10 years after the 2008 financial crisis, former Treasury Secretary Tim Geithner has a stern warning for Congress and the “fevers of political extremism.”
Broken government can kill the economy.
“The major economic disappointments of our time are not primarily about a failure of ideas,” Geithner said at a dinner in New York Tuesday where he received a public service award. “They’re mostly a failure of the ability to get the more sensible ideas through this damaged, broken political system.”
Geithner was an architect of the government’s response to the financial meltdown as president of the New York Federal Reserve and President Obama’s first Treasury secretary from 2009-2013. He was a key player at the New York Fed during Lehman Brothers’ collapse in 2008 and the subsequent rescue and mergers of major banks during the crisis.
“I had the exceptional fortune of working with [Treasury Secretary] Hank Paulson and [Fed Chairman] Ben Bernanke through the most harrowing parts of the financial crisis,” Geithner said. “We tried to honor Roosevelt’s imperative in the Great Depression that the country needed bold, persistent experimentation.”
He compared his time at both Treasury and the Fed to Congress, calling them “two different worlds.”
“Policy mostly bent towards competence,” he said. “This approach to governing stood in stark contrast to the way Congress often approached its responsibilities.”
Colleagues at Treasury and the Fed were “talented and ethical” and the culture was “not friendly to peacocks or jerks.” The agencies resisted “the short-term political and temptations of whatever.”
Geithner did express optimism that the “pragmatic core of the American political ideal” would again return and “capable people” in government would reassert themselves.
For that to happen, however, “we have to protect the essential foundations of competent government: the ability to attract experienced, talented, pragmatic people to public service.”
At Treasury, Geithner guided the Obama administration’s efforts to bailout the U.S. auto industry and carry out TARP, a massive stimulus package to jumpstart the economy. Geithner helped design “stress tests” of the largest banks to ensure they could survive further financial turmoil.
Geithner spent most of his career in government, joining the Treasury Department in 1988. He serving as a top deputy to Treasury secretaries Robert Rubin and Larry Summers.
