Sheila Bair, head of the Federal Deposit Insurance Corp. during the financial crisis, has a new book out, Bull By the Horns. I haven’t read it, but early reports have it especially twisting the shiv into Tim Geithner, president of the New York Fed under Bush and Treasury Secretary under Obama. Geithner “looked like a scared little boy” at a 2009 press conference laying out the stress tests. Also, he was way, way too close to Citigroup.
Bush Treasury Secretary Hank Paulson gets some score settling as well: Among other things, for pulling a “bait-and-switch” on taxpayers for claiming that TARP wouldn’t allow funds to be used for mortgage-loan modifications. She slams the Obama administration’s 2009 initiative to help struggling homeowners as little more than a public-relations stunt. She gets some revenge for, in her view, being shut out of the Paulson-Bernanke-Geithner boy’s club. Who wouldn’t want to see this bunch taken down?
The Naked Capitalism blog offers up more about the book, and it’s tempting to see Bair as the truth teller who wanted to stop the big banks but was foiled. Meanwhile, Felix Salmon of Reuters pushes back against some of Bair’s charges.
I want to read her chapter on Washington Mutual. It was Bair who most insisted on closing the 119-year-old institution and handing its substantial good assets and branch network over to Jamie Dimon of JPMorgan Chase. Bair and the other bigs in D.C. were curiously uncurious about the rumors and short-selling the brought on a bank run at WaMu and make its rescue much more problematic.
For somebody who casts apparently casts herself as the foe of big banks, she helped the biggest get bigger still. An opportunity was lost to preserve the “good” WaMu as an independent institution and prevent further consolidation. The charitable answer is that Bair was only looking out to keep the FDIC fund safe. Even so, bad call. She could be a scab official in the NFL.
And Don’t Miss: Bakken oil-shale production and the ‘Red Queen’ || The Oil Drum
Today’s Econ Haiku:
‘May I help you, please?’
Words Boeing’s suits want to hear
Nerds ain’t Wal-Mart temps