Review of Stress Test

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8 Overall

8 Importance

7 Innovation

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Review

Timothy Geithner’s stint as US Treasury secretary, which began in 2009, left an uncertain legacy. To critics on the right, Geithner was a lackey of President Barack Obama, a proponent of wasteful government spending and an enabler of economy-choking regulations. To detractors on the left, Geithner’s a centrist who mollycoddled bankers and an apologist who missed a golden opportunity to break up the money-grubbing cartel on Wall Street. Geithner views himself as a pragmatist and a centrist, a technocrat who sees the world in shades of gray. His memoir details his central role in Washington’s response to the financial crisis. The retelling fills in some blanks in the story. Geithner’s version is unlikely to sway the skeptics, but it offers a nuanced view of the pressures he faced during the depths of the crash. Geithner published this memoir after he left the cabinet but while Obama was still president. Geithner portrays himself as a commonsense manager more interested in saving the world than in changing it. His policies staved off financial Armageddon, yet determining whether his approach was most efficacious is impossible. Geithner crafted his response to the crash only after arduous debate. He acknowledged to Obama and others his uncertainty about whether his response would work. Geithner cites his ideological differences with Obama financial adviser Lawrence Summers. Summers had been a mentor to Geithner, and they respected each other. But Geithner frequently espoused more moderate positions than Summers did’. While always politically neutral, getAbstract finds that Geithner’s account offers historical insight across the political and economic spectrum.

About the Author

Timothy Geithner headed the Federal Reserve Bank of New York and later served as the 75th US Treasury secretary. He wrote this book as a fellow at the Council on Foreign Relations.

 

“Not Enough”

Geithner reminds readers that he angered both sides of the political aisle. He nudged Obama and Summers away from aggressive reforms and back toward the center. Soon after Obama chose Geithner to deal with the financial crisis, Geithner writes, he and Obama discussed the new president’s goals for his first term. “Your accomplishment is going to be preventing a second Great Depression,” Geithner told Obama. “That’s not enough for me,” Obama replied. Later, the former president of Mexico warned Geithner, “No matter what you do, no matter how you do it, the people are going to hate it.” Geithner maintains he did the right by the American people.

Centrist Career

After a happy childhood as an expat, Geithner attended Dartmouth College and Johns Hopkins University and studied in China. Then he rose through the ranks in Washington. He worked as an undersecretary to President Bill Clinton’s Treasury secretaries Robert Rubin and Summers, before taking a position at the International Monetary Fund. Two dubious honors defined Geithner’s career, both near no-win situations. When the global economy crashed after an orgy of excess, Geithner led the New York Fed, leading to the question: If Geithner’s such a genius, not to mention a responsible steward of the public trust, why didn’t he see the crisis coming? Next came a promotion to Treasury secretary under Obama and the thankless task of bailing out Wall Street in 2009. Fixing something as massive, complex and ambiguous as the US financial system invites second-guessing. Bankers and Republicans bashed the rescue Geithner orchestrated as punitive and intrusive. Progressives have panned it as not punitive or intrusive enough. “We did save the economy, but we lost the country doing it,” Geithner writes.

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