Geithner kept his cool amid tumultuous tenure at Treasury

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Posted: Sunday, January 13, 2013 12:00 am

WASHINGTON — The nation’s Treasury secretary, Timothy Geithner, soon will leave the department he joined more than two decades ago and re-enter private life for the first time since he was in his 20s.

Looking forward, Geithner has no plans. A regulator of Wall Street but not a creature of it, he will probably be the least likely former Treasury secretary to land there. “I’m going to take a long time,” he said in a recent interview.

Looking back, he is remarkably sanguine. He does not feel he would have made any decisions differently: Policy choices available were far from ideal, he said, but his team did the best it could within the realm of the politically possible. “It was a very bad crisis. No playbook. No road map. No clear precedent. If we had a different set of constraints, particularly in fiscal policy, then I think that the economic outcome could have been modestly better.”

A sense of the weight of those constraints emerged in the brief remarks Geithner made Thursday, as Obama thanked him for his service. While describing the “compelling and rewarding work” of government, he mentioned the “divisive state of our political system.”

In recent interviews, Geithner, 51, returned to the idea that the Treasury and the Obama administration might have done more if they had been given more latitude by Congress.

“The way our country is structured, by design, the Founders left the Congress with all the meaningful authorities to determine the path of the economy and what you could do in a crisis,” he said, mentioning how hard the White House had pushed for more authority. “The scale of the fiscal response in particular was dependent” on what Congress would allow.

Geithner ran the Treasury during the tumultuous years of the financial crisis and a recession that slowly gave way to a recovery, albeit an unsteady one. As president of the Federal Reserve Bank of New York before he joined Obama’s Cabinet in 2009, he was at the center of the most nerve-racking moments of the banking crisis. And his low-key but forceful insistence kept the Treasury at the center of every major economic policy decision of Obama’s first term, aside from the health care overhaul.

By a combination of historical accident and his own design, Geithner will go down as one of the most influential Treasury secretaries, alongside figures like Robert Rubin, who served under President Bill Clinton, and Henry Morgenthau Jr., who served under President Franklin D. Roosevelt.

But he has not always been a popular one. Both Republicans and Democrats have accused him of subverting capitalism and dedicating taxpayer money to “too big to fail” institutions in perpetuity. The left has criticized him for helping “fat cat” bankers instead of regular people.

Still, he has attained something like a first-among-equals stature at the White House. His word and policy judgments have prevailed in fight after fight.

“He went from someone who people were unsure of in the first six months to achieving the elevated status of being the guy who made the toughest and loneliest calls at the most politically perilous moments — and turned out to be right,” said Gene Sperling, director of the National Economic Council.

In many ways, his colleagues said, Geithner’s job seemed at times to be that of a firefighter or, at its worst moments, a glorified janitor. His four years were filled with a series of crises: the collapse of the financial system, spiraling unemployment, the cratering housing market, the financial reform bill, the ailing auto industry, the European debt crisis, a debt ceiling standoff and two protracted budget negotiations.

“He is so serene in good times and in bad,” said Michael Froman, a deputy national security adviser who has known Geithner for two decades. Given a background fighting financial disasters abroad as a Treasury aide, Froman said, “I think he was better prepared than anyone to deal with these crises.”

He has struggled at times with the outward-facing role of the Treasury secretary. But within the White House, his technocratic chops and no-drama attitude, as well as his calls on how to deal with the crisis, made him one of Obama’s most trusted aides. Though he is mostly known for his work on the financial crisis, he was also the White House’s main emissary to Europe on its debt crisis and spent hundreds of hours working on fiscal negotiations with Congress. During his tenure, he made 61 domestic trips and 37 international ones, and testified 67 times to congressional committees.

Asked directly how he viewed his tenure, Geithner shied away. “I kind of think that’s better for history to answer,” he said.

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