Obama's Geithner-Froman/Citigroup-Kissinger Associates Connection

“Michael Froman ’91 has been named deputy assistant to the president and deputy national security adviser for international economic affairs, a position to be held jointly at the National Security Council and the National Economic Council….A former chief of staff to Treasury Secretary Robert Rubin during the Clinton administration, Froman also served in the Treasury as deputy assistant secretary for Eurasia and the Middle East. He was also director for international economic affairs on the National Economic Council and the National Security Council…. Most recently, Froman was a managing director of Citigroup’s Citi Alternative Investments Institutional Clients Group, where he was head of infrastructure and sustainable development. He also served on 12-member advisory board of the Obama campaign’s transition team.”

--from a Feb. 3, 2009 news item on the Harvard Law School website

“Even more intriguing is Geithner’s informal brain trust, loaded with Wall Street luminaries. Since coming to the Fed in November 2003—recruited by then-New York Fed chairman Pete Peterson, co-founder of the Blackstone Group—Geithner has learned the ways of the financial industry…He was almost immediately taken under the wing of Gerald Corrigan, a…former New York Fed chief who is now a managing director of Goldman Sachs. Corrigan describes his relationship with Geithner as close, and it has flourished since Geithner’s first days at the Fed. Another frequent adviser—`you don’t want those things to get too formal,’ Corrigan notes—is also a preeminent banker, Merrill Lynch C.E.O. John Thain, a Goldman alumnus and former head of the N.Y.S.E.  Over the years, Thain has often talked to Geithner—`sometimes I talk to him multiple times a day’ Thain says. Geithner’s network also includes former Fed chairman Alan Greenspan, an old acquaintance, as well as the heads of the European central banks, hedge fund managers, academics, and his immediate predecessor, William McDonough, architect of the 1998 Long-Term Capital Management bailout and now a vice chairman of Merrill."

--from Gary Weiss’s May 12, 2008 Upstart Business Journal article

"...Geithner was born in Brooklyn in 1961, and grew up in a series of far-flung, exotic locales…Hhis father, Peter Geithner, joined the United States Agency for International Development and moved his family…to Salisbury, Rhodesia. Peter Geithner came from Columbian Carbon International, a Fortune 500 conglomerate…,In 1968, Peter Geithner accepted a position with the Ford Foundation and the family moved…to New Delhi...After graduate school, his father had deferred going into government to gain private-sector experience; so did the son, landing a job in 1985 at Kissinger Associates, the consulting firm founded by Henry Kissinger, Brent Scowcroft, and Lawrence Eagleburger.
“…This was a stroke of almost unimaginable good fortune. It did not come by chance. Scowcroft had called the dean at Johns Hopkins and asked him to recommend an Asia specialist; he recommended Geithner… Kissinger took note of his young charge. Geithner was asked to write a series of longer papers, not for the firm but for Kissinger personally…Although Geithner moved on to the government after three years, Kissinger remains an enthusiastic backer…."

--from an April 2010 article in The Atlantic magazine

Obama’s Geithner-Froman/Citigroup-Kissinger Associates Historical Connection

Not much change in either the high U.S. unemployment rate or the special influence of white Wall Street bankers over U.S. government policy was produced by the Democratic Obama Administration between 2009 and 2012.

One reason might be because a white Citigroup managing director named Michael Froman—apparently one of Barack Obama’s close friends at Harvard Law School—successfully pushed Obama to appoint a white former Federal Reserve Bank of New York president and Kissinger Associates executive named Timothy Geithner to be the Obama Administration’s Secretary of the Treasury between 2009 and 2012. As Newsweek magazine columnist Jonathan Alter recalled in his 2010 book The Promise: President Obama, Year One:

“

Obama…knew that as president of the New York Fed, Tim Geithner was right at the center of the bailout action, consulting closely with [George W. Bush’s Secretary of the Treasury] Paulson…Obama and Geithner had met for the first time during the fall campaign [in 2008], in a secret meeting at the W Hotel in New York…Like Obama, Geithner had grown up abroad in Zimbabwe, Zambia, India and Thailand…During the early 1980s, Geithner’s father, Peter Geithner, oversaw the Ford Foundation’s micro-credit program and had…met once with one of its Indonesian program officers, S. Ann Dunham-Ssotero, Obama’s mother…Trained well by his years under Henry Kissinger in the consulting business, Geithner played hard-to-get…

“…Michael Froman, a…Citi banker and one of the transition chiefs, was pushing hard for his old friend Geithner. Froman had become close friends with Obama at Harvard Law School…Obama bonded with Geithner personally…Geithner gave what critics called `backdoor bailouts’ of tens of billions to some of the wealthiest financial institutions in the world…

“…[Center for American Progress CEO and Obama Transition Co-Chief John] Podesta, a major link to the Clintons, favored Geithner…Even after the vetters discovered disturbing tax problems on Geithner’s record—problems that would cause Obama considerable embarrassment six weeks later…he [Obama] stuck with his choice…Obama…lobbied a huge bank rescue bill through Congress…His advisors rejected WPA-style direct government hiring…Government jobs would have attacked unemployment immediately. (In 1934 FDR and his relief administrator, Harry Hopkins, created 4 million jobs in two months…The failure to think more boldly about creating jobs fast would haunt the administration…The Obama advisors figured that as long as unemployment stayed under 10 percent for the year, they could slide through…

“…Obama worked the phones…Tim Geithner made the rounds of the Senate Democrats and told them he had made mistakes…while still in his job as head of the New York Fed…The second bailout was approved…5 days before the Inauguration [in 2009]…Even before becoming president, Obama was drawing from his political capital to win approval for Bush’s bailouts…

“…Geithner paid only what he owed [in taxes] for the years that he was audited, 2003 and 2004. He had also worked as a consultant in 2001 and 2002 and knew perfectly well that he owed back taxes for those years too…”

So don’t expect the second term of a Democratic Obama Administration to be anymore successful in producing a change in in either the high U.S. unemployment rate or the special influence of white Wall Street bankers over U.S. government policy between 2013 and 2017 than it was between 2009 and 2012.