Posts tagged "Tim Geithner"

Fox News host Steve Doocy misrepresented President Obama’s proposal to avoid the possibility of a federal government default on its financial obligations in order to claim that the president has proposed changing the Constitution.

Treasury Secretary Tim Geithner proposed that Congress should pass a law giving the president authority to avoid default by raising the ceiling on how much the federal government can borrow. Under the proposal, the president’s authority would be subject to a vote of disapproval by Congress. Geithner’s proposal was based on an idea originally put forward by Senate Republican leader Mitch McConnell.

Geithner’s proposal is urgent because the federal government is expected to reach the debt ceiling early in 2013, meaning that if Congress does not act, the federal government will begin defaulting on some of its obligations for the first time in history.

On the December 7 edition of Fox News’ Fox & Friends, Doocy interviewed Republican Sen. John Thune (SD) and opined that it was “good news for the Republicans” that there would soon be a fight between Obama and congressional Republicans over the federal debt ceiling because Republicans would “obviously have the upper hand on that.” Thune responded in part by saying that “what we’re told is the president is even thinking about what he might be able to do to raise the debt ceiling without going through Congress, which would be a huge mistake and ought to be unconstitutional.”

Rather than amend the Constitution or change the way it has been interpreted, Obama has proposed legislation that would amend the current statute that puts a limit on the federal government’s borrowing.

The debt ceiling is merely a provision of law passed by Congress, which can be amended or repealed at any time through ordinary legislation without any change to the Constitution. 

H/T: MMFA

WASHINGTON (Reuters) - U.S. Treasury Secretary Timothy Geithner on Wednesday will face tough questions from lawmakers on whether he acted swiftly to address problems with the setting of the benchmark interest rate Libor when he was the head of the New York Federal Reserve.

Geithner has already publicly defended his actions twice in interviews and has said he not only made recommendations to U.K. authorities on how to enhance the credibility of the Libor rate but that he also alerted U.S. regulators to potential wrongdoing.

Barclays Plc has since admitted to giving false information as part of setting the interest rate in a settlement with U.S. and U.K. authorities and dozens of big banks such as JPMorgan Chase & Co are under investigation.

The House Financial Services Committee has asked the New York Fed for all communications going back to August 2007 with the banks that helped set Libor, or the London interbank offered rate.

The first trove of documents from the New York Fed showed that Barclays had flagged concerns as early as 2007 and that Geithner sent the email to Bank of England Governor Mervyn King in June 2008 with the Libor recommendations.

h/t: Yahoo! News

London—As lies go, none is greater than the one that suggests banks are capable of “self-regulation.”

Given authority over their own affairs, through fantasies such as “self-reporting,” CEOs, CFOs and COOs who travel in limousines, wear very expensive suits and give to all the right charities will do what comes naturally to them: lie.

Indeed, they will engage in practices so deceitful that, the governor of the Bank of England, Sir Mervyn King, says they “meet my definition of fraud.”

King’s level of bluntness with regard to the scandalous behavior of international bankers has yet to enter into the mainstream discourse of the United States, where most politicians (with notable exceptions such asformer New York Attorney General and Governor Eliot Spitzer and Congressman Dennis Kucinich) remain determined to do the bidding of their Wall Street paymasters—and where most media can’t be bothered to cover stories about the costs these cozy relationships impose of society.

But the conversation about crooked banks and lying CEOs is getting more interesting in Britain—so much more interesting that it is all but certain to have an impact on the United States. Why sort of impact? Hopefully, it will be a recognition that the so-called bank reforms of 2010 were, as former Senator Russ Feingold, Congresswoman Marcy Kaptur and others suggested, dramatically insufficient.

Teddy Roosevelt was right when he argued that strict regulation was needed to prevent the bad players of the private sector from creating monopolies so over-arching that they could destroy not just competition but—through their exercise of political and media power — democracy itself.

Roosevelt’s observations take on a new urgency with each news report from Britain, a country that has been shocked into something akin to consciousness by the revelation that some of the biggest banks in London (and the world) had—when given leeway to manage information critical to the functioning of financial markets—cheated. They filed false information to, in the words of London’s Independent newspaper “help mask losses and help improve their own financial positions.”

Obviously, this is not just a British problem.

The scandal has spread to the United States, with the revelation that key US players such as Treasury Secretary Timothy Geithner knew about the potential for massive wrongdoing by big banks. When he headed the New York Federal Reserve in 2008, Geithner alerted British authorities to the prospect that banks might be “deliberately misreporting” Libor submissions.

Unfortunately, Geithner’s warnings did not lead to action that might have averted the deliberate misreporting. 

Geithner now faces questions about what he knew and when he knew it, and about whether he followed up sufficiently on his 2008 warning. Inquiries about due diligence will become incredibly significant, as investors lost tens of billions of dollars as a result of the manipulations by the men who manage the false constructs that we refer to as “too big to fail” banks. (Despite the claims made about the banking reforms implemented in 2010 by Congressional Democrats and the White House, the “too big to fail” threat remains; which is why Feingold and other serious reformers opposed the legislation.)

Federal Reserve chairman Ben Bernanke on Tuesday admitted to Congress that the Libor system is “structurally flawed.” Inconveniently for Bernanke, he is giving his semi-annual report to Congress this week. He told the Senate Banking Committee Tuesday morning that the whole scandal has undermined confidence in the financial services industry.

In Britain, this will require a radical remake of the Libor system. In the United States, it can and should begin with the restoration of the Glass-Steagall Act and other regulations that were scrapped at the behest of the banksters and that now must be restored at the behest of the American people.

h/t: John Nichols at The Nation