House Grills Geithner on AIG

Timothy Geithner defended the AIG bailout he helped engineer today, in testimony before a House Oversight Committee that was out for blood. “In effect, the taxpayers were propping up the hollow shell of AIG,” declared chairman Edolphus Towns, “and the rest of Wall Street came by and looted the corpse.” Geithner protested that though the decision to rescue the insurance giant was “exceptionally difficult” it had prevented a “second Great Depression.”

The committee’s top Republican, Darrell Issa, was no kinder. He asked Geithner if he’d ever become involved with the Fed’s discussions on the counterparty claims issue as Treasury secretary. When Geithner replied that he hadn’t, Issa displayed an email proving that he had. Geithner departed from his final remarks in his closing, saying, “If you are outraged by AIG—and you should be—then you should be deeply committed to financial reform.” (More Timothy Geithner stories.)