Well, notwithstanding the obvious, that Geithner is unwilling to do the tough things, and that he keeps coming back to the bad bank, but it may very well be the AIG bonus fiasco that does him in.

Ignoring the fact that Geithner was at the center of the first AIG bailout, we are now seeing the signs of panics with Treasury department pointing the finger at Senator Chris Dodd, despite the fact that it was Treasury Secretary Timothy Geithner and Lawrence Summers who waged all out war against meaningful regulation of executive bonuses, and Dodd proposed strong regulations against excessive bonuses:

(4) a prohibition on such TARP recipient paying or accruing any bonus, retention award, or incentive compensation during the period that the obligation is outstanding to at least the 25 most highly-compensated employees, or such higher number as the Secretary may determine is in the public interest with respect to any TARP recipient;

What’s more, we are now seeing that the Washington Post editorial page, in the person of Harold Meyerson is now calling Geithner the bank’s bitch:

But Geithner’s indulgence of bankers’ indulgences is fast becoming the Obama administration’s Achilles’ heel. The AIG debacle is the latest in a series of bewildering Geithner decisions that threaten to undermine the administration’s efforts to restart the economy. So long as it’s Be Kind to Bankers Week at Treasury — and we’ve had eight straight such weeks since the president was inaugurated — American banking, and the economy it is supposed to serve, will remain paralyzed. The Geithner plan to restart the banks provides huge taxpayer subsidies to hedge funds, investment banks and private equity companies to buy the banks’ toxic assets without really having to assume the risk. That’s right — the same Wall Street wizards who got us into this mess, using the same securitization techniques that built mountains of debt within a shadow financial system that remains unregulated, are the saviors whom Geithner has anointed to extricate us — with our capital, not theirs — from the mess that they created.

It isn’t entirely fair: It was clear that this is what Timothy Geithner was when Obama first nominated him, so it is fair to say that Geithner’s policies are Obama’s policies.

One hopes that Obama dumps the policy, and Geithner (and Summers) shortly.

In the meantime, the Republicans are pulling their knives out with Representative Connie Mack (R-FL) and House Minority Leader John Boehner (R-OH) are directly or indirectly calling for Geithner’s ouster.

I can’t believe that I am saying this, but Obama should listen to them.