PRESS RELEASE
Congress Attacks Geithner
For Role in AIG Bailout
Jan. 27, 2010 (EIRNS)—At an outraged hearing of Rep. Edolphus Towns' (D-N.Y.) House Government Oversight Committee Jan. 27, neither Treasury Secretary Timothy Geithner, nor former Secretary Hank Paulson, nor New York Federal Reserve Board chairman Charles Friedman, nor New York Fed general counsel Thomas Baxter, would acknowledge having had anything to with the fatal decision to carry out history's biggest bailout, or knowing anything about how the decision was made. That decision, in the Fall 2008, to pour, ultimately, $200 billion in taxpayers' money into AIG insurance's holding company, was a huge "back-door bailout" to international investment banks led by Goldman Sachs. All of the above have in common very close connections to Goldman Sachs, and, along with useful-idiot Presidents George W. Bush and Barack Obama, they pushed the criminal bailout through. It triggered the beginnings of political mass strike by the angry American people, which is still growing today.
The worked-up Geithner lied blatantly throughout the hearing, and added a lot of tinder to the growing "fire Geithner" blaze. During and after the hearing, three members of the Committee demanded Geithner's resignation: John Mica (R-Fla.), Stephen Lynch (D-Mass.), and Patrick McHenry (R-N.C.). Rep. John Duncan (R-Tenn.) warned Geithner, "You know, Mr. Secretary, the American people are very, very angry about what was done to bail out these banks." But despite directing their fury at Geithner about the now-exposed consequences of that bailout—in particular, the American people's ire against them—many members of this committee agreed to the bailout then, and still now repeat the big lie that it was necessary.
Lyndon LaRouche, then and now, was the one leading voice clearly denouncing it.
Geithner's idiotic testimony, under oath, that he knew nothing about the bailout of the banks' worthless derivatives contracts through AIG, although he was then president of the New York Fed, which carried out that bailout, infuriated the entire committee. His attempt to foist responsibility onto a subordinate, New York Fed vice-president Christine Cummings, was despicable. The government's special inspector-general for the TARP bailout program, Neil Barofsky, later testified that Geithner personally made the immediate early-November 2008 decision to pay the banks full face "value" for toxic derivatives and collateralized debt securities to the tune of $62 billion.
Lynch shouted at Geithner for several minutes:
The conduct of yourself and Secretary Paulson was consistently not on the side of the American people. If you could let Lehman go bankrupt, why did AIG have to be bailed out? You had every opportunity to make the banks take a haircut. This stinks to high heaven! The commitment to Goldman Sachs trumped your responsibility to the American people.
