THE PLANK JANUARY 28, 2009
I come not to praise Tim Geithner, but ... It's still too early to say he's changed the tone of the D.C.-Wall Street relationship. However--a few days ago Citigroup announced that, despite its multiple bailouts from the federal government, it was going ahead with plans to buy a $50 million corporate jet. That's a lot of coin, even for a corporate jet, and it was a clear challenge to Geithner's Treasury. Former Secretary Paulson and his staff would have waited to read the public response; if the media had splashed the news on Page 1, they might have acted. Otherwise, Paulson was willing to let boys be boys.
So it's heartening that, well before the luxury plane became the latest scandal du jour, Geithner and Obama brought the smackdown; Treasury made some well-placed calls, and Robert Gibbs told reporters that the White House "does not believe that is the best use of money at this point. That money should be used to lend to consumers." The result? A day after Citi had brashly said it was going ahead with the purchase, it released a new, short statement: "We have no intent to take delivery of any new aircraft."
Like I said, this could mean nothing. Words are cheap, and devils will lurk in the details of any new federal rules about bank lending. But it could also be the first big sign that the new sheriff means business.