The Ultimate Failure of Tim Geithner

The Ultimate Failure of Tim Geithner

05/28/14

Christopher Whalen

Banking, United States

"It is simply wrong for anyone to suggest that 'systemic' harm arises by jailing crooked bankers."

Former Treasury Secretary Timothy Geithner’s memoir, Stress Test: Reflections on the Financial Crisis, continues his efforts to obscure the motivations behind many of the bad decisions and omissions he made over a decade in public life. First as President of the Federal Reserve Bank of New York, then as the chief fiscal officer of the United States, Tim Geithner made a series of seeming blunders and carefully calculated oversights that were designed not to save the global financial system, but instead to protect some of the worst actors behind the financial crisis.

“The lack of financial prosecutions combined with the revival of financial profits have contributed to the belief that nothing has changed,” Geithner writes. “But nothing we did during the financial crisis was motivated by sympathy for the banks or the bankers. Our only priority was limiting damage to ordinary Americans and people around the world.”

But of course this is complete nonsense. As Ben White of Politico wrote: “He's the guy who bailed out Wall Street 'arsonists' with no strings attached, but wouldn't do much to help struggling homeowners or punish the greedy bankers who crashed the economy.” Yet Geithner apologists from author Michael Lewis to economist Gene Sperling somehow believe that Geithner’s decision not to give Old Testament justice to profligate bankers was somehow a selfless act.

First and foremost, when Geithner protected the banksters he was doing the bidding of his political sponsor and mentor Robert Rubin. The former Treasury Secretary, former Chairman of Citigroup and former CEO of Goldman Sachs avoided being held responsible for causing the dire straits of one of the largest U.S. commercial banks because of Geithner’s generosity. Geithner and his predecessor at the Treasury, former Goldman Sachs CEO Hank Paulson, blocked efforts by then-FDIC Chairman Sheila Bair to shut down Citigroup and place the bank into an FDIC receivership.

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