The calendar kept by Treasury Secretary Tim Geithner shows he talked to the biggest names in banking at least 80 in his first seven months in office, a review by the Associated Press reveals.
First he called Lloyd Blankfein, the chairman and CEO at Goldman. Then he called Jamie Dimon, the boss at JPMorgan. [President] Obama called next, and as soon as they hung up, Geithner was back on the phone with Dimon.
While all this was going on, Geithner got a call from Rep. Xavier Becerra, a California Democrat who serves on committees that help set tax and budget policies.
A Treasury spokesperson says it's appropriate for the secretary to stay in touch with the banks, especially in the middle of a banking crisis.
Simon Johnson has a slightly different take, questioning how Geithner could have gotten "an accurate picture of conditions in the entire crisis-ridden financial sector primarily from talking to a few top bankers?" Johnson writes:
Geithner's phone calls were primarily to and from people he knew well already — who had cultivated a relationship with him over the years, shared nonprofit board memberships, and participated in the same social activities. These are close professional colleagues and in some cases, presumably, friends.
The Obama administration had to rescue large parts of the financial sector, given the situation they inherited. But it absolutely did not have to run the rescue in this exact fashion — bending over backwards to be nice to leading bankers and allowing their banks to become even larger. Saving top executives' jobs under such circumstances is not best practice, it's not what the US advises to other countries, it's not what the US tells the IMF to implement when it helps clean up failed banking systems, and it's not what the FDIC implements for failed banks under its auspices.