NEW YORK (MainStreet) Timothy Geithner's upcoming memoir finally has a title: the former Treasury Secretary's Stress Test will go on sale May 13, joining the numerous other chronicles of the financial crisis written by participants in and observers of the Wall Street-Washington nexus.
In finance, a stress test is a procedure to evaluate the strength of a bank's balance sheet, determining how it would perform under crisis conditions. The Federal Reserve carried out several post-crisis stress tests of the country's leading financial institutions during Geithner's time at Treasury; these analyses got lots of attention as gauges of the system's health shortly after a near-death experience. As the title of a memoir, however, this technical term assumes a personal significance. Geithner seems likely to present his tenure as a time of exceptionally difficult choices, when policymakers did the right things overall but were rewarded with skepticism and public scorn. "We made mistakes, it was messy, and the damage was devastating and long-lasting," he said in a statement accompanying his publisher's announcement. "And yet, at the moments of most extreme peril, the United States was able to design and execute a remarkably effective strategy."
"We saved the economy from a failing financial system," Geithner concludes, "though we lost the country doing it." Of course, what galls critics of the government's "remarkably effective strategy" is the disparity between the post-crisis fortunes of the financial sector and those of the real economy. As of last month, three and a half years after the official start of the recovery, about half of U.S. counties were still below their pre-recession levels of economic output; by the first quarter of 2012, Wall Street earnings were at record levels. So people outside of finance might not be especially receptive to Geithner's message of essential economic success, to say nothing of the occasional note of self-pity he sounds when describing what it was like to administer the bailout-heavy government response: "You look like you're giving aid to the arsonist," he told the Wall Street Journal about the perception of his role. (Associated Press reporter Tom Raum seems to have correctly predicted Geithner's experience when he wrote in fall 2008, "In an economic crisis, as now, [Treasury Secretary] can be one of the most powerful and stressful jobs in the government.")