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Geithner: Goldman Woulda Failed Sans Bailout

Execs dreaming if they think they wouldn't have failed

By Polly Davis Doig,  Newser Staff

Posted Dec 6, 2009 9:45 AM CST
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(Newser) – Goldman Sachs fatcats were musing this week about how they might have been fine without a federal bailout, but Tim Geithner is having none of it: “None of them would have survived,” he tells Bloomberg, without federal intervention. “The entire US financial system and all the major firms in the country, and even small banks across the country, were at that moment at the middle of a classic run, a classic bank run.”

Also from the Al Hunt interview:

  • On financial reform: “It is very important that we change the way these executives are paid, the form of compensation, this year. We have to end that era of irresponsibly high bonuses. ... The basic problem we face across the system is that executives were paid for taking imprudent risks,”
  • On TARP repayments: “We now estimate that we’re probably going to have $175 billion in repayments from the banking system by the end of next year."

Goldman Sachs CEO Lloyd Blankfein, left, got a little too big for his britches this week, says Treasury Secretary Tim Geithner.
Goldman Sachs CEO Lloyd Blankfein, left, got a little too big for his britches this week, says Treasury Secretary Tim Geithner.   (AP Photo/Manuel Balce Ceneta, file)
US Treasury Secretary Tim Geithner listens to a question during a news conference following the G20 finance minister's summit in central London, Saturday, Sept. 5, 2009.
US Treasury Secretary Tim Geithner listens to a question during a news conference following the G20 finance minister's summit in central London, Saturday, Sept. 5, 2009.   (AP Photo/Lefteris Pitarakis)
Don't mess with Tim Geithner, silly Goldman boys.
Don't mess with Tim Geithner, silly Goldman boys.   (AP Photo/Lefteris Pitarakis)
Treasury Secretary Tim Geithner swatted back at Goldman Sachs execs who speculated this week that they could have survived without federal intervention.
Treasury Secretary Tim Geithner swatted back at Goldman Sachs execs who speculated this week that they could have survived without federal intervention.   (AP Photo/Haraz N. Ghanbari)
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COMMENTS
Showing 3 of 21 comments
SilenceDogood
Dec 7, 2009 12:53 PM CST
Gnieberg, thanks for the commentary. In retrospect it would appear that America could have avoided the financial calamity we are discussing by; 1. Limiting the size of the financial institution to more reasonable size, thereby limiting the fallout if an institution fails (i.e. more mid size banks, less Leviathans); 2. Increase regulatory guidance and reduce the risk tolerance that these financial institutions participate in; 3. I am not sure we can blame the bankers for the repeal of the Glas-Stegal Act, what is you opinion of the impact that action had of the recent financial turmoil? 4. I agree with you assessment that the Berle-Means conclusion is proven by today’s executive compensations, and more stringent controls need to be in place to protect the shareholders interest. However this is a concept much easier to debate than to execute, although I agree with the concept. 5. It is the small businesses in America that are swept around in the currents of this financial storm we are in, how can we stabilize this mess to protect them? It seems to me that the only way is to prevent this mess from reoccurring; 6. I do not see the current financial mess improving for some time, I do think we have stabilized the patient, but I do see him out of the ICU for al least two years. Your opinion?
brawne
Dec 7, 2009 2:26 AM CST
Stupid, stupid don'tlikeyou. You still are a whore to the political parties when they both made you poor. But, they count on your vote to keep the artificial economy that yes, makes us all poor, to keep making them rich. The day that you value your own bank account over partisan politics is the day the middle class wins. But, they, the thing that honors neither liberal nor conservative knows that you will never lean toward the left to save yourself anymore than a liberal will lean toward the right. Know why Obama's numbers are going down? Cause independents like me--I give a shit about social issues, but care about the election--are getting pissed that we've been used once again just like with Bush. All you cement left--right people don't understand what it means to be the tiny, thinking minority in this country that wins or loses elections. Cause you care about abortion, or melting glaciers.
brawne
Dec 7, 2009 2:13 AM CST
Guess you don't know who Geintner was before this incarnation. He used to be the lid on all those pots and now he's saying screw you I ain't a lid anymore. Yeah, little late but Obama has given him the balls to say even this. Meaning that in 2001 when the government intervened in the free market system and purposely shoved trillions with no interest increases--when the government took over the free market--is still a problem today. The problem with conservatives is that they are all home schooled and unless mom was an economist--you don't get it. The free market in this country was destroyed the day Bush said buy and Greenspan held down the interest rate artificially. You have to have some understanding of economics, but I can give you a hint as to what happened to us--The Copenhagen Theory. And to you idiot conservatives who have no clue about anything but guns and wombs--I could put a million dollars in t-bills tomorrow and the rate would be zero. If my credit card gets not paid the rate is like 29%. Or more. you think that is a free market? Idiots. It is a market for rich people borrowing who have no capital to invest.

 
Goldman Sachs • Lloyd Blankfein • bank failure • Treasury secretary • financial crisis • Wall Street bailout • Timothy Geithner • TARP • TARP repayment

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