Now we have a book coming out from venerable author Ron Suskind stating that in his 3rd month in office, Obama actually told Treasury Secretary Geithner to come up with a plan to dismantle Citigroup and the other giant Wall Street institutions, and Geithner ignored the order!!! Seems pretty fishy to me. I would not have even considered it if it were from a lesser author. But here's Suskind in an article from the AP:
A new book offering an insider's account of the White House's response to the financial crisis says that U.S. Treasury Secretary Tim Geithner ignored an order from President Barack Obama calling for reconstruction of major banks.
According to Pulitzer Prize-winning author Ron Suskind, the incident is just one of several in which Obama struggled with a divided group of advisers, some of whom he didn't initially consider for their high-profile roles.
The book states Geithner and the Treasury Department ignored a March 2009 order to consider dissolving banking giant Citigroup while continuing stress tests on banks, which were burdened with toxic mortgage assets.This blogger is skeptical. But even if it's true, why didn't Obama make a course correction? Why didn't he fire Geithner and appoint Chairman Paul Volcker or FDIC head Sheila Bair (the later is even a moderate Republican, which would have given Obama the "bi-partisan street cred" he so yearns)? Furthermore, at some point Obama must have figured out that Citigroup had not been put into FDIC receivership? Did he not know that the Stress Tests on the banks were a joke? In fact, as the legendary financial crimes prosecutor Bill Black said as early as February 2009, There Are No Real Stress Tests Going On.
In the book, Obama does not deny Suskind's account, but does not reveal what he told Geithner when he found out. "Agitated may be too strong a word," Suskind quotes Obama as saying.
Furthermore, surely he knew that his Treasury Secretary's PPIP program was an absurd scheme (masquerading as a policy) for the banks to dump their worst assets on the taxpayers' balance sheet?
I don't buy it. I'm suspicious of the sentiment expressed by many of Obama's strongest supporters who blame his failures, especially with regards to Wall Street, on "his advisers". The thinking usually goes something like this: "Obama is a great guy who really wants to do the right thing. If only people like Geithner and Summers would let him"
I think this might have been plausible in year one, but now in the Fall of 2011, it's quite clear that Obama is fully aware of the agenda his appointees are carrying out, and it seems near impossible that their agenda is not coming from the President himself, with his full endorsement. As Geithner is the last remaining core member of the original Obama economic team, it seems highly unlikely that Geithner is not dutifully carrying out the agenda of his boss.
With that said, I look forward to reading more about Rob Suskind's book, which is apparently coming out next week. I will also be providing more thoughts on how Obama blew his presidency.
Yves Smith - Latest Lame Obama excuse