not be focused on the LIBOR in the middle of a hot summer, Mr. President, But the scandal is just beginning to wash up on the our shores after causing tremendous damage after it erupted in England, after Barclays Bank acknowledged its own LIBOR manipulation and cut a deal with regulators. Meanwhile the investigation into 16 U.S. banks and their LIBOR shenanigans is just getting cooking. It could be heating up at the same time as the presidential race.
Mr. President, you have another opportunity to do something that is good politics and good for the country too, and will distinguish your policy on the banks from your opponent’s do-nothing approach.
Get rid of Geithner and begin to chart a new course toward a system not rigged in favor of big bankers and their fat bonuses. We need a treasury secretary who doesn’t measure prosperity solely by the size of bankers’ wealth.