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Geithner: Getting it from all sides

Criticism of Treasury Secretary Timothy Geithner reached a new intensity after the release of a report by the TARP inspector general.

Conservatives and liberals rarely see eye to eye, said Andrew Leonard in Salon.com. But when it comes to Treasury Secretary Timothy Geithner, they completely agree: They want him out of here. With the economy sputtering, Geithner is used to taking political hits. But the criticism reached a new intensity last week after a TARP inspector general’s report concluded that Federal Reserve officials—including then–New York Fed president Geithner—woefully mishandled last fall’s $85 billion bailout of insurance giant American International Group. “The public has lost all confidence in your ability to do the job,” Republican Rep. Kevin Brady thundered at Geithner during a hearing, using the TARP finding to launch a broader attack. Later, Democratic Rep. Peter DeFazio urged President Obama to fire both Geithner and economic advisor Larry Summers. “We may have to sacrifice just two more jobs to get millions back,” DeFazio said.

That inspector general’s report did reveal Geithner’s true colors, said Linda Monk in HuffingtonPost.com. He could have forced AIG’s creditors, including Goldman Sachs and Merrill Lynch, to accept smaller TARP payments for all the bad bets they had made with the insurer. Instead, the banks “wound up getting paid full market value,” and top Goldman traders even landed major bonuses. The problem is that Geithner is “steeped in the Wall Street way of doing business, which itself is riddled with fraud.” He’s “a player, not a regulator,” and that makes him the wrong guy to be navigating this economic crisis. The treasury secretary is supposed to stand up for smart fiscal policy, said Kevin Hassett in Bloomberg.com. Instead, he “let Congress dictate a costly and ineffective stimulus plan,” and he allowed deficits to “soar to levels not seen since World War II.” He is not serving this president, or the nation, well.

You couldn’t be more wrong, said David Brooks in The New York Times. Geithner has angered the Left for resisting bank nationalization, while conservatives believe he has been too interventionist. But the evidence suggests “Geithner was mostly right and his critics mostly wrong.” The financial sector has rebounded. “TARP money is being repaid, and the debate now is what to do with the billions that were never needed.” His flexible path was “a middling one, but it helped the country muddle toward recovery.” As for all those critics looking for his scalp, said Daniel Indiviglio in TheAtlantic.com, it may be a long wait. For Obama to sack Geithner now would be an acknowledgement of his own missteps. “Geithner isn’t going anywhere.”

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