Geithner’s Other AIG Rescue

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Via Daniel Indiviglio at The Atlantic, a report by Bloomberg turns up some grisly facts about Treasury Secretary Tim Geithner’s tenure at his former employer, the New York Fed—namely, how the New York Fed told AIG to keep mum about its swaps deals with other banks that would benefit if AIG got bailed out.

According to emails obtained by Rep. Darrell Issa (R-Calif.), the New York Fed cut from a draft of an AIG regulatory filing mention that banks like Goldman Sachs and Societe Generale had swaps agreements with AIG and would benefit from AIG’s rescue via a “backdoor bailout”—a troubling omission at a time when AIG’s fate was up in the air and full disclosure was critical. Bloomberg quotes Issa as saying, “It appears that the New York Fed deliberately pressured AIG to restrict and delay the disclosure of important information.” Taxpayers, he added, “deserve full and complete disclosure under our nation’s securities laws, not the withholding of politically inconvenient information.”

Indiviglio uses the latest revelation in the AIG counterparty saga to not only insist that the overly opaque Fed doesn’t deserve any more authority (as I did yesterday), but to even question Geithner’s position as Treasury Secretary. Without a doubt, that Geithner’s New York Fed tried to cover up AIG’s exposure is embarassing at the very least; it’s also more broadly indicative of the Fed’s belief that it can get away with almost anything behind closed doors. Is that the kind of regulator, as some have proposed, that should be tasked with overseeing financial institutions and markets?

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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