Any objective look at Geithner’s actions in response to the financial crisis confirms that he would maximize his power on behalf of big banks, even if it meant going around his colleagues and his president. That included paying off AIG’s investment bank counter-parties at 100 percent instead of forcing a discount, or blocking Bair, the FDIC chair, from forcing higher capital rules on banks. Every action fit Geithner’s worldview: The financial system must be stabilized at all costs, as the only way to heal the economy so real people benefit. “We do not need to imagine that he was in the pocket of any one bank,” Adam Tooze wrote in the new book Crashed. “It was his commitment to the system that dictated that Citigroup should not be broken up.”
But this neglects the political implications of deploying massive resources to save Citigroup and Wall Street more broadly. Failing to hold anyone accountable for causing the Great Recession as the economy struggled to regain its footing generated significant public resentment, from the Tea Party on the right to Occupy Wall Street on the left. The same urgency and ingenuity was simply not adopted to save homeowners drowning in mortgage debt, which weighed down the overall recovery. Obama fired the CEO of GM, but no bank executive suffered for a moment. And people noticed.