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February 10, 2010

Calling on Tim Geithner to Resign


Tim Geithner has been Treasury Secretary for 13 months and the list of mistakes he’s made exemplifies his lack of ability to perform his job.

1) Tax Cheat

Before he was even in the door, Tim Geithner was in trouble. While working for the IMF, he didn’t pay Social Security or Medicare taxes. In addition to this, he employed people that did not have proper work documentation. Had this been a Republican nomination, he would have been tarred and feathered on the evening news. Geithner agreed to pay the taxes, but not the penalties associated with them. Glad to see you consider yourself equal to the people Mr. Treasury Secretary.

2) AIG Cover-up

As the head of the Federal Reserve Bank of New York chairman, Geithner was a key part in the $185 Billion bailout of AIG. A bailout that has since revealed an intent by federal authorities to cover-up transactions made, a payoff to counterparties of 100 cents on the dollar, multiple conflicts of interest (including the Goldman CEOs chair with the New York Fed), and billions in bailout dollars spent on things that weren’t necessary ($57 billion to European banks, $25 billion to subsidiaries, and about $80 billion in premiums on the CDOs paid off).

Had any private corporation committed the collusive actions that the New York Fed (and the Federal Reserve) along with AIG in the US, the company would collapse due to fraud and several executives would have been arrested. This reason is along worth enough for a resignation.

3) Lack of Rationality, Economic Knowledge

While I do not think the Treasury Secretary is stupid, I think he is doing a bad job of lying. Whether it was telling Steve Leisman (and possibly the Chinese) that the US is not monetizing debt, or telling CNBC at the Treasury Dept. that the government was going to keep its foot on the accelerator no matter what the economy does, and basically giving no consideration to inflation.

A Suitable Replacement

I believe that Shiela Bair, the current head of the FDIC, is a suitable replacement for Tim Geithner. She has done a good job seizing failed banks and selling their assets on a fixed budget. She has made sure that no American has lost their deposits during this crisis. She was a critic of the first bailout, which tells me she’ll think beyond stage one to solve a problem. Forbes Magazine gave her a good write-up and voted her #2 most powerful woman in the world in 2009.

The bottom line is that Shiela Bair is someone who is going to do what she thinks it’s best at Treasury, not what the Administration thinks is best. If you agree, join me in calling for the resignation of Timothy Geithner.

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