So, It Appears that We Have the First Catfight of the New Administration

Timothy Geithner, U.S. Treasury Secretary nominee, is seeking to dump dump Sheila Bair as Federal Deposit Insurance Corp. (FDIC) Chairman.

Normally, I would think that this is a good thing, as she was appointed by George W. Bush, but she has been remarkably honest and competent, working on behalf of homeowners rather than investors, and by publically debunking the myth that the meltdown is was caused by the Community Reinvestment Act caused the meltdown, said myth being Republican speak for, "It's all the fault of the n*gg*rs."

So, while Geithner has been mute on the people brought in by Henry Paulson to (mis)manage the bailout, he wants her gone ASAP, which raises the obvious question, "Why this target in such a target rich environment?"

After all Hank Paulson and His Evil Minions^™ all seem to be white dudes who are either bald or have shaved heads, and so are easily identified.

Well, the answer seems to be small and petty:

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.

“The idea of having an independent actor on the stage with you who might not be singing the same tune can make you nervous,” said Wayne Abernathy, a former Treasury official who is now executive vice president with the American Bankers Association in Washington. “They recognize that she’s a very independent person.”

It isn’t clear that Obama would ask Bair to step down. Such a move would be fraught with political risk for the new administration, especially on Capitol Hill, where Bair’s campaign to rework mortgages for struggling homeowners has won respect from top lawmakers, including Senate Banking Committee Chairman Christopher Dodd and Barney Frank, his counterpart in the House.

Not a team player, when the team is the hole in the head gang, is a recommendation, not a condemnation.

It seems that Greithner, who has spent his entire career being second fiddle to someone, is offended by the fact that she has different opinions, and she is, well, more correct on these issues than any of the other players, including Mr. Greithner.

Basically, it sounds like we have someone who expects sycophancy from people who are nominally under his authority, in this case FDIC Chair to Secretary of the Treasury, because that has been what he does.

But maybe I'm over analyzing the psychology of the situation, and Barney Frank's assesment, that it's No Girls Allowed' on the bailout team is accurate.

I'm not sure if Bair should be fired, but it is clear that she is the best of the lot on the job today, and based on the complaints that I have heard, which have generally come from Wall Street finance types, she may even be competent and conscientious.