TIM GEITHNER'S WALL STREET DAYS.

The New York Times has a front-pager on Tim Geithner's schedule back when he was heading the New York Federal Reserve. What we learn is that Geithner spent a lot of time hanging out with bank presidents. He was even a candidate to helm Citibank (Geithner apparently had no interest in the job). As always, it's a bit hard to know what to think of all this. It raises the specter of capture, but on the other hand, Nouriel Roubini is a fan of Geithner's more recent announcements, and so it's not obvious that less compromised candidates would actually be doing anything different. I have trouble imagining that Rahm Emmanuel is ready to nationalize the banks.

In some ways, this seems more like a commentary on what's wrong with the Federal Reserve than on what's wrong with the Treasury Department. At Treasury, Geithner is subject to all manner of forces outside his control and all manner of actors with differing incentive structures and constituent demands. But the Fed is politically insulated. It's apart from all that. So it's a bit worrying that it's New York director chooses to be very close to the individuals he's meant to be regulating. The end result is an institution unconcerned with voters and mechanisms of democratic accountability, but pretty concerned with how bank chiefs feel about things, and pretty sympathetic to the explanations they give for their practices. Sometimes independence from one constituency just enables capture from another.

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