For former Treasury secretary Timothy Geithner, handling the financial crisis felt like landing a burning plane, and in the process of saving the economy, he says the government lost the country.
That’s according to Geithner’s new memoir, “Stress Test: Reflections on the Financial Crises.”
“It's like you're in the cockpit of the plane – your engine's burning, smoke's filling the cabin, it's filled with a bunch of people that are fighting with each other about who's responsible, you have terrorists on the plane and people want you to come out of the cockpit and put them in jail. And you have to land the plane.” he told NPR in an interview about the book.
Geithner, who has at the forefront of the Obama administration’s efforts to contain the financial crisis, spends much of the 538-page book defending his actions in dealing with the financial crisis, especially bailing out Wall Street banks.
“The inconvenient truth of financial-crisis response is that the actions that feel right are often wrong," he writes in “Stress Test.”
That is why Geithner claims he, and the Obama administration, lost the country in the process of saving the economy.
“It looks like you're giving aid to the arsonist. Inherent in successful economic rescues are things that are deeply unpopular. And, of course, I knew that, felt that was unavoidable, lamentable,” he told CBS News in an interview about the book.
“Stress Test” is packed with such insights into the often-painful decision-making that went on behind the scenes during the financial crisis, decisions that required choosing between “bad” and “worse,” as Geithner has sometimes put it.
Going into the crisis, Geithner said he knew it would be “terrible” and tried to talk the President out of asking him to take the job.
And though he was unlike his predecessors in that Geithner had no experience on Wall Street, in corporate America, in politics, the law, or even a PhD in economics, he had one quality critical to the monumental task he would take on as treasury secretary during a crippling recession: an understanding that, as the Washington Post put it, “policymaking is a fundamentally tragic business, often involving choices between two or more bad options, and the best that can be hoped for is to avoid making matters worse."
In other words, Geithner was no optimist.
The book’s title is a nod to Geithner’s “stress test” program to determine if the nation’s big banks could survive rough economic conditions or would need bailouts – as well as his “baptism-by-fire” response to the financial crisis and the withering criticism he faced as treasury secretary.
Perhaps his biggest mistake, Geithner says, was missing signs of the impending financial disaster on the horizon when he was president of the Federal Reserve Bank of New York.
His biggest weakness, he says, was public speaking – a critical flaw in a role that required Geithner to explain and defend difficult decisions to an angry American public.
His lack of gray hair and gravitas made him look like a boy at his Bar Mitzvah, and his first public speeches and TV interviews were disasters, Geithner says.
On his first speech as treasury secretary, Geithner says, “I swayed back and forth, like an unhappy passenger on an unsteady ship,” he writes. “I kept peering around the teleprompter to look directly at the audience, which apparently made me look shifty; one commentator said I looked like a shoplifter.”
And yet, looking back on his tenure as captain leading the country out of the rough waters of recession, Geithner writes in his book that he has few regrets.
As treasury secretary, he says, he did everything he could to protect Americans, save the financial system, and prevent “economic Armageddon.”
Readers, of course, can judge for themselves after reading “Stress Test,” Geithner’s account of how a “reluctant warrior” and uninspiring public speaker lacking “gray-haired gravitas” forged a painful and controversial path out of a potentially disastrous financial crisis.
Husna Haq is a Monitor correspondent.