As has been documented in books and articles by people like Neil Barofsky and Jesse Eisenger, Timothy Geithner symbolized the worst elements of government subservience to Wall Street. While ostensibly a public servant as head of the New York Federal Reserve Bank and later Treasury Secretary during the turbulent period up to, during, and following the financial crisis of 2008, his main goal seemed to be to protect the interests of Wall Street banks rather than the public who paid his salary and whose interests he was supposed to be safeguarding.
Geithner has now written his own book where he seeks to justify his actions and push back against his critics such as Barofsky and Elizabeth Warren. But Matt Stoller says that the public records undermines his case and that Geithner is symbolic of what Stoller calls the con artist wing of the Democratic party.
There are a few glaring problems with how Geithner portrays this debate. First of all, his main foil during the crisis was a fellow technocrat, former International Monetary Fund (IMF) official Simon Johnson, who actually had significant crisis-management experience parachuting into panicked countries and imposing structural reform on their bankers. Johnson became increasingly irate as he saw Geithner diverge from what Geithner himself at the US Treasury and the IMF forced on other countries: conditions. Geithner was hard on oligarchs when they were foreign, but when it was US bankers, well, then the wall of money argument triumphed. In fact, in a paper released in 2013, it was revealed that financial firms with a personal relationship with Geithner himself saw an abnormal 15% bump in share prices when Geithner’s name was floated for Treasury Secretary, and a corresponding though smaller, abnormal decline when his nomination was on the rocks due to his being caught not paying taxes by Senate investigators.
In 2009, Johnson published his essential argument about the US bailouts in an article titled “The Quiet Coup.” Johnson’s argument was political—he portrayed Geithner’s strategy as fundamentally entrenching a political oligarchy. That article put forward the theory that through the bailouts, America’s democratic system was being replaced by rule by financial titans. Geithner has never acknowledged that power was involved in the bailouts; those with power are loath to admit it exists. Critics of Geithner come as close as possible to calling him personally corrupt and have even marshaled the evidence that his cronies did fantastically well.
Ultimately, Geithner was a hit man for American democracy—and the middle class that sustained it. Geithner has acknowledged substantial fraud in the crisis, but he won’t even deign to answer why the administration did nothing about the individuals who perpetrated it. He doesn’t discuss distributional questions from the bailout. He sneers at the notion of justice.
Stoller finds a curious lacuna in the book and that is how Geithner, a poor student with few of the knowledge, skills, or other attributes that people who reach high office that require technical knowledge have, managed to achieve his level of influence. Stoller says that what Geithner did have, however, was coming from a family of wealth and good connections that enabled him to be successively adopted as a protégé by powerful people who opened doors for him and groomed him for higher and higher office. And at each stage as he climbed the ladder, he served his patrons well.
Geithner is at heart a grifter, a petty con artist with the right manners and breeding to lie at the top echelons of American finance at a moment when the government and financial services industry needed someone to be the face of their multi-trillion dollar three card monte. He’s going to make his money, now that he’s done living his life of fantastic power after his upbringing of remarkable mysterious privilege. After reading this book and documenting lie after lie after lie, I’m convinced that there’s more here than just a self-serving corrupt official. There’s an entire culture, of figures at Treasury, the Federal Reserve, in the entire Democratic Party elite structure, and in the world of journalism, a culture in which Geithner is seen as some sort of role model.
The pushback is happening because the Geithner era is increasingly seen as a time of betrayal and lies, not just disagreements over ideas. These people are seen as bad faith cancerous operators who need to be removed from positions of power and influence. Traditionally, Democrats think that the GOP is the party of meanness, of the wealthy, and then wonder why citizens choose to vote for them. But Americans are not stupid, and they saw what Geithner, as the head economic official in a Democratic administration, did.
Reading the review, this aspect of Geithner’s life reminds me of the character of Chance the gardener (played by Peter Sellers in the 1979 film Being There), a person of limited intelligence and with just third grade knowledge and skills who lived his entire life as a gardener inside a walled compound, and then became Chauncey Gardner, a close advisor to the president, reaching high levels of eminence because he stumbled into the arms of a group of wealthy and powerful people who, seeing depths in him that were not there, advanced his cause. But whereas Chance was a true naïf who did not seek to gain power or exploit his good fortune to advance himself, Geithner comes across as a grifter whose main skill was knowing how to serve the interests of all the ‘right’ people.
The trailer for the film captures the amazement of Chance’s childhood caretaker who, seeing him all over the TV, cannot believe that the clueless child she brought up is now so powerful. Her final comment at the 2:15 mark is priceless.