As Barney Frank once told Tim Geithner, you aren’t going to be able to sell anyone with the slogan, “things could have been worse.” Nonetheless, the former Treasury Secretary was doing his best last week in New York, during what his press person called a “three week blitz,” to promote his memoir, Stress Test: Reflections on a Financial Crisis. “It could have been dramatically worse,” Geithner told USA Today, of the aftermath of the crash of 2008. “It turned out,” he told Jon Stewart on The Daily Show, “much better than it could have been.” In case you missed his point: “Let me do it one more time, differently,” he told the Financial Timesbaroquely. “The fact that five years later people may still feel that what we did was unjust, because they couldn’t imagine the counterfactual is, of course, not an argument for not doing it.”
Geithner is not an imposing figure. This worked against him during the crisis. Whenever he appeared, blushing and stammering, the Dow dropped a couple hundred points. Now, his awkwardness undermines his position in a way that works for him: When he says the bailout he helped orchestrate, as Treasury Secretary and president of the New York Fed, helped change the level of the crisis from red to orange, he never sounds like he is taking credit for it, which would both come off as sort of grandiose and also make him more of a target than he already is.
Instead, he has become a master of the geopolitical humblebrag: “We saved the economy,” he writes in Stress Test. “But we lost the country.” This air of martyrdom permeates the book, in which he portrays himself as an ordinary Joe who sacrificed his own reputation by making decisions that, while unpopular, were for the good of the country. The first point is not debatable: Geithner and his decisions are deeply unpopular. But he’s hoping the book will convince people they were made for the right reasons.
Why Geithner, who famously hated his position so much he agitated to leave several times before resigning for good last year, would choose to wade back into this intractable debate so soon after leaving is probably something he should talk about in therapy. The first guess is that he is hoping for some kind of vindication. But no, Geithner told the group of journalists assembled in the offices of his publisher, Crown, last week, that’s not it at all. “There’s no risk of vindication,” he said, with an Eeyore-like air of inevitability. “There’s no chance for vindication. There’s no hopefor vindication.” It’s not masochism, either, he says, although for someone who considers Larry Summers a mentor that wouldn’t be surprising. It must be noble intentions, then? The desire to pave the way for future generations? “That would be messianic,” Geithner said, but, yes, that’s pretty much it. “I was a little worried about writing a book in that it would bring back a lot of bad memories,” he said. “That it would be PTSD for a lot of us.” It was not clear if by ‘us’ he meant the people in the room, mostly financial journalists who had interacted with Geithner during exhaustive financial crisis coverage. The gathering had the air of a survivors support group, with a tray of untouched brownies and cheese sitting adjacent to a dwindling supply of coffee. (“Can we get some more of the caffeinated kind?” Felix Salmon, who has written hundreds of blog posts opining on the bailouts and the effects thereof, asked a functionary.) Geithner cleared his throat. “I also wanted to, for our successors, I sort of thought we should give them a better framework for making choices, they might make different choices,” he said. “In my experience growing up at the Treasury and even at the Fed, there was, frankly, remarkably little institutionalized practical experience.”
As an example, in the book, he talks about how after he began working at the New York Fed, “once they decided they could trust me they showed me this thing called the Doomsday book,” he says. “That sounded sort of you know, cool. But when you looked at it there wasn’t much there.”
But Stress Test reads more like a defense of what the administration did do than what should be done. “It was a crushing experience,” he says of the decisions they made. “Despair-inducing.” And when it comes to the future, Geithner hardly seems bullish. According to him, the position of Treasury Secretary itself is inherently flawed. “You want a mix of things you will never achieve in combination,” he says. “Its good if you know something about finance and know something about the world and know something about economics, and understand markets and ideally have experience in those things. But you are never going to find a mix of those things.” After about an hour of this, Geithner excused himself. He had a taping of the Daily Show to do. On the way out, Linette Lopez from Business Insider asked for his predictions on what the next crisis would be. “I’ll see if I can say it in English,” he said. “This thing where people think they had a guaranteed deposit. And they have taken that money and put it on a lot of risky stuff. It will be that. It will be that form,” he said, adding, before he shuffled off. “It is inexorable.”
On the Daily Show, Jon Stewart picked up on this pessimism. “You’re living in a world where you are assuming that it was possible to deliver a program that would have been more popular, more fair in perception, and more effective to the average person, and that perception is based on an illusion,” Geithner was telling him, when the host interrupted.
“I would suggest you’re living in world where you believe it wasn’tpossible,” he said, as the audience cheered.
Geithner took a long, nervous sip of water. “I know you believe that,” he said. “But it’s not quite true.”
The interview went so long, the Daily Show ended up airing it online, in four parts. “I don’t know what just happened,” Stewart said in the end. “I feel like we both woke up naked and bruised in an alley.”
All in a day’s work for Tim Geithner. When your world view is this dark, “Things could have been worse” is practically sunny.