PhillyDeals: PhillyDeals: Groundswell of support for dumping Geithner

Can a bank regulator known for not paying taxes persuade Americans to give government more money?

President-elect Barack Obama has been sticking by his Treasury secretary nominee, Timothy Geithner, despite Geithner's failure to pay $42,000 in federal tax and interest.

A lot of smart people - Sullivan & Cromwell L.L.P. chairman Rodgin Cohen, Democratic economist Laura D'Andrea Tyson - have gone on TV to say Geithner made an honest mistake and ought to be confirmed by the Senate.

The new president and his aides feel the urgency of falling profits, weak sales, frozen markets, and people losing their jobs. They want Geithner to get on with spending the people's billions to fix the credit market that got wrecked while he was watching over its main players, as head of the Federal Reserve Bank of New York.

But away from Washington and Wall Street, one of our more quotable hinterland economists, money manager David Kotok of $1-billion-asset Cumberland Advisors Inc. down in Vineland, hears outrage on Geithner from clients and the others - business owners, well-off retirees, professionals - who read Kotok's newsletter.

Kotok told me he has gotten "nearly 50" notes opposing Geithner's confirmation vs. just four who "want to move on and believe he will be confirmed."

According to a Senate Finance Committee report, Geithner didn't pay his 2003 and 2004 Social Security until he was caught in an Internal Revenue Service audit, and he didn't pay for 2001 and 2002 until Obama nominated him for Treasury secretary. "Had he paid all and declared that he made an innocent error, and done this in 2006, none of this would have been an issue," Kotok said.

"The e-mail critical of Geithner and suggesting that his name should be withdrawn is consistent and in high volume," Kotok concluded. You can bet the embarrassed agencies where Geithner used to work won't be hiring more "tax scofflaws," Kotok added.

Should Obama?

The

Flyers

and

Sixers

play in an arena named for a company that no longer exists, now that the former

Wachovia Corp.

is part of San Francisco-based

Wells Fargo & Co.

What will they call it next? "What do you think of 'Wells Fargo Center'?" asks Wells' top local officer, Hugh Long.

A reader - a former Wall Street functionary - thought about that prospect and couldn't help himself: "What's more appropriate?" he asked me. "The whole banking industry" now looks like a "Western movie."

Long, former head of Wachovia's New York-to-Washington region, has been reassigned by Wells to a job he held earlier in his career - head of Pennsylvania and Delaware. It's a key post in Philadelphia, where Wachovia is the largest bank. New Jersey and New York go to another Wachovia veteran, Michele Lee.

"It's the Charlotte disease," once-and-future banker

Vernon Hill

said last week.

He was talking about Bank of America Corp.'s indigestion over its purchase of Merrill Lynch & Co. Inc., which the government had to rescue with a new investment in the bank last week.

BofA chairman Ken Lewis called the Merrill deal, which gives the nation's biggest bank its biggest stock brokerage, a great opportunity.

Hill compares it to the former Wachovia Corp.'s 2005 purchase of Golden West Financial Corp., a minefield of bad California home loans that forced Wachovia's sale last year to Wells Fargo. BofA is based - as Wachovia was - in Charlotte, N.C.

Hill is a partisan and gleefully prejudiced observer. The ousted chief executive officer of Commerce Bancorp Inc. is now the biggest investor in what will soon be called Metro Bank, with branches in Pennsylvania, New Jersey and (under a separate charter) England.

"BofA's purchase of Merrill is its Golden West: one deal too far. It obliterated shareholder value and will inevitably cause the bank to be gripped by the same malaise that has engulfed - and may destroy - Citigroup," Hill predicted in a column on www.bankstocks.com last week.

"Too big to manage means too big to survive."