Posted by Karl Denninger
These hearings are simply amazing.
First, Tim Geithner. Timmy made a lot of noise about “total meltdown” risk (and indeed even referenced the possible loss of civil order!) but the question that was not asked is this: Who stoked that fear in Congress? That would be Bernanke and Paulson, right? They in fact told Congress “either hand over $700 billion for buying troubled assets or tanks will be in the streets.”
But then – on top of that – they didn’t do what they said they needed the money for and there were no tanks!
So we’re stuck with a handful of facts, none of which are in dispute:
- Congress was told that either $700 billion be handed out immediately or civil order would be lost. They were told this by Bernanke and Paulson and believed it.
- Congress took the action Paulson and Bernanke demanded but then did not spend the money as they said they would, and yet the “or else” did not happen.
- Yet neither Paulson or Geithner will take responsibility for the precise actions taken during what they, along with Bernanke, claimed was literally an “end of the world” event!
Paulson gets the cake though – he admitted (under oath!) that The Fed just blatantly printed the money to rescue AIG and the banks (!!!)
So let’s see – it wasn’t his decision, it wasn’t Timmy’s decision, and yet at the very same time the entire world was about to come to an end unless the Congress immediately handed over $700 billion of taxpayer money?
Oh, and let’s keep going. Paulson got skewered with what I pointed out in August of last year – that is, that he knew full well he wasn’t going to buy any “toxic assets” prior to the final vote being taken in The House but notified nobody in Congress of this fact.
Then Mr. Baxter’s turn comes and he says that Geithner signed off on paying AIG counterparties at par.
Didn’t Timmy claim he had no part in the negotiations with AIG and the determination of what to pay? I thought he did….. maybe I misheard, but I seem to remember that he has continually maintained that he had no part in the decision process and in fact recused himself……
I had no role in making decisions regarding what to disclose about the specific financial terms of Maiden Lane II and Maiden Lane III, and payments to AIGs counterparties.
Uhhhhhhh Turbotax Timmy? How do you explain that?