WASHINGTON — Democrats and Republicans alike pummeled Treasury Secretary Timothy Geithner on Wednesday over his role in the $180 billion bailout of insurance giant AIG, venting public anger over Wall Street’s return to prosperity while unemployment stands at 10 percent.
Geithner, one of the architects of the government’s 2008 response to the financial crisis as president of the Federal Reserve Bank of New York, defended it as necessary to head off “potentially catastrophic damage to the economy.” But members of the House Committee on Oversight and Government Reform hammered away at why regulators allowed AIG to pass on billions of the bailout money to big Wall Street and international banks that were business partners.
“In effect, the taxpayers were propping up the hollow shells of AIG by stuffing it with money. And the rest of Wall Street came by and looted the corpse,” committee chairman Edolphus Towns, D-N.Y., told Geithner.
Geithner got no cover from committee Democrats. Rep. Marcy Kaptur, D-Ohio, suggested Geithner was more beholden to banking interests than to taxpayers at the New York Fed and said Geithner’s performance showed that “he shouldn’t have been appointed in the first place.” The Associated Press
