January 25, 2013

Tim Geithner

Despite the post's title, I will not try to pass sweeping judgement on Tim Geithner's soon-ending tour of duty as Treasury Secretary. It seems like every newspaper, magazine and blog has done just that already so I probably have nothing new and/or intelligent to add.

This interview of him by Lords of Finance's - a decent book, although I remember it as a bit confusing/confused at times - author Liaquat Ahamed in the New Republic is interesting in that he answers some questions in a less politically correct and less guarded way than one would expect in an "exit interview", although still couched in fairly diplomatic language. Just maybe, Tim Geithner's book (because, surely, there will be a book) will make for more original/informative reading than most of the books written so far by some of the actors of the 2007 - ???? financial and economic crises.

LA: Was the talk about “fat cat bankers” counterproductive? 
TG: I’m biased but I felt that in the basic strategy that the President embraced and that we put into effect, we did something that was incredibly effective for the broad interest of the economy and the financial system. I feel the President’s rhetoric over that period of time was very moderate relative to the populist rage sweeping across the country. And I never quite understood why the financial community took such offense at what was such moderate rhetoric relative to what we have seen in other periods in history. 
LA: Now you’ve had a pretty full four years as Treasury Secretary. What’s been the hardest and most frustrating part of the job? 
TG: [...] I knew with a fair degree of confidence by the summer of ’09 that the cumulative actions we took, on top of what Paulson and Bernanke did, was going to work. I was very confident about that by that time. Even though we still had a long, rough road ahead of us. 
The most frustrating part of this work, but in some ways it’s the most consequential, is how effective you can be in relaxing the political constraints that exist on policy. You can see that most compellingly now in the fiscal debate. Paulson before us and the President were very successful during the crisis in getting a very substantial amount of essential authority essential to resolving the crisis. But it has been very hard since then to get out of the American political system more room for maneuver both on near-term support for the economy, as well as reforms that would lock in a sustainable fiscal path. That is the most frustrating thing, to get the political system to embrace better policies for the country. 
Update 02/09/2013: There will indeed be a book!

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