Departing Treasury Secretary Timothy Geithner says it is "extremely unlikely" that he'll get a job on Wall Street once he leaves government. You could argue that he's been working for Wall Street all along.
Geithner's comment about his future plans comes in a new interview with New York magazine, which follows other recent statements that he feels unloved by the bankers that he helped rescue and reportedly took extra care not to punish after the financial crisis.
It could well be that Geithner just doesn't want a revolving-door Wall Street job. But it is also doubtful that his rift with the banking industry is as deep as he lets on -- or at least it shouldn't be. Geithner has overseen a prolonged, lucrative industry bailout with few strings attached.
Geithner has been giving a series of "exit interviews" before he rides off for a much-deserved break from four long years at Treasury, following a crisis-era stint as head of the New York Federal Reserve. In most of these interviews he has admitted that his crisis-era actions were not politically popular because they didn't seem to go far enough to hold Wall Street accountable for the excesses that led to the crisis. But he sighs that there just isn't much he can do about that.
“This is a deeply complicated world, in a fog of gray and ambiguity,” he told New York. “It’s easier for people to absorb the simple narrative of the black and white. And for them the black and white is, ‘Those are the people that got us in the mess; you saved them and they paid themselves billions in bonuses, and they should have gone to jail, and they are still walking around.’ I don’t know anything powerful enough to overwhelm that simple narrative.”
Perhaps to help overwhelm that simple narrative, Geithner has been pushing a competing one: That he is, if not Wall Street's worst nightmare, at least an unpleasant dream. An interview with the Washington Post seemed especially designed to burnish Geithner's image as a tough guy, leading off with an episode in which he declared "F**k the banks" in response to news that banks were resisting financial reform. That interview also mentions that he called bankers "whiners" and annoyed JPMorgan Chase CEO Jamie Dimon by not taking his advice on how to reform the system.
No wonder he doesn't expect to go to work for Wall Street!
But these anecdotes -- all from anonymous sources -- stand in contrast to most other accounts of Geithner's approach to the banks during the crisis. Sheila Bair, former chairman of the Federal Deposit Insurance Company, in her book, "Bull By The Horns," repeatedly accuses Geithner of going out of his way to cater to the needs of banks, particularly Citigroup. According to Bair, Geithner seemed to believe that penalizing banks too much for their bailouts might destabilize the financial system and hurt the economy.
Neil Barofsky, former watchdog for the Troubled Asset Relief Program, the broad crisis-era bailout for Wall Street, AIG and General Motors, makes similar accusations in his book, "Bailout." Barofsky says Geithner's Treasury Department doggedly fought efforts to hold Wall Street accountable for how it was using its bailout money. In the fall of 2009, Geithner told Barofsky and other regulators, including Elizabeth Warren, then head of a congressional panel overseeing TARP, that the Treasury Department's oft-derided mortgage-modification program, HAMP, was designed more to "foam the runway" for banks than to help struggling homeowners.
Geithner and the rest of the Obama administration reportedly feared creating a "moral hazard" by bailing out struggling homeowners too freely, but according to Bair's and Barofksy's accounts, Geithner showed little such compunction when it came to Wall Street banks.
Geithner is correct when he says that Wall Street is angry at him and at President Obama for the Dodd-Frank financial-reform law, which is designed to curb banks' worst excesses and prevent another crisis. At the same time, banks have managed to turn record profits despite Dodd-Frank, and have spent a lot of that money lobbying to water down and delay Dodd-Frank as much as possible. They have whined early and often about taking the blame for the crisis and warned that restricting their activities too much could hurt the broader economy.
For whatever good Geithner did in his term, he also bears some responsibility for banks keeping up that bogus defense and fighting reform. Their hubris has only been encouraged by the choices Geithner made.