NYT Editorial Board Repeats Morgenson Idiocy

The NYT editorial board recycles a thoroughly discredited accusation about the Fed's decision to save AIG (h/t Felix Salmon):

The revised version of the story (in which there is no disparate treatment, only officials following the letter of the law in each case) sidesteps questions about whether the bailout of A.I.G. — arranged by Mr. Geithner — was influenced by the specific needs of some of the insurer’s counterparties, like Goldman Sachs.

The Times’s Gretchen Morgenson reported that Lloyd Blankfein, the chief executive of Goldman, was the only Wall Street executive at a meeting at the New York Federal Reserve on Sept. 15 to discuss the A.I.G. bailout. A Goldman spokesman said Mr. Blankfein was not there to represent his firm’s interests, but rather that Goldman “engaged” the issue because of the implications to the entire system.

To suggest that the Fed's decision to bail out AIG was improperly influenced by Goldman is about as absurd as it gets.

First of all, the Fed already responded to Morgenson's ridiculous article, explaining that representatives from the other Wall Street banks were at the meeting as well, although Blankfein was technically the only CEO there.

Second, and most importantly: The Fed hired Morgan Stanley to advise them on the AIG bailout. From Bloomberg:

The Fed has hired Morgan Stanley to examine alternatives for AIG, a person familiar with the situation said. Morgan Stanley will review what role, if any, the government should play in helping the insurer.

Gretchen Morgenson is the most incompetent financial reporter I've ever seen.