Hot on Facebook

Guy Buys $123 Safe on eBay, Finds $26,000 Inside Seller tries to get half the cash back, fails »

House Grills Geithner on AIG

Treasury Secretary defends big bailout as necessary

By Kevin Spak, Newser Staff

Posted Jan 27, 2010 10:39 AM CST

(Newser) – Timothy Geithner defended the AIG bailout he helped engineer today, in testimony before a House Oversight Committee that was out for blood. “In effect, the taxpayers were propping up the hollow shell of AIG,” declared chairman Edolphus Towns, “and the rest of Wall Street came by and looted the corpse.” Geithner protested that though the decision to rescue the insurance giant was “exceptionally difficult” it had prevented a “second Great Depression.”

The committee’s top Republican, Darrell Issa, was no kinder. He asked Geithner if he’d ever become involved with the Fed’s discussions on the counterparty claims issue as Treasury secretary. When Geithner replied that he hadn’t, Issa displayed an email proving that he had. Geithner departed from his final remarks in his closing, saying, “If you are outraged by AIG—and you should be—then you should be deeply committed to financial reform.”

Treasury Secretary Timothy Geithner testifies on Capitol Hill in this Dec. 2, 2009 file photo. (AP Photo/Manuel Balce Ceneta, file)

« Prev« Prev | Next »Next » Slideshow

CLICK BELOW TO VOTE

20%

60%

To report an error on this story, notify our editors.

OTHER STORIES ON OUR RADAR

Getty Images

35 Brutally Honest Reasons Men Say No to Sex (The Stir)

Man in Mugshot Explains Why He Has Half a Head (HuffPost)

These Exes Were Spotted Making Out … and That's a Bad Thing (Bleacher Report)

Help! I'm Having an Incestuous Relationship With My Twin (Slate)

Which Celeb Dedicated Song to Her Famous Husband Despite Divorce Rumors? (NewsOne)

Partner Links

A snapshot of the day's best news stories.

View Larger Grid

All Today Yesterday Pick a Date

COMMENTS

Read the comment policy

Showing 3 of 11 comments

Fondue

Jan 28, 2010 1:21 AM CST

Capitalism Fail

ljm

Jan 27, 2010 10:56 AM CST

Has everyone forgotten how scary it was to wake up every morning to hear that another bank had gone under? To see 401ks in free fall? To see large retail shops folding and people out of work? The thing that pisses me off about this article is that nothing has been done to prevent the same scenario from happening again! I dont care fire ghietner but that won't fix the basic systemic problems.

speakerfixer

Jan 27, 2010 10:50 AM CST

"If we didn't bail out AIG, there would have been a second Great Depression". Nice instance of the old saying "If you tell a big enough lie, often enough, people will come to take it as fact"...

What's Popular Now on Facebook

E-Cigarette Explodes in Man's Mouth

Guy Buys $123 Safe on eBay, Finds Major Cash Inside

New York Times (Source Grid »)

Money • Politics

AIG • bailout • House Committee on Oversight and Government Reform • Darrell Issa • Wall Street bailout • Timothy Geithner • Edolphus Towns

More Newser Stories

Fed Duo Sounded Alarm Over AIG 'Gifts' to Banks

Geithner, Paulson face grilling over 'backdoor bailouts' for AIG clients

(NEWSER) - Two Federal Reserve governors expressed their unease about the Fed's rejection of a plan to force big banks to return $30 billion in cash they received from AIG before its bailout in late 2008. The officials warned that the decision to let the banks, including Goldman Sachs, keep the collateral they paid AIG on credit insurance contracts might be "a gift" to the firms, according to documents obtained by the New York Times. More»

Geithner Will Testify on Secretive Bailout Deals

House committee wants answers on his role on AIG contracts

(AP) - Treasury Secretary Timothy Geithner will testify Jan. 27 before a House probe into his role in deals that sent billions of bailout dollars to Goldman Sachs and other big banks. The committee wants to know why the Federal Reserve Bank of New York—which Geithner headed at the time—paid banks to cancel contracts with AIG and didn't demand concessions. The deals might have cost taxpayers billions more than necessary. More»

