So what would be the reasons “they” want Bair to step down? There has got to be something behind that besides “an old boy network.”

The reasons were stated in the story above: 1. Bair is extremely independent, as she should be. Geithner forgets that FDIC doesn’t report to the Federal Reserve or to the White House. The idea of having someone that independent and influential not singing the same tune as everybody else makes him nervous. Geithner is one of the big Banker Boyz so he’s mad because Bair won’t “play ball” and let them give away all the money to the bankers without conditions. 2. Trying to push her out is a political risk because she is respected by lawmakers including Barney Frank and Chris Dodd. 3. Obama’s commitment is questionable. Bloomberg’s story included a “no comment” from the transition but notes, “Even if Bair remains at the FDIC, the Obama economic team has decided that she won’t play a central role in policy, the people said.” Bad move. What does that say about Obama when he keeps Robert Gates and tries to boot Sheila Bair? If nothing else, it should question his commitment to re-regulation.

Where are you getting this information? Geithner is “mad because Bair won’t play ball”? According to what I have read Geithner is someone who, with his experience fighting financial crises and regulating markets, has been effectively training for his new job for more than a decade. Furthermore, Geithner combines a sense of continunity with the prospect of decisive change. He’s an advocate of free markets, but he has also called for tighter regulation. As a Rubin disciple, he believes in fiscal responsibility, but also supports a major stimulus package. Bair seems to be on the same page. Your number one above states that she makes Geithner “nervous”, ––––do you know that? How? And I have not read anything or heard anyone say that Obama is trying to “boot” Bair. Could you give us your sources?

Hi, Phyllis, thanks for your comments and let me give you some more links to read about this topic. There’s fairly universal agreement that Sheila Bair has been a rock star in defending Main Street versus Wall Street in the bailouts…and has been very tough in dealing with the banks. Even the Democrats in Congress love her, and she’s a Republican. And because of her hewing more to the interests of the consumer than the banks, she’s made some enemies among the PTB among the Masters of Universe on Wall Street. And there’s no bigger Wall Street player than the New York Fed, where Geithner has been the Chairman. If Obama wants to keep a woman around who has fearlessly told truth to power, Sheila certainly falls into that category. From Atlanta Journal Constitution http://www.ajc.com/blogs/content/shared-blogs/ajc/bookman/entries/2008/1… Jim Cramer on Blogginstocks http://www.bloggingstocks.com/2008/12/04/cramer-on-bloggingstocks-we-nee… Wonkette http://wonkette.com/404728/catfight-geithner-doesnt-like-bair

I guess it is time to start sendin BO some emails supporting her—-and insisting he support her too…..after all—-he WANTS people who do not agree with him all the time…..right? She is, apparently, EXACTLY what he said he wanted working for him….do you think maybe BO is not aware of the ‘boyz club’ shenanigans?

i have heard nothing but good things about her and her plan to rescue many mortgages. like phyllis, i doubt that the author of this article knows what is going on.

here is a complete comment from huffington post: Here’s the backstory and it concerns infighting between Geithner and Bair: http://www.bloomberg.com/apps/news?pid=washingtonstory&sid=aTFflUwD.Qbg Timothy Geithner, President-elect Barack Obama”s choice for U.S. Treasury Secretary, is seeking to push Federal Deposit Insurance Corp. Chairman Sheila Bair out of office. Geithner, president of the Federal Reserve Bank of New York, has argued Bair isn”t a team player and is too focused on protecting her agency rather than the financial system as a whole, according to two congressional officials and a person familiar with his thinking. Bair has battled with Geithner and fellow regulators over aid to Citigroup Inc. and other emergency actions, making her enemies in the Bush administration. Bair, who was appointed by President George W. Bush to a term as chairman that ends in 2011, has been lobbying behind the scenes for a stepped-up role in the Obama administration. Frank, a Massachusetts Democrat, has suggested that she be named to a special post to oversee government-wide programs to stop foreclosures.

I would, however, like to clear something up. Mary Lou says, “like Phyllis, I doubt whether the author of this article knows what’s going on.” My questions were not to Deborah, but to Corrine. From what I have now learned, Deborah knew exactly what she was writing about. If there was some misunderstanding about this, Ms Barrows, I apologize.

