Tim Geithner Is Mad as Hell and Isn't Going to Take It Anymore

While these comments were notably terse, it's not unusual for politicians to take shots at a Treasury Secretary or Fed Chairman in order to score points with their constituents. It's a key part of the "dog and pony show."

What is unusual is for a sitting Secretary or Chairman to return the favor, as Geithner did yesterday, telling Brady: "What I can't take responsibility is for the legacy of the crises you've bequeathed this country."

There's obviously a "we inherited a disaster" mentality in the Obama administration and maybe this was just partisan politics and another example of how civility is in ever-decreasing supply in Washington. Or maybe Geithner is getting tired of the criticism and thinking about moving to the private sector sooner vs. later, as Henry Blodget writes.

The other issue here is why Geithner is getting such heat now when the economy is on firmer footing and the crisis seems to have passed. Some possibilities:

• AIG Outrage: The past few weeks have brought more revelations about the backdoor negotiations last fall among regulators, AIG and its creditors. As Bloomberg first reported, AIG had negotiated haircuts with its creditors but ended up paying 100% of its obligations to Goldman and other banks after the NY Fed entered the discussion. Geithner was President of the NY Fed during that period and these reports have given new life to complaints that he's too cozy with Wall Street.
• Populism Rising: While Wall Street is enjoying a year of record profits (and bonuses), Main Street America continues to suffer amid rising unemployment and foreclosures. Many Americans are fed up with government policies that seem to only enrich the "fat cats" and their elected officials are delivering the message. On a related note, the Congressional Black Caucus blocked a House vote on financial reform Thursday because its members feel there's been too much focus on Wall Street and not enough on Main Street, The WSJ reports.
• It's the Election, Stupid: Every day we get closer to the 2010 mid-term elections, and many incumbents are rightfully fearful of being booted. That will lead to more grandstanding and maybe even some pushback against the very powerful financial services lobby as politicians reflect the anger of their constituents (see above).