Spitzer: Look Who's Running the New York Fed

http://www.slate.com/id/2217811/

Slate.com

Fed Dread
The New York Fed is the most powerful financial institution you've never heard of. Look who's running it.

By Eliot Spitzer

May 6, 2009

The kerfuffle about current New York Federal Reserve Bank Chairman Stephen Friedman's purchase of some Goldman stock while the Fed was involved in reviewing major decisions about Goldman's future—well-covered by the Wall Street Journal here and here—raises a fundamental question about Wall Street's corruption. Just as the millions in AIG bonuses obscured the much more significant issue of the $70 billion-plus in conduit payments authorized by the N.Y. Fed to AIG's counterparties, the small issue of Friedman's stock purchase raises very serious issues about the competence and composition of the Federal Reserve of New York, which is the most powerful financial institution most Americans know nothing about.

A quasi-independent, public-private body, the New York Fed is the first among equals of the 12 regional Fed branches. Unlike the Washington Federal Reserve Board of Governors, or the other regional fed branches, the N.Y. Fed is active in the markets virtually every day, changing the critical interest rates that determine the liquidity of the markets and the profitability of banks. And, like the other regional branches, it has boundless power to examine, at will, the books of virtually any banking institution and require that wide-ranging actions be taken—from raising capital to stopping lending—to ensure the stability and soundness of the bank. Over the past year, the New York Fed has been responsible for committing trillions of dollars of taxpayer money to resuscitate the coffers of the banks it oversees.

Given the power of the N.Y. Fed, it is time to ask some very hard questions about its recent performance. The first question to ask is: Who is the New York Fed? Who exactly has been running the show? Yes, we all know that Tim Geithner was the president and CEO of the N.Y. Fed from 2003 until his ascension as treasury secretary. But who chose him for that position, and to whom did he report? The N.Y. Fed president reports to, and is chosen by, the Fed board of directors.

So who selected Geithner back in 2003? Well, the Fed board created a select committee to pick the CEO. This committee included none other than Hank Greenberg, then the chairman of AIG; John Whitehead, a former chairman of Goldman Sachs; Walter Shipley, a former chairman of Chase Manhattan Bank, now JPMorgan Chase; and Pete Peterson, a former chairman of Lehman Bros. It was not a group of typical depositors worried about the security of their savings accounts but rather one whose interest was in preserving a capital structure and way of doing business that cried out for—but did not receive—harsh examination from the N.Y. Fed.

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http://www.slate.com/id/2217811/

And I could not be happier about that!


Oh, yeah...great article.

or is it only Republicans who get to make come-backs?

do.

I voted for Spitzer and he decided to waste my vote and confidence!

I say, f--k the rightwing critics.

I wish Spitzer would have the gumption to run for Governor again.

That's like something a repugnican would certainly have the gall to do.

Why should he run away? I mean the scandal is embarrassing but it's just a hobby.

Spitzer is a reformer and he'll just use a different medium to accomplish that.

Excellent post!

He busted very many sex workers while he had the chance. To me, visiting a hooker was not that big a deal, but I cannot and will not stand for hypocrisy.

The Federal Reserve had him taken down. They made him a man with nothing to lose so now he is attacking them. I'd stay off even commercial flights if I were him.

Damn, oh well. But may be he should apologize to sex workers.

In any case, he's a valuable asset in the war on greed!

'What we have seen is disastrous groupthink, a way of looking at the world from the perspective of Wall Street and Wall Street alone. That failure has brought the world economy to the edge of unraveling. And some of Geithner's early missteps betrayed an inability to get beyond this tunnel vision, such as the idea that the banks need to be first in line to be paid and to be paid in full.'

After, we Americans are having to make do with what we got. There are no raises for most employees regardless of where they work, no COLA steps upwards for Social Security recipients. Even our children and grandchildren will soon be learning in bigger classes.

May I suggest that we put a top of $100,000 for the income of any employee of any bank or other financial institution operating in the U.S. for three year. I'll bet you that would solve our economic problems right there. After those three years, those banks that don't owe the government any money can pay their management whatever they want. I assure you, the economy would suddenly start looking much better very quickly if you instituted that rule.

:shrug:

:kick:

Nail the bastards.

You blew it as Governor and then we found out you had been sleeping around, which was the final straw.

So shutup and go to Siberia, or Cranberry Lake at least, for your time in exile!

Without it, the post is just stupid.

Spitzer failed as a Governor and THEN was caught paying for sex.

