Geithner Neuters FDIC's Sheila Bair in New Regulatory Overhaul. She Thinks Her Job is To Protect People, Not Banks.
By Susie Madrak Friday Jul 03, 2009 2:00pmThe New Yorker has a great profile of Sheila Bair, the populist Republican who's at the helm of the FDIC. (h/t Riverdaughter)
As you may already know, Bair is not well liked by the Wall St. crowd that's running the White House show. (Apparently she has this bizarre idea that her job is to look out for working folk. Crazy talk!) Well, she's very popular with regular people - the administration wouldn't get rid of her, it would make a stink. Instead, they've just neutered her:
These debates entered into the Administration’s discussions about building a new regulatory architecture. In late March, Geithner previewed for Congress some of the key concepts that Treasury wanted. The outline seemed to match the Bair camp’s ideas. [Ladies, has this ever happened to you?] A new authority with the power to take over large financial institutions that posed a systemic risk to the economy was modeled on the F.D.I.C., which, Geithner suggested in his testimony, would be an equal partner with Treasury in resolving such firms if they failed. He seemed to be saying that although he and Bair may have disagreed about how to handle the current crisis, there was much more consensus about how to deal with a future one.
But in the white paper detailing the new legislation, which the Administration released on June 17th, all the new authority to regulate firms that posed systemic risk was vested in the Federal Reserve. During Geithner’s testimony before the Senate, Jim Bunning, of Kentucky, echoing Bair, was incredulous. “It took fourteen years for the Fed to write one regulation on mortgages after we gave it the power to do that,” he said. “What makes you think that the Fed will do better this time around?” In addition, while the March plan said that the “Secretary and the FDIC would decide” how to resolve a failing firm, the new plan said such power should “be vested in Treasury.” Geithner could appoint the F.D.I.C. to do the technical work of cleaning up the firm, but between late March and mid-June — when Bair’s aggressive ideas about how to handle Citigroup leaked to the press — Bair’s agency had been downgraded from Treasury’s equal partner to a sidekick.
The senior Treasury official said that stripping authority from the F.D.I.C. had nothing to do with pressure from the banks. “Making a group decision on something that must be done really quickly is not easy,” he said. “At the end of the day, someone has to have the ability to make a call, and it’s better to have that authority vested in one person.”
When I asked Bair about the plan, she said, “I think it reflected a lot of input from a lot of different agencies, and the private sector, and insurance and consumer groups. It’s a very difficult task to try to balance all the different perspectives and come up with a package, and every compromise is going to have people who are unhappy about various parts of it. So I think it’s a starting point.” I said that she sounded disappointed. “I don’t know if ‘disappointed’ is the right word,” she replied.
Login or Register to post comments.
You don't like Obama. Not all insider infighting can be laid at his footsteps. You don't even know anything about this woman, a republican, or the competing plans they are pushing, but you are reflexively ready to criticize the administration. I guess this is what passes as informed blogging.
Cue the ditto heads ready to denounce my post in 3, 2, 1...
When I can just shake my head slowly Hand over face optional.
matter the source.
You don't even know anything about this woman,
catually, anyone with a google can find out all you'd wanna know about her.
Your St. Barry is a sold-out, corporatist. His job is to make the GOP electable next time.
Mission: accomplished...
what ever you say.
You're right Dangermouse.
The issue with Bair is that she thinks she can say anything just because she believes she's right. Okay, maybe she is, maybe she isn't, but this is DC, and people who forget that they are indeed subordinate soon find themselves out of a job, or in this case, out in the cold.
You can believe that she's disliked because she's the only one "telling the truth" (yah right), or you can face the fact that she's disliked because she's a narcissistic loose cannon.
Given that some blame her ham-fisted handling of WaMu for aggravating the bank wholesale-funding market last year, perhaps a little less hero-worship is in order?
what do you know about the competing plans or Sheila Barr??
I guess this is what passes as informed trolling - by a MOUSE, no less!
Wow. Stooping to mocking his (her?) username. You must be so proud.
you will note that they adopted the majority of Bair's plan, and the supposed "neutering" is that instead of the FDIC overseeing the plan, it will be the federal reserve. Excuse me if I don't flip out because the power to run this thing was entrusted to the FED and not the FDIC. That is the very essence of territorial infighting. It does not prove that Sheila Bair is some sort of "populist Republican" out there fighting for the little people.
The truth is I know very little about Bair. And I learned nothing from reading this post. This is isn't intelligent blogging - its cutting and pasting. Given that in 90% of Susie's post she takes some sort of dig at Obama (some of which I agree with, civil liberties...) I would at least like her to take intelligent digs so I don't feel like I'm wasting my time. I mean, read the story. The central complaint seems to be the plan doesn't give the FDIC the same authority as Treasury and the Fed Reserve. But, they have never had the same authority! It seems to me the central criticism is that Bair isn't getting her ass kissed enough. I'm sorry, but I don't really care about that.
As a professional who has followed both the genesis of the banking debacle and the career of Ms. Bair since 2003, I can tell you that ego is not the problem. Bair has been in the forfront of both the subprime and the wall street meltdowns. her first warning was sounded in 2005, which was ignored by the previous administration. Whether the ultimate authority and/or responsibility lies with the Fed or the FDIC, remember that the FDIC's primary responsibility is to safeguard the insurance fund. That task in itself must also entail ensuring that safe, sound and fair banking practices are followed.
