Treasury Secretary Timothy Geithner offered a rather unconvincing defense of the double standard set when the Obama administration forced the ouster of General Motors ( GM) CEO Rick Wagoner as a condition for more aid while leaving in place all the executives at banks that received billions more in taxpayer bailout funds . To be fair, Geithner actually denied a double standard exists in his remarks on CBS' Face the Nation over the weekend. As proof, he made absolutely clear that if any banks ever come back for more federal assistance, then maybe the government would insist on some management changes. Strong language. If I were a banking executive, I'd be worried. If any banking executives were thinking about asking for more money, surely they are reconsidering now. If it weren't already too late for such feeble threats, taxpayers might feel reassured. This tough talk from Geithner is chilling. Ford ( F) CEO Alan Mulally is no doubt happy about his decision to forego federal aid, despite the advantage General Motors and Chrysler may gain if they go through bankruptcy and shed all those legacy costs that Ford must grapple with on its own. But what's done is done. For the banking executives, it's time to prove they deserved to keep their jobs. Vikram Pandit at Citigroup ( C) and Ken Lewis at Bank of America ( BAC) can both let out a sigh of relief and get back to work on fixing their banks rather than saving their jobs.
If anything, Geithner's remarks over the weekend will inspire Citigroup and Bank of America, along with Goldman Sachs ( GS), Morgan Stanley ( MS), JPMorgan Chase ( JPM), Wells Fargo ( WFC) and others, to rush back to Washington to work out repayment deals so that they can escape all the inconvenient conditions they already accepted from the government. That's probably not an option for AIG ( AIG), however. In fact, if any executives should be nervous it's AIG CEO Edward Liddy. The insurer has become such a regular in the handout line that it's hard to believe it won't be back for more at some point. Not to worry, former CEO Hank Greenberg seems to be angling to get his old job back with his frequent outspoken, back-seat driver commentary about the company he ran until March 2005. But come on, Hank, the whole point of all this boardroom shakeup talk is to bring in new leadership. That is, if the government thinks it's necessary.