Geithner Rejects Goldman Sachs Assertion It Didn't Need U.S. Help
By Rich Miller and Christine Harper
Dec. 5, 2009 -- Bloomberg Press:
Treasury Secretary Timothy Geithner disputed claims by Goldman Sachs Group Inc. executives that the bank could have survived the financial crisis without government help and said it and other Wall Street firms should show some restraint in handing out bonuses this year.
“It is very important that we change the way these executives are paid, the form of compensation, this year,” Geithner said in an interview yesterday for Bloomberg Television’s “Political Capital with Al Hunt,” which is being aired throughout the weekend. “We have to end that era of irresponsibly high bonuses.”
President Barack Obama has blamed compensation tied to excessive risk-taking for fueling the deepest financial crisis since the Great Depression. The administration has named a special master to approve compensation packages at firms that have received the biggest government bailouts.
Goldman Sachs, Morgan Stanley and JPMorgan Chase & Co.’s investment bank are set to pay record combined bonuses this year, according to analysts’ estimates. Goldman set a Wall Street pay record in 2007 when its compensation totaled $20.2 billion, including $68.5 million for chairman and chief executive officer Lloyd Blankfein.
Blankfein told Vanity Fair magazine in an article published online this week that he thought the company could have survived the financial turmoil on its own without government help. Goldman’s president, Gary Cohn, was more definitive. “I think we would not have failed,” he told the magazine. “We had cash.”
Geithner, 48, took issue with that, saying that the entire financial system was at risk at the height of the crisis, including Wall Street’s big institutions.
Classic Bank Run
“None of them would have survived” had the government stood aside and let the crisis run its course, he said. “The entire U.S. financial system and all the major firms in the country, and even small banks across the country, were at that moment at the middle of a classic run, a Classic Bank Run.”
New York-based Goldman Sachs, the fifth-largest U.S. bank by assets, accepted $10 billion from the Treasury and other forms of government support last year. It has since returned the funds with interest, as have firms including Bank of America Corp., JPMorgan Chase and Morgan Stanley.
Geithner said that most of the money the federal government injected into banks through the Troubled Asset Relief Program will likely be paid back. “We now estimate that we’re probably going to have $175 billion in repayments from the banking system by the end of next year,” he said.
Goldman spokesman Lucas van Praag said the firm recognized that it would have failed had the financial system broken down.
“If the financial system collapsed, we would have collapsed too,” he said. “We believe that government action averted a major systemic problem.”
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9 comments:
It's about time that banks and financial institutions are being regulated again.
Capitalists just have one thing on mind..... avarice=unbridled greed.
Free market is an illusion. There is no such beast. Someone pays for it and it's usually the middle class and the poor.
When free trade (NAFTA) was introduced I realized immediately that it would cost the USA and Canada millions of jobs. So far my prediction has come true unfortunately. If I could predict it, then for sure big business knew it already.
Capitalists just have one thing on mind..... avarice=unbridled greed.
Free market is an illusion. There is no such beast. Someone pays for it and it's usually the middle class and the poor.--Anon2
So what system would you prefer? Marxism? Our middle class and poor (to include Canada---last time I checked that was a capitalist system as well)have it much better off than the middle class and poor of other countries. You must be delusional.
NAFTA? Clinton, honey, Clinton
President Clinton faced in convincing Congress that the controversial piece of legislation would truly benefit all Americans. The agreement was signed into law in the U.S. on December 8, 1993, by President Bill Clinton and went into effect on January 1, 1994
System that I favor is a society of justice for all, equal opportunities for all and regulations for unbridled greed.
Canada is a capitalist society with regulations of banks and financial institutions. No bank has failed here so far and an unemployment figure currently of 8%, not 10.2 or 10.0 %. In addition a single payer health care system for all Canadian citizens.
You can't beat that!!
We had a conservative PM who pushed and signed NAFTA. DUH!!
We had a conservative PM who pushed and signed NAFTA. DUH!!--Anon2
Well we didn't---Duh!!! We had Clinton, a liberal---DAH!!!
System that I favor is a society of justice for all, equal opportunities for all --
ANON2
We have that here in the USA.
casey said...
"System that I favor is a society of justice for all, equal opportunities for all --
ANON2
We have that here in the USA.
No you don't caseyboy. Search your soul (if you've got an honest one) and you'll have to agree with me.
No you don't caseyboy. Search your soul (if you've got an honest one) and you'll have to agree with me.Anon2
Wooooo...guess you "got me" again.
Again, you give no facts to base this opinion on. The USA has been called the "land of opportunity" by people of all countries, many of whom have risked their lives to come here. Don't try to distort that.
Here you've got an article about the so called "land of opportunity:
http://www.nytimes.com/2007/07/13/opinion/13fri2.html
Excerpt: (for the lazy ones who don't want to know about/look up the truth)
"When questioned about the enormous income inequality in the United States, the cheerleaders of America’s unfettered markets counter that everybody has a shot at becoming rich here. The distribution of income might be skewed, but America’s economic mobility is second to none.
That image is wrong, and these days it abets far too many unfair policies, including cuts in essential programs like Head Start or Medicaid. The poor, we are told, can use their own bootstraps. President Bush got away with huge tax cuts for the rich in part because nonrich Americans, who make up most of the population, believe everybody has a chance of making it into the club. Unfortunately, the American dream is not that broadly accessible.
Recent research surveyed by the Organization for Economic Cooperation and Development, a governmental think tank for the rich nations, found that mobility in the United States is lower than in other industrial countries. One study found that mobility between generations — people doing better or worse than their parents — is weaker in America than in Denmark, Austria, Norway, Finland, Canada, Sweden, Germany, Spain and France. In America, there is more than a 40 percent chance that if a father is in the bottom fifth of the earnings’ distribution, his son will end up there, too. In Denmark, the equivalent odds are under 25 percent, and they are less than 30 percent in Britain."
There you go.... Caseyboy
About my previous post the header was missed and so it should have started as:
"The Land of Opportunity?"
That is such Bullshit you old hippie. How long did it take you to find that website. Hardly an impartial study or site. Typical...
Well it fits in with your viewpoint, so as far as you are concerned it must be "the truth". Same site where you got the Palin article...So transparant.
The Brookings Institute says otherwise:
The American public has always cared more about equal opportunity than about equal results. The commitment to provide everyone with a fair chance to develop their own talents to the fullest is a central tenet of the American creed. This belief has deep roots in American culture and American history and is part of what distinguishes our public philosophy from that of Europe.
So, you old tool, It depends on what you WANT to find. YOU want to find the worst about America, so you obviously will search until you find it. You aren't interested in the facts. You think that you already know them.
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