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Timothy Geithner: Reflections on a global crisis, from a man at the centre of the storm

The cover of the book ‘Stress Test,’ by Timothy Geithner and published by Crown, in New York, May 2014.


Tiger Moms, you're going to hate the Timothy Geithner book.

"I was a good student, never a great student," Mr. Geithner, who led the Federal Reserve Bank of New York and was Barack Obama's first treasury secretary, writes early in his memoirs. "I was a decent athlete, nothing special. I wasn't particularly ambitious or hard working."

This blasé kid from New York, who spent parts of his youth in New Delhi and Bangkok, and his college years at Dartmouth, an Ivy League school in New Hampshire that accepted him because family members were alumni, would grow up to be a key figure in one of his country's most traumatic periods. A childhood of enforced piano lessons, extracurricular language classes, charitable endeavour, and sporting stardom wasn't required. (Neither was an economics degree, as Mr. Geithner became one of his country's most important central bankers without one.)

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The sense of detachment never went away, however. Mr. Geithner's career path ran through the offices of Henry Kissinger's consultancy and the Robert Rubin's Treasury Department, at which he worked closely with Lawrence Summers and Alan Greenspan. All were giants of Washington. Yet Mr. Geithner says more than once in his book, Stress Test: Reflections on Financial Crises, that he never shared their "strength of conviction" that there was a right way to do things and a wrong one. Mr. Geithner, who voted for Ronald Reagan in the 1980s and Bill Clinton in the 1990s, distrusts bias, experience, ideology and politics. He was guided by evidence, and was relentless in his analysis of it.

"I lived for this stuff even when it was the scariest and the hardest," Mr. Geithner said in a telephone interview this week. "I loved coming to work. It's just like the most interesting, consequential thing you could do even when it was hard."

America's accidental treasury secretary now is seeking his place among the men and women who calmed a global financial panic like few living people had ever experienced. Mr. Geithner's book is a sincere, dispassionate telling of what he saw, what he did and what he wishes he could do over again. At a minimum, Mr. Geithner was one of a small group of people that figured out a way to keep a calamity from turning into something much worse. His reflections amount to a training manual for the next generation of crisis fighters that Mr. Geithner himself had to do without.

Mr. Geithner has his share of critics, but few have been harder on him than he is on himself as he reflects on an extraordinary period during which there were few obviously correct answers. He makes no excuses for an abysmal debut performance at which he was supposed to unveil a plan to calm Wall Street, and instead caused stocks markets to plunge 5 per cent. "My speech … sucked," Mr. Geithner writes.

Stress Test suffers from lack of suspense. Thousands of pages have been written about those years, including other memoirs and an exhaustive report by the Financial Crisis Inquiry Committee. Mr. Geithner's book does little to change the accepted narrative.

While his crisis contemporaries were writing, Mr. Geithner was working. He left the New York Fed at the end of 2008 to become Mr. Obama's treasury secretary, a position he held until early 2013. The only American veteran of the financial crisis who served longer was former Fed chairman Ben Bernanke, who retired earlier this year. (W.W. Norton & Co. said last week that it will publish Mr. Bernanke's memoir in 2015.)

That commitment is what separates Mr. Geithner from so many others. Missing from the daily news stories and cable television commentary during the crisis was the immense personal toll those years took on subjects of those reports. Mr. Geithner's memoir gets dark; he acknowledges that he spent years absent from his family's life, yet there was nothing he could do to correct it. There was no escape from the stress of duty and the fear of what could go wrong if he screwed up.

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"I don't miss public life," Mr. Geithner said in the interview. "I felt like I had my share of hard, consequential things."

Mr. Geithner's memories are dark, but his outlook is brighter. He clashed continuously with Washington's hyper-partisan political system, and had little good to say about Congress at the time. Now, he says he recognizes that the system worked when it really needed to, and that the partisan fever that currently grips the U.S. will pass.

And he is highly skeptical of those who argue that the U.S. economy has changed so dramatically that it never again will be as strong as it was before the crisis. He's come to that conclusion that way he always has: through a hard analysis of the evidence.

"Most of the darkness you hear today about the economy is really about the aftershocks of the trauma caused by the crisis," he said. "Once those transitory factors fade, you should be able to see an economy that is getting strong and then people can reassess over time what was temporary and what was more durable."

They will be assessing Mr. Geithner's legacy at the same time.

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About the Author
Senior fellow at the Centre for International Governance Innovation

Kevin Carmichael is a senior fellow at the Centre for International Governance Innovation, based in Mumbai.Previously, he was Report on Business's correspondent in Washington. He has covered finance and economics for a decade, mostly as a reporter with Bloomberg News in Ottawa and Washington. A native of New Brunswick's Upper St. More


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