Speaking of hagiography, the Washington Post‘s Neil Irwin gives Treasury Secretary Tim Geithner his own parting kiss.
This line sums up the gist of the piece:
Geithner is, in his bones, a crisis fighter, and his greatest legacy is for conquering the biggest one of them all.
But here are a few things you won’t hear about Geithner in this dismal whitewashing:
The first and most obvious sign that this is not a real-world appraisal, is the absence of the word “house,” or “housing” or “home” or “mortgage.” Geithner’s appalling housing policy, of a piece with his capture by Wall Street, has resulted in untold suffering for millions of homeowners who were supposed to be helped by the $700 billion TARP bailout. The Housing Affordable Mortage Program has been almost a complete failure, as ProPublica has documented. Just $4 billion of the measly $50 billion alloted to mortgage rescues has even been spent. In Geithner’s hands the housing rescue became an extend-and-pretend program for banks to pretend they were healthier than they really were, so they could “earn” their way out of insolvency.
With the economy mired in a depression, Geithner pushed Obama toward damaging austerity policies. He argue that stimulus–a policy that, before the Democrat Obama took office in a crisis, was accepted across the board as required in a depressed economy–was a “sugar” high and that the president needed to focus immediately on deficits. That’s according to… the Washington Post.
Geithner was also the key figure in retaining our absurd, potentially catastrophic system of too big to fail banks. And even while opposing breaking up the banks we just bailed out with trillions of dollars in cash and guarantees, Geithner also pushed back against the Volcker Rule aimed at preventing those banks from gambling for their own profit with taxpayers’ implicitly taking the downside, also according to the Washington Post.
He lobbied against Elizabeth Warren heading the Consumer Financial Protection Bureau, and reliably took the Wall Street side in the debate over what would become a weak financial reform bill. He fought, in the months before he became Treasury Secretary, to protect bankers from prosecution. Point is, Geithner is as responsible as anyone save Obama himself for preserving the status quo ante of too-powerful banks.
And don’t you think it’s worth noting, if you’re going to praise Geithner for cleaning up a crisis, that he helped create the damn mess–or at least failed to prevent it? This is a guy who, as subprime credit indices were flashing red in the spring of 2007, was pushing to lower capital requirements for banks that were already in some cases levered up 33-to-1.
Then there’s this:
It has been said that the Treasury secretary is, at the end of the day, a bond salesman, representing to global investors the credibility of U.S. Treasury bonds. By that measure, Geithner is a success; 10-year bonds yielded 1.89 percent on Thursday, near historic lows.
Ten-year bond yields at 1.89 percent are a sign of failure, not success. Bond yields are low because investors still don’t really trust the financial system and because they see years of slow growth ahead. It would be completely unfair to say Geithner could and should have solved all of this by himself, but he surely could have done much, much more.
This New York Times exit interview isn’t quite as cringeworthy as Irwin’s column, but it’s still awfully soft, filled with Great Man of History quotes and with unrebutted nonsense like this:
“Our authority on housing was very, very limited,” Mr. Geithner said. “We were able to use a significant amount of the authority in the Troubled Asset Relief Program to design a program for modifying the loans of a pretty substantial fraction of Americans facing foreclosure. But we had no legal authority to compel banks to provide mortgage relief. All we could do was find incentives.”
Worst of all, though, is this baffling sentence, up high in the second paragraph:
A regulator of Wall Street but not a creature of it, he will probably be the least likely former Treasury secretary to land there.
Say what?
Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR’s business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.