This week’s article is Geithner, Member and Overseer of Finance Club by Jo Becker and Gretchen Morgenson in the New York Times. Following is a small excerpt and link to the print friendly version of the article. I recommend reading the print friendly version since it’s easier to read instead of having to continuously load a new page:

Last June, with a financial hurricane gathering force, Treasury Secretary Henry M. Paulson Jr. convened the nation’s economic stewards for a brainstorming session. What emergency powers might the government want at its disposal to confront the crisis? he asked.

Timothy F. Geithner, who as president of the New York Federal Reserve Bank oversaw many of the nation’s most powerful financial institutions, stunned the group with the audacity of his answer. He proposed asking Congress to give the president broad power to guarantee all the debt in the banking system, according to two participants, including Michele Davis, then an assistant Treasury secretary.

The proposal quickly died amid protests that it was politically untenable because it could put taxpayers on the hook for trillions of dollars.

“People thought, ‘Wow, that’s kind of out there,’ ” said John C. Dugan, the comptroller of the currency, who heard about the idea afterward. Mr. Geithner says, “I don’t remember a serious discussion on that proposal then.”

But in the 10 months since then, the government has in many ways embraced his blue-sky prescription. Step by step, through an array of new programs, the Federal Reserve and Treasury have assumed an unprecedented role in the banking system, using unprecedented amounts of taxpayer money, to try to save the nation’s financiers from their own mistakes.

And more often than not, Mr. Geithner has been a leading architect of those bailouts, the activist at the head of the pack. He was the federal regulator most willing to “push the envelope,” said H. Rodgin Cohen, a prominent Wall Street lawyer who spoke frequently with Mr. Geithner.

Today, Mr. Geithner is Treasury secretary, and as he seeks to rebuild the nation’s fractured financial system with more taxpayer assistance and a regulatory overhaul, he finds himself a locus of discontent.

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Runner-ups:
- Tracking Loans Through a Firm That Holds Millions by Mike McIntire in the New York Times
- ‘Cheeky’ banks play game of marking bonds to market by Tony Jacksson in the FT
- In the Wake of Economic Collapse. Iceland’s Election: It’s not about Left and Right by Michael Hudson

Related posts from the blog:

• Article of the week (27/2009): Goldman Sachs: The Great American Bubble Machine
• Article of the week (23/2009): The Crisis and How to Deal with It
• Article of the week (13/2009): The Big Takeover
• Article of the week (24/2009): Billionaire Tax Felon Says UBS Lied in Pledge to Report to IRS
• Article of the week (25/2009): Have stock markets run away from reality?