She may be politically identified as a Republican, but her whole history has been one of protecting both the consumer and the banking industry from the self-serving practices of the unscrupulous.
Remember, the fund is there to mitigate the loss of 'your' money when bankers decide that 40-1 risk is acceptable.
... you provide ZERO insights yourself, other than silly ad hominems.
What is good for the gander is not good for you goose?
good..Shelia Bair is smarter than Geithier and not a Wall Street insider like him! I like Obama and trust him but Geithener is not --not a favorite nor is he with anyone but himself and the street! She came up with a solution before the TARP that benefited Paulsen and Geithners buddies! Need to call Congress and email the WH..to watch this closely..The 'Street' needs oversight!
Bust those trusts!
I think we need to go back to Teddy Roosevelt. He would be apaulled at the shit going down.
The Geithner Treasury appointments have obviously been racist and displayed ultimate cronyism because they all have one ethnicity in common, but in America we're not permitted to mention it.
It is absurdly analogous to the KKK calling the blacks in the 60s racist because they complained about the whites forcing them to ride in the back of the bus. This time it is not the whites nor the KKK who are racist. Hint: Few if any of Geithner's appointments represent Gentiles, Muslims or Hindus, etc. that make up 98% of the USA.
Sheila Bair is one of the few in the Obama administration that defended the interests of average Americans who have been screwed by the money mongers of Wall Street.
Anti-Semite or troll? I can't tell...
If it is good for Goldman Sachs, the investment banks and Wall Street....it is bad for America.
Until we Americans understand fully how detrimental the relationship between our government and this minority of overpaid capitalist financier deal makers of Wall St. and their agenda that promotes an underemployed, dumbed down, under compensated, outsourced, illegal immigranted America we are failing in our duty as conscientious American voters.
Susie why do you hate Obama so very much? We get it you disagree with pretty much everything he is doing and hate Geithner...cool. It's getting to be a little repetitive and predictable.
Bair is the awesomest ever and stuff...
I mean, she's such an outsider and a populist to boot...
Whatever.
Bair was so desperate to 'do something' last fall that she gave WaMu to JP Morgan with a little $30 Billion gift attached.
Face it, she's a Repuke, and therefore should never be trusted. If she really cared about the little people, she wouldn't be a GOPer.
Now where have I heard that before?...
What a surprise that the content of this post is brought to us courtesy of "riverdaughter" or "riverchucky", as she's known to many.
"Riverdaughter" is a well-known PUMA bigot who believes that any enemy of the "Obamamessiah" is her friend.
PUMA? What's PUMA?
Puke Up Mom's Ashtray?
Put Under Million Avocados?
A large tawny-furred feline endemic to North and South America?
Thank you for enlightening me.
Wall Street Geithner sucks, and so does Derivatives Summers. These two corporate whores represent everything that is wrong with the DLC, republican-lite branch of the democratic party.
Shame on Obama for choosing these two asswipes! They ARE part of the problem, not the solution.
Attacks from the blind. Obama has done nothing to solve the banking financial crisis. If fact he put two of the men responsible for the problem in charge of "fixing" the mess.
you will note that they adopted the majority of Bair's plan, and the supposed "neutering" is that instead of the FDIC overseeing the plan, it will be the federal reserve. Excuse me if I don't flip out because the power to run this thing was entrusted to the FED and not the FDIC. That is the very essence of territorial infighting. It does not prove that Sheila Bair is some sort of "populist Republican" out there fighting for the little people.
The truth is I know very little about Bair. And I learned nothing from reading this post. This is isn't intelligent blogging - its cutting and pasting. Given that in 90% of Susie's post she takes some sort of dig at Obama (some of which I agree with, civil liberties...) I would at least like her to take intelligent digs so I don't feel like I'm wasting my time. I mean, read the story. The central complaint seems to be the plan doesn't give the FDIC the same authority as Treasury and the Fed Reserve. But, they have never had the same authority! It seems to me the central criticism is that Bair isn't getting her ass kissed enough. I'm sorry, but I don't really care about that.
I like to assume a certain amount of historical knowledge. If you don't wish to exert enough effort to inform yourself, I suggest you skip over my posts.
You expect people reading this blog to know who Bair is? Why don't you address my criticisms, namely that all this is infighting over which agency gets to regulate. But no, continue to cut and paste and pat yourself on the back. You will feel better about yourself...
any regulatory powers is going to prove to be disasterous. The Fed serves nobody but itself, the private banking cartel from which it was created. Regulatory authority needs to be vested in the SEC or other government agency, like the OCC, because the fed, which is about as Federal as Federal Exporess, is going to be at the root of most of the future shenannigans that take place. I think that expanding the powers of the Fed was one of the points behind the shock doctrine that engineered this mess. It is insane to invest a non government entity with regulatory powers; obtainig those powers has been a goal of the Fed since this fractional reserve central banking system was created under Woodrow Wilson.
Big fucking mistake. Big one.
I'm saddened by all the commenters attacking Susie here.
Those people act like the conservative authoritarian fools they envision themselves fighting. They are hung up on superficial brands, can't stand any critisism of "their side", and prove to live with their head up their a**, not knowing that giving the privately owned Federal Reserve more power is the last thing the country needs.
Those people are an embarassment to anything supposedly "liberal" or "progressive", and would fit much better into an blindly partisan, authoritarian institution like the GOP, feeding on cluelessness and black and white thinking. Shame on them.
Login or Register to post comments.