No Change Alert: Bailout Hank Hands Off To Bailout Tim

Timothy Geithner, right, has a lot more to answer for than some unpaid taxes.

Obama's choice to head the Treasury Dept. has a lot more to answer for than some unpaid taxes.

Once again, the corporate media is fiddling a stupid jig while Rome burns. This time around, the tune is the rocky confirmation hearings for Timothy Geithner, Obama’s choice to replace Bailout Hank Paulson as Treasury Secretary.

Apparently, because Geithner neglected to pay taxes on his housekeeper, his nomination is in jeopardy. Meanwhile, the fact that he was one of the main people who helped Paulson design the disastrous Wall Street bailout is barely being mentioned.

And neither is this bombshell:

Geithner’s tenure at the New York Fed - which bore the major responsibility for supervising Citigroup - covers a tumultuous span in which the sprawling conglomerate spiraled from the country’s biggest banking company to one of its largest welfare cases.

…

… poor risk management and weak capital levels were central to Citigroup’s undoing. One enforcement agreement in place before Geithner took office in 2003 - an order requiring quarterly risk reports - was lifted during his watch. A ban on major acquisitions also was eliminated a year after it had been imposed in 2005.

Citigroup, as we’ve written on, was–until recently–former Clinton Treasury Secretary and current Obama economics adviser Robert Rubin’s shop. Apparently, Geithner was so confident in Rubin and the other geniuses in charge of the massive superbank, he gave them free rein to make huge amounts of risky investments without requiring them to report back to regulators or hold adequate capital on the books to cushion themselves in case of a crisis. That seems like negligence enough in our books. But, at the same time, Geithner also let Rubin et all go on a merger and acquisition spree so they could suck up other banks with even more risky investments on their balance sheets.

Lo and behold, Geithner’s lax regulatory style didn’t work out so good. Rubin and the rest of Citi’s brass used all that rope he gave them to hang themselves. Now, thanks to Geithner, taxpayers are on the hook for hundreds of billions of dollars. Not exactly comforting news, Tim! And as for “change we can believe in,” well … not so much.

“But,” say the D.C. press corps, dancing and reeling as the burning pillars of our economy collapse around our ears, “what about that housekeeper, eh? What a scandal!”