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i really don't have any issues with your diary. I'm just reacting to the way in which the Geithner rumor, which seems to me to be most likely an effort by EU/Ireland to blame the bogeyman,  has taken off and not just here.

http://www.irishcentral.com/story/roots/the_american_in_ireland/tim-geithner-helped-sink-ireland-121 510004.html

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x1059150

http://alethonews.wordpress.com/2011/05/09/geithner-scuppered-imf-plan-to-impose-haircut-on-irish-de bt/

just google "geithner ireland"

by rootless2 on Tue May 10th, 2011 at 10:11:01 AM EST
[ Parent ]
I'm not familiar with any of the sites you cite - are the US based?  I am amazed that an opinion piece by a hitherto marginal and reviled Irish academic has resonated so much elsewhere - the Geithner reference is tangential to Morgan Kelly's main targets - Honahan, slight dim former rugby players running Irish banks, the ECB, and the Irish Government.

I suspect the Geithner reference is playing into some pre-existing anti-Geithner sentiment on the US left and also a pressure point for Irish Americans on the Obama administration.  But from an Irish perspective the main bogeymen are the Irish Government, regulator, central bank, structural flaws in the design and implementation of the Euro, ECB and German nationalism.  

The US administration, for once, is a marginal player, but one which I think could be a positive player since it is less austerity fixated and much less hidebound in its dealings with banks than Germany.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue May 10th, 2011 at 10:28:53 AM EST
[ Parent ]
Yves-Smith and similar have fixed on Geithner as the bad guy. It's weird.

I think the reemergence of German nationalism is very dangerous.
 

by rootless2 on Tue May 10th, 2011 at 10:37:07 AM EST
[ Parent ]
Never heard of Yves-Smith before, but have just read his/her? critique of the very limited Treasury denial of Geithner's role.  It seems an entirely reasonable critique given the denial didn't deal with the point Morgan Kelly made.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue May 10th, 2011 at 10:51:54 AM EST
[ Parent ]
Kelly's claim

The deal was torpedoed from an unexpected direction. At a conference call with the G7 finance ministers, the haircut was vetoed by US treasury secretary Timothy Geithner who, as his payment of $13 billion from government-owned AIG to Goldman Sachs showed, believes that bankers take priority over taxpayers.

Treasury denial (as reported)

Last night, a senior US official said this report was "inaccurate".

The official pointed out the ECB and the European Commission (EC) did not want to impose haircuts on bondholders who loaned money to Irish banks.

"The ECB and EC were both dead opposed and they are decisive. The US is not a decision maker on European issues," the official said

The Yves Smith take:

Ahem. Notice the statement. It does not say that Geithner was against the restructuring, merely that his opposition made no difference.

But this finesses what Kelly discussed, which is that Geithner effectively undercut the IMF

And that's just gibberish. Kelly alleges that US "torpedoed" the rescue plan, the US says the obvious - that it didn't torpedo anything because the ECB is calling the shots and the ECB is protecting the bondholders. The key claim of Kelly is "torpedoed" and that's exactly what Treasury addresses. So what we have is a Kelly claim of "torpedoed" that is (a) unsubstantiated (b) denied and (c) based on a clearly false theory that the US is calling the shots. When you add that to the other problems with Kelly's argument (he even gets the total of treasury payments to GS wrong by a factor of 2 1/2)  Smith's silly "ahem" just reduces to "but the script has Tim as the bad guy".

There are plenty of reasons to object to US treasury policies from a left wing point of view, but neither Yves Smiths "timmy is evil" cartoon or Kelly's apparent water carrying for the ECB comes close.

by rootless2 on Tue May 10th, 2011 at 11:31:12 AM EST
[ Parent ]
The IMF are providing a separate loan to Ireland (at a lower interest rate) and would have needed ECB agreement to any haircut plan.  Whether the ECB would have agreed to that under any circumstances became moot once Geithner vetoed the IMF proposal.

The idea that Kelly carries any water whatsoever for the ECB is just plain ridiculous, given the only water he wants to give the ECB is ownership of the Irish banks in return for the 150 Billion the banks owe the ECB.

Some water carrying.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue May 10th, 2011 at 12:31:08 PM EST
[ Parent ]
"Whether the ECB would have agreed to that under any circumstances became moot once Geithner vetoed the IMF proposal."

But we only have one unsubstantiated and denied allegation that Geithner vetoed anything. And that allegation is surrounded by checkable inaccuracies.

Whether Kelly is telling the truth, making it up, or carrying someone else's excuse is impossible to tell. What's easy to tell is who benefits: the Germans, the UK and the Irish government all of whom have a convenient scapegoat.

Obama blocked IMF deal to haircut Irish debt. Boycott Obama's speech in O'Connell St - pass the word around

http://www.politicalworld.org/showthread.php?t=8075

And this at a time when the US and Germany are actually in a known dispute

On a more fundamental level, however, Washington is concerned that, should Europe overreach in its rush to cut government spending, it could endanger the fragile economic recovery that has taken hold on the Continent and around the globe. In particular, the US would like to see countries like Germany and France continue efforts to stimulate their economies.

http://www.spiegel.de/international/business/0,1518,697132,00.html

And the US policy has been, for a while to oppose Euro austerity

"In a letter to G20 leaders last week, US President Barack Obama warned against cutting national debts too quickly, arguing it would put economic recovery at risk"
http://www.bbc.co.uk/news/10411167

So the claim is that in contrast to clear US policy, the US treasury department is forcing massive austerity on Ireland and backing up the bond hawks. I guess it is possible, but to me it seems more likely to be disinformation designed to focus popular discontent on an easy target.

by rootless2 on Tue May 10th, 2011 at 12:59:06 PM EST
[ Parent ]
  1. Geithner is not an important part of this story from a European perspective.  Everyone knows the ECB is opposed to all haircuts.  No one here is blaming Geithner for this. At most he undercut IMF efforts to negotiate a slightly more enlightened policy.

  2. I have already argued above that I see the US and the Obama administration as a potential ally against excessive German/ECB inspired austerity policies.

  3. You seem to be trying to overlay a US left/right debate around Geithner on a European discussion of Austerity policies, German ECB obsession with protecting Bondholders, and structural deficiencies in the design of the ECB and Eurozone.

  4. Please stop buttressing your argument with websites I have never heard of making points no one here has ever made. Your argument is with other people!


Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue May 10th, 2011 at 01:18:40 PM EST
[ Parent ]
"No one here is blaming Geithner for this"

Kelly certainly is. And the websites show that he is not the only one in Ireland.

by rootless2 on Tue May 10th, 2011 at 01:28:51 PM EST
[ Parent ]
The fact is, ARGeezer did bring up Yves Smith's angle on the Morgan Kelly piece. Where in your excerpting you ignored the G7/IMF conference call episode, Yves Smith focuses on that. There's also the "Geithner and DSK" diary.

Economics is politics by other means
by Carrie (migeru at eurotrib dot com) on Tue May 10th, 2011 at 01:39:17 PM EST
[ Parent ]

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