Stress Test: Reflections on Financial Crises by Timothy F. GeithnerMy rating: 5 of 5 stars
A lot of people hate Tim Geithner, thinking he was the man who put Wall Street ahead of Main Street during the Great Recession. His memoir tries to lay out why they are mistaken and convincing makes the case that his actions, along with Bush and Obama administration officials prevented the worst economic depression in history.
Regardless of what you think about the man, this is an important book as it lays out why and how decisions were made (and early on they were making up as the went along) and why the approach taken was the best of only a couple horrible options.
Tim Geithner grew up overseas and in U.S as his father worked in foreign aid. He went to Dartmouth. He started career as civil servant in treasury department. He quickly gained recognition and responsibility under Bush I and Clinton administrations.
Amazing enough he is not an trained economist but started his career a government GS-13 in the treasury department international division.
The book starts with a whirlwind tour of the Mexican and Asian financial crisis during the Clinton administration and is very dense. But this was where he cut his teeth in economic crisis management.
He was next hired by the federal reserve bank of New York. While there he recognized the trouble spots of the too big to fail banks but assumed nothing he could do about them.
As treasury secretary was probably thin on credentials for the job and most assuredly tarnished by the bailouts of 2008. His stress test plan was a shit sandwich - hated by both left and right - but he makes a good argument that the alternatives, and their were few, were worse. Amazingly it worked but neither he or Obama get any credit for it.
Overall he is happy with Dodd-frank financial reform. But says while there is more that needs to be done, there is no political will to do it. Implies that the shortcomings will have to be fixed on the fly when the next crisis happens.
The end of the book is a primer on comic crisis management that is likely to be required reading for economists and financiers of the future.
Overall this is well written and compelling book by probably the most important cabinet secretary in President Obama's first term.
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