Timothy Geithner on his "terrifying days" at Treasury

"The buck stops here" describes the job of Secretary of the Treasury to a "T," as former Secretary Timothy Geithner knew it. Anthony Mason sat him down this past week for some Questions-and-Answers:

When Timothy Geithner was offered the position of Treasury Secretary in 2008, he understood it would not win him any popularity contests: "I was pretty confident it was a no-win job," he laughed.

He would help navigate the worst financial crisis since the Great Depression. Geithner, to some, became a hero who saved the economy; to others, the villain who rewarded the banks.

Mason asked, "What would you say your worst day in the financial crisis was?"

"I had a lot of bad days. I had a lot of terrifying days."

For six years -- first as head of the New York Federal Reserve, then as Treasury Secretary -- Geithner would confront a series of rolling crises: the rescue of Bear Stearns, the collapse of Lehman Brothers, a spreading panic in the stock markets.

"Did you feel like you were, you know, the kid at the dike plugging a finger in one hole after another?" asked Mason.

"I tell the story that I went to see Paul Volcker on Saturday of the Bear Stearns weekend, and I walked into his apartment 'cause I wanted to tell him where we were. And he said, 'How's your finger?' I didn't know what he was talking about. But he was referring to the finger in the dike."

In his first television interview since leaving the Treasury last year, Geithner acknowledged he had not always made his case well.

"There were a lot of communications issues," said Mason.

"'Issues' is a nice way to put it," Geithner said.

"What would you call them?"

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Crown
"I mean, how about failures?"

In his new memoir, "Stress Test," he tries to set the record straight:

"I think a lot of people still feel the banks should have been made to pay in some way, either in terms of restructuring, in less executive compensation, in some cases people should have gone to jail," said Mason.

"I think everybody feels that way," said Geithner. "And I think that's a totally understandable perception."

"But do you feel that way?"

"Well, you know, I feel like it's a complicated thing. You know, there was a terrible amount of abuse and fraud and bad behavior, and damaging and dumb things that people did in the crisis. And I think Americans definitely deserved a stronger enforcement response."

"But I want to know what you think. You saw this up-close better than anybody. Does it surprise you nobody went to jail?"

"It doesn't surprise me no one went to jail," said Geithner. "It doesn't surprise me."

What may have been immoral or unethical, he says, was not illegal.

Geithner has often been accused of being too cozy with Wall Street. A myth even developed that he'd once worked for Goldman Sachs.

A career public servant, he'd taken only a single Economics class at Dartmouth.