Unveiling?

This BBC headline caught my eye - Obama 'to unveil Treasury chief' - because we already knew Geithner would get the job. What is being 'unveiled' is something we already know. Only a media obsessed with a dialectic of 'uncovering the truth', with all the pomp and dramatics that naturally follow, would use such a term for something they'd mostly reported on at least two days ago.

That rhetorical point aside, who is Geithner? Well, he's head of the Fed. Head of the Federal Reserve Bank of New York, which is the controlling bank in the Federal Reserve system, that is. The same New York Fed that loaned money to AIG? The same. The deal was that the NYF gets a 79.95% share in the company in exchange for a loan of up to $85 billion. Pretty sweet deal if you're the New York Fed, loaning 85 billion dollars, backed by nothing, in exchange for a near 80% share of a company at one stage valued at over $1 trillion.

Where was Geithner before he was head of the New York Fed? Well, he worked for Kissinger and Associates in Washington. Yes, that Kissinger. Then he worked for the treasury department, earning his governmental stripes, and becoming a 'crisis manager'.

Before the current crisis, he was involved in the bailouts of Mexico, Indonesia, Korea, Brazil and Thailand. - NY Times

He left to join the Council on Foreign Relations, and the IMF. After only two years he is made president and CEO of the New York Fed.

Timothy F. Geithner became the ninth president and chief executive officer of the Federal Reserve Bank of New York on November 17, 2003. In that capacity, he serves as the vice chairman and a permanent member of the Federal Open Market Committee, the group responsible for formulating the nation's monetary policy. - website of the New York Fed

So, he's very much a member of the club. If I didn't know better, I'd say he's been schooled as a kind of economic hitman, but one used domestically, rather than in the international role John Perkins describes. It would not surprise me one bit if he eventually becomes president of the World Bank.

So he's been in this role for five years, through the run up to the present 'economic crisis'. As his biography notes, he is a permanent member (vice president) of the FOMC, who formulate monetary policy. So he's a senior and permanent member of the group who expand and contract the money supply, generating booms and busts. He was intimately involved in the particulars of the Wall Street banks throughout the recent economic troubles.

Mr. Geithner was involved in most of the fateful decisions of the last year, including the move to rescue Bear Stearns and American International Group and the decision to let Lehman Brothers collapse. - NY Times

Indeed, the Washington Post ran a headline yesterday describing him as 'schooled in crisis'. They like this word, 'crisis'. I think an economic crisis is when hardly anyone can get clean water, buy food, buy some means of traveling for work, afford basic medicines. A few banks going bust is in most respects neither here nor there.

But the three decisions cited by the New York Times are significant. AIG are now a financial asset of the New York Fed, itself a conglomerate of private banks owned by a tiny group of people. Bear Stearns were rescued from bankruptcy and then sold to Morgan Chase, owned by the Rockefellers. Lehman was allowed to collapse and the scraps were bought up for peanuts by Barclays, owned by the Rothschilds.

In the first deal, the Federal Reserve kept the bank going with an emergency loan just long enough so that they had no choice but to accept the $2 a share offer from JP Morgan Chase, which valued the bank at just $240 million. To give you a sense of how potentially profitable this deal could prove for the Rockefellers, as part of the deal the Federal Reserve agreed to underwrite up to $30 billion of Bear Stearns' assets, valued at over 140 billion before the credit crunch set in. Indeed, the property alone must be worth many times what JP Morgan Chase paid, given that the head office tower alone is estimated to be worth well over a billion.

In the second deal, Lehman went to the wall and Barclays, owned by the Rothschilds and chaired by a man married to a Rothschild, got $72 billion worth of business for just $1.75 billion.

After subtracting the $1.5billion Barclays will pay for Lehman's New York headquarters building and two data centers, the British bank is paying just $250million for the business and its trading assets of $72billion and liabilities of $68billion.

By comparison, the company's entire stock-market value in early 2007 was $45billion. - Daily Mail

NM Rothschild of London also acted as an adviser in the sale of Lehman's Asian assets, which eventually went to Nomura, and an adviser to British PM Gordon Brown on his bailout plans. So it appears Geithner has aided two of the world's richest and most powerful families in manufacturing this crunch so they could buy up competitors for a fraction of their worth. It wouldn't be the first time. Nathan Rothschild financed both sides of the Napoleonic War, and when he received early news of the English victory he engineered a market crash to lower the value of target stock and then secretly bought it just before the news became public. These days, bankers of that lineage use agents of influence to do their dirty work, and Geitner has all the hallmarks.

Just in case you're not convinced there's something very fishy about the man who is going to be handed the most important governmental position in the US economy consider the following - he was mentored by Lawrence Summers, who authored a memo while Chief Economist at the World Bank, in December 1991:

DATE: December 12, 1991
TO: Distribution
FR: Lawrence H. Summers
Subject: GEP

'Dirty' Industries: Just between you and me, shouldn't the World Bank be encouraging MORE migration of the dirty industries to the LDCs [Less Developed Countries]? I can think of three reasons:

1) The measurements of the costs of health impairing pollution depends on the foregone earnings from increased morbidity and mortality. From this point of view a given amount of health impairing pollution should be done in the country with the lowest cost, which will be the country with the lowest wages. I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that.

2) The costs of pollution are likely to be non-linear as the initial increments of pollution probably have very low cost. I've always though that under-populated countries in Africa are vastly UNDER-polluted, their air quality is probably vastly inefficiently low compared to Los Angeles or Mexico City. Only the lamentable facts that so much pollution is generated by non-tradable industries (transport, electrical generation) and that the unit transport costs of solid waste are so high prevent world welfare enhancing trade in air pollution and waste.

3) The demand for a clean environment for aesthetic and health reasons is likely to have very high income elasticity. The concern over an agent that causes a one in a million change in the odds of prostrate cancer is obviously going to be much higher in a country where people survive to get prostrate cancer than in a country where under 5 mortality is is 200 per thousand. Also, much of the concern over industrial atmosphere discharge is about visibility impairing particulates. These discharges may have very little direct health impact. Clearly trade in goods that embody aesthetic pollution concerns could be welfare enhancing. While production is mobile the consumption of pretty air is a non-tradable.

The problem with the arguments against all of these proposals for more pollution in LDCs (intrinsic rights to certain goods, moral reasons, social concerns, lack of adequate markets, etc.) could be turned around and used more or less effectively against every Bank proposal for liberalization. - memo