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Spitzer V. Geithner

Eliot Spitzer returns to his role of Wall Street scourge with this Slate column about AIG, but his real target, it seems, is Tim Geithner:

Here are several questions that should be answered, in public, under oath, to clear the air:

What was the precise conversation among Bernanke, Geithner, Paulson, and Blankfein that preceded the initial $80 billion grant?

Was it already known who the counterparties were and what the exposure was for each of the counterparties?

What did Goldman, and all the other counterparties, know about AIG's financial condition at the time they executed the swaps or other contracts? Had they done adequate due diligence to see whether they were buying real protection? And why shouldn't they bear a percentage of the risk of failure of their own counterparty?

What is the deeper relationship between Goldman and AIG? Didn't they almost merge a few years ago but did not because Goldman couldn't get its arms around the black box that is AIG? If that is true, why should Goldman get bailed out? After all, they should have known as well as anybody that a big part of AIG's business model was not to pay on insurance it had issued.

Why weren't the counterparties immediately and fully disclosed?

Failure to answer these questions will feed the populist rage that is metastasizing very quickly. And it will raise basic questions about the competence of those who are supposedly guiding this economic policy.

Spitzer has never been much of a fan of Geithner's, telling Vanity Fair back in December:

Tim is a good guy, but he’s not a thinker. He’s the status quo.

Spitzer is obviously not the Democratic Party heavyweight he once was ("It sucks," he's said of his life as a mere Slate columnist, "I used to be the governor of New York"). But it'll be interesting to see if any other prominent Dems follow his lead on this.

--Jason Zengerle