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Geithner: “We Saved The Economy, Lost The Country”

Posted by Larry Doyle on February 26, 2014 7:01 AM |

Given the steady stream of platitudes put forth by many past and present political and financial figures in and around Washington, I find myself typically dismissing much of what is said as simply “more of the same.” In the process, I usually scan headlines and quickly move on to review news or issues that I find more meaningful.

Yesterday I paused, though, upon seeing a headline in The Wall Street Journal that caused me to want to look a little deeper. The headline, Geither: ‘We Saved The Economy . . . We Lost The Country.’  This I had to read.    

Perhaps not surprisingly, former Treasury Secretary Geithner is writing a book to be released this coming May entitled Stress Test: Reflections on Financial Crises. I will definitely read this book given Geithner’s position within the inner circle during the most challenging financial and economic crisis since the Great Depression. In his promotional preview, he offers the following:

The financial crisis was a stress test of our nation, an extreme real-time challenge of a democracy’s ability to act when the world needed creative, decisive, politically unpalatable action. At times, the failures of our political system imposed tragic constraints on our ability to make the crisis less damaging and the recovery stronger. We made mistakes, it was messy, and the damage was devastating and long-lasting. And yet, at the moments of most extreme peril, the United States was able to design and execute a remarkably effective strategy.

I will grant him the only thing worse than bailing out our banks would have been not bailing out our banks.

The small group of key policy makers worked together surprisingly well, arguing, agonizing, sometimes agreeing to disagree, but mostly trying to get the right answer and minimize the time wasted on bureaucratic conflict. We saved the economy from a failing financial system, though we lost the country doing it.

I find this last statement in the paragraph absolutely fascinating, and I give Geithner real credit for issuing it. Perhaps he may want to use this line as a hook for selling his book, but it is worth serious review.

I completely agree with him that those involved in making public policy and pursuing appropriate judicial actions since the onset of what I believe is our ongoing economic crisis have, in fact, lost the country in doing so. Given that Americans are an overwhelming forgiving people, how is it that those in Washington and by extension on Wall Street lost the country?

In my opinion, America will forgive but always wants meaningful accountability that only comes from revealing the truth. Geithner writes that he hopes his “book will help answer some of the questions that still linger about the crisis. Why did it happen, and how did we let it happen?”

I asked myself the very same questions prior to writing my own book.

I think there are many reasons why the crisis happened, with the common denominator being excessive greed on the part of many folks along the food chain that ran from the point of mortgage origination through Washington to Wall Street and back and forth in repeated fashion.

In regard to how did it happen, I eagerly await reading Geithner’s work to see if he will provide cover for those at the intersection of Wall Street and Washington charged with protecting the public interest.

There are few individuals in the world more well-positioned than Tim Geithner to expose the incestuous, if not corruptible, dynamic that defines the Wall Street-Washington relationship. I am not expecting Geithner would dare cross the likes of Robert Rubin, Hank Paulson, Stephen Friedman and so many more political and financial elites who have come to define the element that our nation now truly detests and identifies as the cabal that took our nation down and never paid a price for it.

We shall see.

Larry Doyle

Please order a hard copy or Kindle version of my book, In Bed with Wall Street: The Conspiracy Crippling Our Global Economy.

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The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

  • AuntyMM

    if we have “lost the country” it is not just wall street’s fault.

    it’s also citizens’ fault for allowing ourselves to stay addicted to fossil fuels for decades after jimmy carter suggested ‘the moral equivalent of war’ (www.constitution.org/wj/meow.htm), and our fault for allowing almost all our basic industrial capital to be exported while corporations were merging and monopolizing everything so they could exploit rather than compete.

    how to get out of this pickle? here are some constraints and some suggestions: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2222988

  • Peter Scannell

    The 55 minute meeting of the SEC in April of 2004 that lit the slow-fuse.

    Who said banksters don’t like
    new regulation?

    http://www.nytimes.com/2008/10/03/business/03sec.html?pagewanted=all

    “Agency’s ’04 Rule Let Banks Pile Up New Debt”

    “I’m very happy tosupport it,” said Commissioner Roel C. Campos, a former federal prosecutor andowner of a small radio broadcasting company from Houston, who then deadpanned: “And I keep my fingers crossed for the future.”

    Yeehaw!

  • Virginia51

    It should read – “We saved the banks and our own stock portfolios and screwed the nation”

  • WKG

    Eagerly awaiting whether Geithner will provide cover? I admire your sense of optimism.






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