The legacy of outgoing U.S. Treasury Secretary Tim Geithner will be simple, said Rolling Stone contributing editor Matt Taibbi on Friday — and unflattering.
“He’s the architect of “too big to fail,” Taibbi told Democracy Now hosts Amy Goodman and Juan Gonzalez. ” When this all blows up — and it’s going to blow up, for sure, because things can’t continue the way they are right now — people are going to look back in history, and they’re going to say, “Who was to blame for this?” And Timothy Geithner is going to be the guy who designed this entire system.”
That picture is quite different from the one President Barack Obama painted in his sendoff to Geithner on Thursday, when he said that the history books would portray him as “one of our finest secretaries of the Treasury.” Geithner will be succeeded by Obama’s chief of staff, Jack Lew, a choice Taibbi described as a signal that the White House intends to keep bailing Wall Street out.
Author and former financial regulator William Black also criticized Geithner, saying he “created crony capitalism, American style” and helped develop regulations that will not prevent further financial trouble for the country. He also scoffed at the recent deal made by 10 major mortgage-lenders that will include $3.5 billion in payments to almost 4 million homeowners.
“The rest of the supposed $5 billion in settlement is really just what in the commercial world we call ‘troubled debt restructurings,’ which are the things you would do anyway if the government didn’t exist, because in most cases it’s better for the bank not to have the default, to instead reduce the principal slightly,” said Black. “So, none of that is actually a bailout. None of it is actually a settlement. It’s just the banks doing that which will profit maximize for the banks anyway.”
Watch Taibbi and Black discuss Geithner’s legacy and the issues behind the government’s Wall Street bailout, originally aired on January 11, 2013, below.