Credit Crunch Pinches Entire Lending System

Adviser irked that Geithner, not he, has Obama's ear

(NEWSER) - Economics guru Larry Summers will be out the Obama administration by November’s election, or shortly thereafter, Joshua Green contends —mainly out of frustration that Treasury Secretary Timothy Geithner, and not he, has become President Obama’s go-to adviser in that area. Blogging for the Atlantic, Green notes that, after being passed over for the top spots at Treasury and the Federal Reserve, “Summers is frustrated by his role, and his colleagues are clearly frustrated with him.” More»

Next big domestic issue will be 'fascinating' to watch

(NEWSER) - Once health care reform is “settled,” Nate Silver writes, the White House will be searching for a new domestic issue. Card check is too hard, immigration will have to wait for 2012’s “younger, more diverse electorate,” and gay rights is a slog. The winner, in Silver’s opinion, is bank reform. What's "fascinating" is how the issue has so far elicited responses from Congress that are “the strangest in the history of the institution.” More»

(NEWSER) - The heat is apparently getting to Tim Geithner. At a meeting last week with high-level financial regulators, the treasury secretary indulged in a potty-mouthed diatribe about delays in the administration's highly touted plan to overhaul the regulatory system, declaring, "enough is enough," the Wall Street Journal reports. Attendees included Ben Bernanke, FDIC chair Sheila Bair, and SEC chair Mary Schapiro. More»

After decades of deference, legislators turn on central bank

(NEWSER) - Tim Geithner testified before the Senate Banking Committee yesterday, but as the Washington Post reports, it's not the Treasury but the Fed whose growing powers most worry legislators. Republicans and Democrats are both venting that Ben Bernanke's office did little to stop the excesses of the boom years, only to release $1 trillion to shore up giants like Bear Stearns and AIG. Sen. Richard Shelby told Geithner that the administration's proposal "represents a grossly inflated view of the Fed’s expertise," notes Politico. More»

Krugman, Pearlstein agree: It doesn't address key problems

(NEWSER) - Barack Obama knows what caused the financial crisis, but his regulatory plan “basically punts on the question of how to keep it from happening all over again,” writes Paul Krugman in the New York Times. Obama’s plan takes the crucial step of regulating the “shadow banking” system, giving the Fed power over any systemically important institution. But it wouldn’t touch executive compensation or the ratings agencies, both of which played major roles in the crisis. More»