He worked at Treasury for more than a decade, including a tour as an attache in Tokyo, before joining the IMF and the New York Fed — but he’s never worked on Wall Street. His only private-sector experience came at Henry Kissinger’s consulting firm right out of grad school.
Not surprisingly, Geithner has been defensive about his apocryphal investment-banking past. Appearing at a House Democratic retreat not long after his Senate confirmation in 2009, he blurted out: “I never worked for Goldman. I never worked on Wall Street. I don’t come from money.”
If there was a problem with Geithner’s relationship to the financial sector, it wasn’t corruption but intellectual capture. Geithner spent his two decades as a bureaucrat adopting many of the views of the financial-sector elite. When he was New York Fed president, several titans of finance sat on his board of directors. So it came as no surprise when he told me in 2011 that preserving Wall Street’s outsize role in the economy was one of the keys to America’s strength. “I don’t have any enthusiasm for . . . trying to shrink the relative importance of the financial system in our economy,” he said.
2. Geithner is mild-mannered and understated.
For years, Geithner’s slight frame and boyish looks have inspired doubts about his toughness. Pete Peterson, a financier who once chaired the New York Fed’s board of directors, told me that, before he hired Geithner as the bank’s president, he “wanted to be sure the soft-spokenness, the diffidence, didn’t translate into a lack of courage.” He need not have worried. As Geithner’s mentor Larry Summers reassured Peterson, Geithner was “the only person who ever worked with me who’d walk into my office and say to me, ‘Larry, on this one, you’re full of
s---’. ”
This bluntness was a hallmark of Geithner’s tenure at Treasury, at least behind closed doors. When he decided that infighting among regulators could derail Wall Street reform in 2009, he told the heads of the Securities and Exchange Commission, the Federal Deposit Insurance Corp. and the Commodity Futures Trading Commission (CFTC) that their behavior was “[expletive]” ridiculous, advising them to speak with one voice rather than look out for their own turf. In spring 2011, after Standard & Poor’s said it planned to downgrade its outlook on the U.S. credit rating, Geithner summoned the company’s top officials to Treasury and told them they knew little about how deficit reduction worked in Washington. It’s not your “comparative advantage,” he told them, according to one participant.
3. He had a relatively free hand in setting economic policy.
Even though Geithner ranks as one of the most influential Treasury secretaries in history, he often didn’t get his way on key policy decisions. He was an early opponent of the “Volcker Rule,” a proposal from former Fed chairman Paul Volcker to forbid government-backed banks from gambling like hedge funds. But Geithner did an about-face once it became clear that the president was enthusiastic about the idea.
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