If one man has born the brunt of the outrage over the Wall Street bailouts over the past 18 months, it’s Treasury Secretary Tim Geithner. But this criticism, says Mark Dow of Pharo Management, is wholly undeserved.
On the contrary, says Dow, Tim Geithner is a “hero.”
A former Treasury official himself, Mark Dow argues that Tim Geithner, Federal Reserve Chairman Ben Bernanke, former Treasury Secretary Hank Paulson, and the other folks who managed the bailouts did exactly the right thing. They saved the country and economy from collapse. They acted swiftly and prudently. They held their ground against widespread public fury about what they were doing. And even though, in the process, they saved some folks who didn’t deserve to be saved–Wall Street bankers who took too much risk and brought the economy to the brink–there was no other option. They did exactly what they had to do.
This, of course, is what Tim Geithner, Ben Bernanke, and others have been saying since the start of the crisis: We had to do it or the world would have ended. To say this argument has been met with widespread scepticism is an understatement: What Geithner and others “had to do,” appeared, from the outside, to be a heroic effort to use taxpayer money to save people and firms who were the last folks on earth to deserve it.
But Dow is persuasive. And he believes there was no other way out.
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