Wednesday, May 28, 2014

Geithner: A Pronouncement

We're back from socialist hell Paris where, I have to say, life seemed not  bit different the day after Marine Le Pen's 25-percent landslide than it did before.  Which means back to decent computer hardware (I'm in love with my iPad mini but as a blogging tool, it really doesn't have the chops).

I do have a few afterthoughts about France that i hope to post over the next few days but for the moment,  a word about Tim Geithner's memoir.  He's certainly receiving a lot of attention, most (not all) from those who want to tie him to an anthill and cover him with honey.  I can relate: I went into the book expecting to dislike him and--

--and, well, I still can't say I really want to sit down and have a beer with the guy.  Nor he with me either, I suppose, but I'm not that crazy about beer anyway.

Thing is, though, it is actually quite good book.  I'm sure there are some self-delusions and some careless errors. But for the most part, it's what you want in a memoir: detailed, intellectually honest, fact-driven record of how and why he did what he did.   He's also refreshing on his likes--Barney Frank, President Obama and lots of other people, really (there are many appreciative comments about his staff).  Also his dislikes--Neil Barofsky and perhaps Ed DeMarco; after that, really not much of anybody.  But no, not Elizabeth Warren--he seems to think she grandstanded him, but in the end, he seems to have enjoyed her company (I can believe both).  And not Sheila Bair, whom he treats with respect, although I'm still not sure he takes her as serious as she deserves to be taken.

I liked the book; this is not the same as saying I'm endorsing the message.  Let's agree that we've pretty much simplified the conflict over policy in recession management down to a sound byte question: bankers or homeowners, Wall Street or Main Street (or both, or perhaps even neither)?  Geithner's clear: he thinks saving the banks was unambiguously right.  He thinks his crowd got the tactics/strategy mostly right, although he certainly is willing to offer up regrets about particulars.  He thinks it is/was important to save Main Street also but that's the thing--he thinks they did do a lot to save Main Street.  He also thinks they did do a lot to help home owners. He would have liked to do more (damn that DeMarco anyway)--although he appears not to give home owner relief the same high priority as many of his critics.

I have to admit, I'm still on the fence on that one.  I'm still hung up on the great counter-factual: what would have happened had we not saved the banks?  And that is the great counter-factual: we don not and cannot know.   I gather there are people--Ludwig von Mises, Dean Baker, who say "let it burn."  And we can't prove they're wrong. And never will, either, because I can't imagine a world in which the political elite will have the will to do nothing while the banking system collapses around them.   I'm on the fence also because just today on the plane, I read what must be the most useful intelligent, thought-provoking challenges on the Geithner (etc.) program that I've seen so far.  I hope to say a word about that reading tomorrow  Meanwhile: agree with him or not, I think Geithner's book will endure as one of the indispensable primary-source documents of the whole sorry business.


marcel said...

... because I can't imagine a world in which the political elite will have the will to do nothing while the banking system collapses around them.

Think back (I know, it was before your time, but anyway) to the Old Deal, early 1930s America, and Herbert Hoover and Andrew Mellon.

Buce said...

Ah, but that's the thing. Hoover did do stuff. He may not have done it right, or enough, or with sufficient brio to catch the popular imagination but he knew he couldn't sit still (brio, by the way, seems to have been Roosevelt's most important contribution, not so?) Mellon, by contrast, was becoming more and more of a political irrelevance.