As the economy melted down in the Fall, the New York Times reported that Goldman Sachs CEO Lloyd Blankfein "was the only Wall Street executive at a meeting at the New York Federal Reserve on Sept. 15 to discuss the A.I.G. bailout." That bailout was a big deal to Goldman Sachs, because AIG insured many of its investments - and the spectacle of New York Fed chief Tim Geithner letting Goldman's CEO in the room to take part in negotiations over the government bailout looked like a textbook example of the kind of crony capitalism that candidate Barack Obama said he'd put an end to as president.
Despite President Barack Obama's pledge to limit the influence of lobbyists in his administration, a recent lobbyist for investment banking giant Goldman Sachs is in line to serve as chief of staff to Treasury Secretary Timothy Geithner...
"Considering that Goldman was an early and large recipient of our TARP funding, being pulled out of that really does effect his ability to be an effective chief of staff for the treasury secretary," said Steve Ellis, president of the watchdog group Taxpayers for Common Sense.
Just to put a little meat on Ellis's comments, recall that Goldman not only benefited from AIG's bailout, the firm itself pocketed about $12 billion in direct bailout funds, while paying billions in bonuses to executives.
Sure, I guess it's a step forward that the Treasury Secretary isn't an immediate former top executive at Goldman Sachs, as Hank Paulson was. But clearly, Geithner - just a day after squeezing through the Senate confirmation process - is back to his old tricks. With the executive branch having czarist power to hand out bailout money to almost any corporation on any terms, and with the new administration saying there will likely be even more Wall Street bailouts in the future, Geithner seems - once again - ready to give one of the largest banks (and largest Obama campaign contributors) at the center of the economic meltdown a front-row seat in making sure our taxpayer dollars keep flowing to Wall Street.
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