Geithner Accused Of Lying In New Tell-All Book

05/12/2014 11:24 am ET | Updated May 23, 2014
  • Mark Gongloff Managing Editor, Business and Tech, The Huffington Post

Tim Geithner did not exactly become America's Sweetheart during his tenure as our financial-crisis Treasury secretary. And his new memoir isn't winning him many more friends.

In fact, two people discussed in Geithner's new book, Stress Test, out on Monday, say Geithner is lying about them: conservative Harvard economist Glenn Hubbard, a former Mitt Romney adviser and massive weasel in the film "Inside Job," and Neil Barofsky, former head of the watchdog agency that kept an eye on the government's bank bailout.

"Mr. Geithner stands by his accounts in Stress Test," Geithner spokeswoman Jenni LeCompte wrote in an email to The Huffington Post.

Hubbard told Politico that a passage in Geithner's book, in which Hubbard is quoted as saying "of course we have to raise taxes" in order to balance the federal budget, is a big lie.

“Geithner is making it up,” Hubbard told Politico. “It’s pretty simple. It’s not true."

According to Geithner's book, he and Hubbard had a chat, which must have had all the warmth of a dead python in a meat locker, in the heat of Romney's presidential run in early 2012. Geithner claims that Hubbard whined to him about President Barack Obama not supporting the Simpson-Bowles deficit-reduction plan. Geithner says he shot back that "you guys" -- meaning maybe Romney, or conservatives generally -- had to agree to some tax increases first. Geithner claims that Hubbard responded with the conservative heresy that "of course" taxes would have to go up.

And Geithner is standing by that story, according to spokeswoman LeCompte, who told Politico and HuffPost: “Mr. Geithner’s memory on this exchange is crystal clear.”

Geithner's story sort of makes Romney look like a hypocrite, given that he had signed an Americans For Tax Reform pledge never to raise taxes, no matter what. Then again, it was only his adviser suggesting that taxes would be raised, and a no-tax-hike-ever pledge is ludicrous in any event.

In fact, the Simpson-Bowles plan, which Hubbard has endorsed repeatedly, calls for raising tax revenue, Vox's Matt Yglesias points out -- which would seem to make Geithner the winner of this particular argument.

Barofsky, the former Treasury Department special inspector general overseeing the Troubled Assets Relief Program (TARP), the $700 billion bank bailout, has a longer list of problems with Geithner's book.

Barofsky published his own book in 2012, Bailout (full disclosure: I have a blurb on the paperback edition), which roundly trashed Geithner as being more worried about protecting Wall Street than taxpayers or struggling homeowners. Barofsky described some unpleasant encounters with Geithner, including one that devolved into an f-bomb testing ground.

Geithner gets even in his own book. He claims that Barofsky was unqualified for the job of running the watchdog agency, also known as SIGTARP. He also claims that SIGTARP hurt the government's efforts to sell the bailout to the American people (as if the Treasury wasn't already hurting itself on that front) by warning the government faced potential losses of $23.7 trillion.

"Barofsky's desire to prevent perfidy was untainted by financial knowledge or experience," Geithner writes. "He assumed our motives were self-evidently sinister, as if we had helped banks for fun and profit rather than to cure a metastasizing financial crisis."

Barofsky disputes those claims and many others. In a post on LinkedIn on Friday, Barofsky wrote that Geithner is being misleading about that $23.7 trillion warning. He suggested that Geithner might be lying when he claims that another former Treasury secretary, Hank Paulson, apologized to Geithner for "bequeathing me Barofsky."

"Mr. Geithner refuses to allow facts to get in the way of good hyperbole," Barofsky wrote, repeating his assertion that Geithner cared more about helping Wall Street than Main Street.

Geithner, in the book and in many interviews, has maintained that rescuing Wall Street and preventing a run on the banks was necessary to stop a meltdown that might have consumed Main Street. It's been a brutally tough sell, given that the real economy suffered a grueling recession and dismal recovery, bank profits have rebounded nicely, and only one banker has gone to jail for wrongdoing during the crisis.

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