He was barely surviving as Governor and would likely have lost the next election. Not good for less than 1 year in office. Even after his "I'm Sorry" tour of the state.

Spitzer was targeted because he was getting to close to the corruption that finally brought this country to its knees.

from their misdeeds, Spitzer should.

and it is to bad you cannot hold your sanctimonious breath. How many other folks bedrooms do you train that sanctimonious laser beam on.

done in NY?

much to close to the crooks in the power structure; Patterson breaks the criminal law over and over and so what?; Because it is only naked greed and what is the harm in that?

only because right-wing fundies will fall for a phony, "Ah have sinned before yew!" confession. I don't recall Spitzer apologizing for being a hypocrite for busting all those sex workers before he decided to take some solace with them.

IMO, if someone like Spitzer can still make a positive contribution to society, then by all means, PLEASE DO make that positive contribution.

FAR better than sitting on the sidelines, if you have something important to contribute.

and criticize from the sidelines. Elective or appointive office, naw, we have more worthy people to fill those positions with.

It's not like he needs the money from the job. And if he can get people to buy a book, so be it.

effects EVERY American? :crazy:

Everyone has their "taboos" their "secrets" their "weaknesses". In Eliot Spitzer's case, it was sex related and they used and exposed that to shame him and shut him up from exposing the truth about the banking and mortgage industry. Eliot Spitzer knows how to take on the powerful people who run this economy and the banking and financial world and because he is human and has his own personal demons, these very very powerful people tried to take him down.

If I were Eliot Spitzer, I'd come out with guns blazing and defying them all....I'd openly admit to my weaknesses and say it out loud that they tried to destroy him because they knew he was a threat. And he should point blank ask the American people what matters more to them: That he is a human being who made mistakes against his family and that is for him to work on in his life with the family and his own demons, or that he knows information and how to expose the people who have destroyed our economy and the livelihoods and savings of most Americans?

My guess is that while Americans seem obsessed with sexual matters of people, they might be able during these hard economic times to be able to "get over that" and focus on what the big picture is all about.

I say Eliot Spitzer needs to come back stronger than ever and this time without anything that they can get on him, because he's no longer hiding his secrets.

Far worse, and the Obama Administration, FBI and NSA need to start protecting the American people from the truly corrupt, predatory behaviors of the multinational banks.

Fire Geithner, Bernanke, and the rest of the Fed Governors who failed to protect the US from the wholesale looting by AIG, Citi, Cerberus-Gabriel and the other multinationals.

and we know who wanted you out of the way. Just don't get on any small planes.

Spitzer. He is so dangerous to the pols/corps and their malicious, greedy agenda. He may have made an error in judgement as Aristotle would say, but he is a tiger in holding on for what is right in finance world of big and crooked intrigue. He had to go down. Didn't eavesdropping work out well for the big politicians and their corporations?

Can we actually focus on the topic at hand? Using character assassination to devalue any points he is making is something I expect of Republicans. Did he have sex with a hooker while cheating on his wife? Yes. Does that make him a hypocrite when it came to his own crackdown on sex workers? Yes. Does that have a damn thing to do with the article he wrote? No... not at all.

Read what he wrote and consider the fact that aside from his own personal flaws the guy was a pretty damn good AG and was good at busting down corporate corruption (why do you think he was a target of wiretaps to begin with?).

Rp

treasury for that function. But if that happened, there wouldn't be money for the Rothschilds, Rockefellers, etc. ad nauseum.

Does every person in political life have to be a saint or a sinner? If I remember correctly the Republican dirty trickster Roger Stone went after Spitzer's father with no avail before hooker-gate came to the forefront. And let's not forget Roger Stone has a history in that arena. I'm not going to post the February 14th, 2008 editorial Spitzer wrote in the NY Times, but here's a link: http://www.washingtonpost.com/wp-dyn/content/article/2008/02/13/AR2008021302783.html
Let's not forget that article appeared shortly before hooker-gate.
I don't what Spitzer's agenda is here, but when someone as knowledgeable as he writes about the corruption of the Federal Reserve I don't understand how anyone can see this as anything but good.

of someone's private activities displays poor judgment, in my opinion.

I believe the phrase "cutting off your nose to spite your face" could be applied to some people's reaction to Mr. Spitzer's insight.

His ability, or lack thereof, to govern New York state, or his apparent hypocrisy regarding his sexual activities have nothing to do with his knowledge of the N.Y. Fed.

and I can't believe I'm saying that because I am appalled at Spitzer's disregard for his family, hypocrisy, ego, etc.

The more I hear him in the news the more sad I am about the whole situation.