NY Fed Told AIG to Hide Payouts

Details of 'backdoor bailout' hushed up

(NEWSER) - The Federal Reserve Bank of New York pressured AIG not to release details of massive payments it made to banks after it was bailed out, email exchanges released yesterday reveal. The insurer paid banks, including Goldman Sachs, in full for securities linked to subprime mortages, a move critics say amounted to a government-backed "backdoor bailout" of $62 billion. More»

AIG Bailout Squandered Our Money, Trust

Geithner & Co. were afraid to ask Wall Street for concessions

(NEWSER) - Financial officials, “most notably Timothy Geithner,” deservedly lost the public's trust with their no-strings-attached bailout of AIG, Paul Krugman rails in the New York Times . As a damning report from the TARP inspector general points out, the government made no serious attempt to extract concessions from the banks that made bets with AIG, instead paying them back 100¢ on the dollar—with taxpayer money. More»

Geithner: We'll Deduct AIG Bonuses From Next Bailout

Insurer will be forced to return $165 million, treasury boss says in letter

(NEWSER) - Treasury Secretary Tim Geithner promised last night that taxpayers wouldn't be paying a penny toward AIG's massive executive bonuses, Bloomberg reports. He explained in a letter to lawmakers that the government would require the insurer to pay back the $165 million from company operations and that an equal amount would be deducted from the next round of bailout payments. Geithner also vowed to speed up AIG's restructuring. More»

NEWS FROM OUR PARTNERS

What is Newser?

Face it: there's too much news. At Newser, we choose the most thought-provoking and entertaining stories from hundreds of US and international sources and reduce them to a headline, picture, and two paragraphs. And we do it 24/7—you can come back morning, noon, night (and in between) for something new that matters. Read less, know more.

Learn more »

Partnering with: Slate

View Newser on the mobile website

House Grills Geithner on AIG

Treasury Secretary defends big bailout as necessary

OTHER STORIES ON OUR RADAR

AIG • bailout • House Committee on Oversight and Government Reform • Darrell Issa • Wall Street bailout • Timothy Geithner • Edolphus Towns

MOST POPULAR STORIES

[ By Views ]

[ By Comments ]

More Newser Stories

Fed Duo Sounded Alarm Over AIG 'Gifts' to Banks

Geithner, Paulson face grilling over 'backdoor bailouts' for AIG clients

Geithner Will Testify on Secretive Bailout Deals

House committee wants answers on his role on AIG contracts

NY Fed Told AIG to Hide Payouts

Details of 'backdoor bailout' hushed up

AIG Bailout Squandered Our Money, Trust

Geithner & Co. were afraid to ask Wall Street for concessions

Geithner: We'll Deduct AIG Bonuses From Next Bailout

Insurer will be forced to return $165 million, treasury boss says in letter

About Us

Site

Newser By Users

Community

Site Maps

Tools

More News

What is Newser?

House Grills Geithner on AIG

Treasury Secretary defends big bailout as necessary

Bookmark & Share

OTHER STORIES ON OUR RADAR

AIG • bailout • House Committee on Oversight and Government Reform • Darrell Issa • Wall Street bailout • Timothy Geithner • Edolphus Towns

MOST POPULAR STORIES

[ By Views ]

[ By Comments ]

More Newser Stories

Fed Duo Sounded Alarm Over AIG 'Gifts' to Banks

Geithner, Paulson face grilling over 'backdoor bailouts' for AIG clients

Geithner Will Testify on Secretive Bailout Deals

House committee wants answers on his role on AIG contracts

NY Fed Told AIG to Hide Payouts

Details of 'backdoor bailout' hushed up

AIG Bailout Squandered Our Money, Trust

Geithner & Co. were afraid to ask Wall Street for concessions

Geithner: We'll Deduct AIG Bonuses From Next Bailout

Insurer will be forced to return $165 million, treasury boss says in letter

About Us

Site

Newser By Users

Community

Site Maps

Tools

More News

What is Newser?