NEW YORK (MainStreet) — Breakfast was over when former Treasury Secretary Tim Geithner arrived on the dais for a press event at Thomson Reuters' Times Square headquarters last Friday. It was part book tour, part image makeover, coming on the heels of Stress Test, Reflections on Financial Crisis, his recently released tome. He was interviewed by Thomson Reuters editor-at-large Sir Harold Evans.

Geithner likes a lot of what he sees in the post-2008 economy while there's a lot he doesn't. On the Dodd-Frank Act, the 2010 law designed to overhaul the financial services industry: "It's a sweeping, messy piece of legislation passed in a populist moment. It's got a lot in it to criticize."

But he wasn't entirely dismissive. He said the core of the reforms are powerful and well-designed, and that we have completely chanced consumer protection for the better.

"Capital requirements are dramatically more conservative," he said, and more demanding than those in Europe.

And yet unemployment remains at unacceptable levels while the real estate market is still fraught. "No one should be satisfied with where the economy is today."

Throughout the crisis, Geithner credited his family with keeping him grounded. His thinks colleagues were fabulous; former Fed chair Ben Bernanke; his Treasury predecessor Hank Paulson, for whom he has "the greatest admiration"; Barack Obama and others. He called Lawrence Summers, former director of Obama's National Economic Council, "a national treasure."

Geithner took questions from the peanut gallery, written out on 3 x 5 index cards that were read to him by a Thomson Reuters editor. The last question: As a young person who recently joined the financial services industry, what advice would you give to students on how to succeed in this industry?

Geithner's answer in part was: "I'm the wrong person to ask. I've spent most of my professional life as a civil servant."

It was a contradiction he embraced before as he sought to portray himself at times as an outsider, who had the Treasury job thrust on him while telling a story that only an insider would know. "I didn't seek these jobs," he said. "They weren't my idea. I tried to talk the president out of it."

But the civil service cloak sometimes fell from his shoulders and when it did, this reluctant emperor was wearing different clothes. As the de facto CEO of the entire U.S. banking system—or co-CEO, along with Fed chief Ben Bernanke and former Treasury secretary Hank Paulson—who were his constituents? The American taxpayers or the banks?

Evans's desultory line of questioning eventually got around to federal bailout money that went to the upper management of firms when he asked, with nothing in the way of a preface: "And you winced when AIG (American Insurance Group) gave those bonuses?"

"Wince is a polite way to put it," Geithner replied. Allowing AIG personnel to have bonuses, he said, "was a terrible, terrible thing."

Evans didn't specifically identify which bonuses he was referring to, but they almost certainly were the ones that surfaced in March 2009, when it was publicly disclosed that AIG was going to pay about $218 million in bonuses to staffers in the AIG financial services division—a number that was expected go higher. Insurer AIG saw the value of its credit default swaps plunge in September 2008, leading to an $85 billion Fed secured credit facility that became the largest government bailout in U.S. history. It was paid back 2012.

Former Senator Chris Dodd (D-Conn.) was called out for including a clause in the Dodd-Frank Act that exempted bonuses from executive pay caps for people in companies that got bailout cash from the >Troubled Assets Relief Program (TARP). But a January 14, the 2009 Wall Street Journal story, "Bankers Face Strict New Pay Cap," reported that a retroactive limit to bonus compensation was inserted by Dodd into the TARP bill that passed in the Senate.

That's when Geithner and Larry Summers went into action. According the the the Journal, they asked Dodd to reconsider. Dodd's provision was dropped and replaced by the bonus and executive pay exemptions Geithner and Summers wanted.

"We were able at least to design, I believe, a very effective rescue of the economy," Geithner said at one point, "but we lost the country doing it."

Could Geithner & Co. have bought some good will from Main Street if they had put a cap on the executive comp—salaries and bonuses—drawn down at jammed up firms that were bailed out by the Feds? If signing off on the AIG bonuses was a "terrible, terrible thing," why head down that slippery slope to begin with?

There was a precedent for this elsewhere, even at AIG, where outgoing CEO Robert Willumstad rejected a $22 million severance deal in 2008 and his successor, Ed Liddy, agreed to work for $1 a year. So did executive vice president of AIG financial products Ed DeSantis, who resigned in disgust to criticism from all sides. The Treasury could have brought some order to this turmoil, where some people were working for a dollar one year while others were getting bonuses the next by saying: since taxpayers donated their money, you have to sacrifice. If you're good, you'll get it back when you show a profit.

In February 2009, Vikram Pandit, CEO of Citigroup, told congress that his salary should be $1 per year with no bonus "until we return to profitability." Pandit had already gotten paid when he and his associates sold Old Lane Partners, a hedge fund he co-founded to Citigroup CEO Chuck Prince. His share was about $165 million plus a Citi gig. Citi was forced to shutter Old Lane a year later. Prince resigned from Citigroup in 2007 as the mortgage market began to crater, replaced by Pandit and former Treasury secretary Robert Rubin. Many thought that Citigroup, which received $45 billion in federal bailout, was virtually insolvent during the financial crisis.

Pandit's salary broke the buck in 2011, when it rose to $1.75 million after Citigroup reported its first full-year profit since 2007.

The argument favoring taxpayer financed comp was that key personnel would flee unless Treasury showed them the money. But how employable would they have been, having run their companies into the ground in an industry that was then contracting?

Geithner is not the first to pivot from the public to the private sector. But his future colleagues on mahogany row probably don't look kindly on civil servants who sell out their future brethren by capping compensation, whether the make good has to come from the taxpayer or somewhere else.

Geithner is now president of the New York-based private equity/leveraged buyout firm Warburg Pincus. With $35 billion in assets, it's a fraction of the size of the Big Four banks—Bank of America, Chase, Citigroup, and Wells Fargo—or the former Big Five investment banks. Former investment banks Goldman Sachs and Morgan Stanley became bank holding companies and their primary regulator is the New York Fed, not the Securities and Exchange Commission as was the case before September 2008.

Merrill Lynch got hitched to Bank of America. Bear Stearns and

Lehman Brothers don't exist.

--Written by John Sandman for MainStreet