The Cautious Optimism of Timothy Geithner
United States Treasury Secretary Timothy Geithner will be leaving for greener pastures on January 25. Geithner has been looking to leave his post for a while, but has delayed an exit because of the tremendous fiscal problems facing the country. First it was the fiscal cliff, and now it’s the debt ceiling, which has become politically tied to the half of the fiscal cliff that has yet to be resolved: the sequester.
At the end of the day, Geithner will probably be most remembered for his contribution to the discussion on “too big to fail” financial institutions. Previously the president of the Federal Reserve Bank of New York, Geithner served as Treasury Secretary in the fallout of the 2008 financial crisis, assuming the title from Henry Paulson.
Paulson’s place in history is punctuated by overly-optimistic and perhaps short-sighted claims in 2008, as the financial collapse began, that America had a “safe banking system, a sound banking system. Our regulators are on top of it. This is a very manageable situation.” In retrospect, as a former CEO of Goldman Sachs (NYSE:GS), Paulson’s view may have been biased.
But Geithner’s term as Secretary marked a total reversal in oversight, and came loaded with unprecedented action. Geithner’s strategy to avoid total financial collapse now seems to be working, in the long run, but there’s no doubt that things could have gone better. In an interview with the Wall Street Journal on January 17, Geithner was asked if, looking back now, there was anything he would have done differently.