It was quietly announced yesterday that
Geithner will become President of Warburg-Pincus, the country's fifth largest private equity firm—similar to Bain Capital, the ninth
largest private equity firm, formerly headed by Mitt Romney. These
are the vulture capitalists that buy up troubled companies and either
close them and sell off their assets, or attempt to revive them by
seeking loans and imposing austerity measures, then selling them at a
profit. Either way, layoffs are an almost certain result. Economist Robert Reich explains how private equity firms work.
Geithner takes his place behind
previous Treasury Secretaries like Robert Rubin and John Snow, who,
after accepting several years of poverty-level wages in “public
service,” walked through the revolving door between business and
government to cash in for all the favors they had done for Wall
Street while they were in office.
As Treasury Secretary, Geithner supervised the Troubled Asset Relief Fund, aka, the bank bailout,
which ensured that banks and investment firms made huge profits
following the 2008 recession, even as the rest of the country lost
money. Here's future Senator Elizabeth Warren in 2009 quizzing him about
where the money went.
Geithner is known for
institutionalizing the idea that some banks are too big to fail, and
in fact, the financial sector is more concentrated now than it was
before the recession. He is also credited with ensuring that there
would be no meaningful reregulation of the financial sector—for
example, no separation between commercial and investment banking, and
no meaningful changes in the trading of derivatives—thereby
making it likely that we will have another recession before long.
Geithner had previously stated that he was “extremely unlikely” to take a job in the private finance industry. Maybe he didn't realize how grateful the 1% would be for
the services he had rendered.
You may also be interested in reading:
No comments:
Post a Comment
Comments are always welcome.