Bair’s a Republican, not an Independent, please. She ran for Congress as a Republican in 1990. Whether that should preclude her from keeping a job she’s held for two years, I don’t know. Certainly, she can’t be blamed for this country’s economic woes, even though Forbes this year ranked her the second-most powerful woman in the world.

http://www.washingtonpost.com/wp-dyn/content/article/2008/11/22/AR200811… As always, things are never as simple as they appear on the surface.

I’m sorry, I just came across this article randomly, but the article is so wildly mistaken about the subject of Geithner and Bair’s dispute that I feel like I need to set the record straight. I work in finance (I guess you could say on Wall Street, though no once really works ON Wall Street anymore), so I have a pretty good understanding of their dispute. Contrary to what Ms. Barrow claims, Geithner DOES NOT want to force Bair out because she favors more aid for Main Street. That assertion is simply false. Nowhere does the Bloomberg article say that Geithner opposes more aid for Main Street, or that Bair’s perceived pro-Main Street stance is the source of their dispute. Ms. Barrow’s logic seems to be: “Geithner doesn’t like Bair; Bair wants more aid for Main Street; therefore, Geithner must want to oust Bair because she wants more aid for Main Street.” There’s a reason this logic is faulty, and it’s that the conclusion Ms. Barrow draws is false. Now, here’s the REAL reason Geithner wants to oust Bair: she has made 2 monumental blunders during the crisis, and she has proven herself to be an incredibly reckless and short-sighted regulator. Bair’s first blunder was by far her worst. Her handling of WaMu was one of the most disastrous government actions I’ve ever seen (second only to Hank Paulson’s decision to completely scrap the original TARP plan to buy troubled assets virtually on a whim). The FDIC’s job is to seize failed banks and reorganize them. Bair, however, seized WaMu not because it had failed and needed FDIC protection to avoid losses for its depositors, but because JPMorgan was offering to buy WaMu if the FDIC would agree to seize WaMu and then immediately sell it to them. (Sweet deal for JPMorgan!) That’s not the FDIC’s job. Bair’s erratic decision to seize WaMu completely pulled the rug out from under senior bondholders, and effectively guaranteed that no investor would lend to a bank anywhere in the vicinity of failing — lest the reckless Ms. Bair unexpectedly show up and wipe the investor out. Why do you think Citi was losing lenders even though the government had already said it wouldn’t let Citi fail? A lot of investors were scared that Bair would show up out of nowhere and seize Citi for no reason. She was a disaster. Second, the Wachovia/Citi/Wells Fargo debacle was largely her fault. The Citi deal that she pushed unnecessarily put a lot of taxpayer money at risk when a simple regulatory change was all that was needed to get a deal that put no taxpayer money at risk. Again she didn’t consult with the Fed or Treasury before blessing the Citi deal, which she then reneged on once Wells Fargo entered the picture. After that horrendous performance, the FDIC lost literally all its credibility as an honest broker. Those are the main reasons Geithner wants to oust Bair. We badly need coordination among regulatory agencies right now, and Bair seems fundamentally incapable of even consulting with other agencies, let alone coordinating with them. But despite Bair’s epically bad performance, she’s managed to become a hero to many Democrats, simply by publicly calling for more mortgage modification efforts. Democrats like to praise Bair for calling for tighter mortgage regulations in the summer of 2007, but it’s important to remember that the housing bubble burst in the spring of 2007. She was in no way prescient about the housing bubble; in fact, she was 4 years too late in calling for tighter mortgage regulations. It’s also important to remember that implementing a nationwide mortgage modification program is the exact opposite of tightening mortgage regulations. So was Bair really right to call for tighter mortgage regulations after the housing bubble had burst and we needed to contain the damage it was causing? I’m a life-long Democrat, and I’ve seen Bair’s performance during the financial crisis up close and personal — believe me, even if the FDIC’s mortgage modification model turns out to be successful (remember, it’s still unproven), Bair is doing a LOT more harm than good. Geithner is right: Bair needs to go. Sorry for the length, but the myth of Sheila Bair as a principled regulator fighting for average Americans is a myth that needs to die.

Thanks Nick. I loved your post. It was clear, informative, fact filled and based ~ and answered all my questions in regard to Bair. The “sisterhood” gene in my DNA began to rise when I read the headline of this article. “don’t tell me, another woman’s being attacked for being too smart” I read the preceding posts and became confused, “hold it, who should I be mad at?” However after reading your post it is crystal clear. Thanks. You’ve provided the foundation for me to build additional information on her and that’s what I need. If I’m going to discuss or debate an issue, I prefer to know what I’m talking about.