Among the charges leveled against him:
- he shouldn't have bailed out AIG,
- he shouldn't have allowed the bailout money to be funneled to AIG's counterparties in those complex credit default swaps transactions,
- and - the latest - that he told AIG not to talk about who got the money.
AIG, with trillions of dollars in exposure, hit with belated downgrades from rating agencies and squeezed by calls for collateral, was the biggest domino of all, and it might have taken a lot of others down with it, including some major banks. Goldman has maintained that it would have survived. But it didn't turn down that $13 billion check from AIG or government assistance from the TARP fund.
So did Geithner get it wrong? Certainly the implication that he tried to hush up the funds that passed between AIG and the investment banks makes him look bad, even though a Treasury Department spokeswoman tells Bloomberg News he was no longer involved at that point. But, apart from personalities, was it a wise decision at a time when the stock market was tumbling more than 700 points a day and even bulls like CNBC's Jim Cramer screamed, "Sell!"
Congressmen and journalists will continue to demand a better explanation. But obviously Geithner already provided one when he was vetted for the job by President Obama, who has always expressed "full confidence" in his Treasury Secretary. And, if you listen closely, you will still hear that echo from the White House.
Perhaps Geithner and Obama understand something that historians will only learn 50 years from now: just how close AIG brought the U.S. - and the world - to a financial meltdown. And why distasteful acts like paying off Goldman Sachs, and then keeping quiet about it, were necessary.