Treasury Secretary Tim Geithner is stepping down.Mr. Geithner served as Head of the New York Fed and U.S. Treasury Secretary during one of the most challenging economic periods in United States history: The 2007-2010 financial crisis.
During this period, the global stock markets tanked, many major financial institutions went bankrupt (and many others almost followed), the global economy plunged into the worst recession since the Great Depression, and the global financial system almost shut down.
The pressure on Mr. Geithner during this period, both as Head of the New York Fed and then as Treasury Secretary, was unfathomable.
In both roles, Mr. Geithner made many extremely important and controversial decisions. He made these decisions under extraordinary time pressure and political pressure, while under intense public scrutiny. Some of these decisions were immediately blasted, from both political and economic perspectives, with Mr. Geithner personally being torn to shreds for having made them.
Mr. Geithner, the critics roared, was way too soft on Wall Street, especially considering that Wall Street’s reckless lending had helped to bring about the crisis. And in the years since the crisis, as the economy has gradually nursed itself back to a reasonable state of health, many of Mr. Geithner’s decisions have continued to be second-guessed — including, quite vocally, by me.
But here’s the big picture:
The big picture is that the United States financial system and economy have recovered from near-disaster in 2008-2009. And the hyperinflation and dollar-crash and return to the stone age that many doomsayers predicted would follow have not come to pass.
Although it is hard to prove a “what if” scenario — and although Mr. Geithner certainly made mistakes — it seems safe to say that, broadly, Mr. Geithner’s policies and decisions worked.
We got through the crisis.
And in helping us get through the crisis, Mr. Geithner withstood an astounding amount of criticism, second-guessing, outrage, and ridicule. (In a fit of pique about yet another bank bailout, for example, I once deemed Mr. Geithner “God’s Gift To Wall Street.” I also called for him to resign.)
The definition of strong leadership is not about making decisions that are popular.
Making popular decisions is easy — you don’t need to be a leader to do that.
The definition of strong leadership is to make decisions that are unpopular, but are nevertheless sound.
In his roles as Head of the New York Fed and U.S. Treasury, Mr. Geithner made a lot of decisions that were immensely unpopular at the time. The course of history, however, has revealed that many of these decisions were sound.
Tim Geithner deserves a huge amount of credit for that.
So, well done, Tim Geithner! You helped our country get through the storm. And we all owe you our gratitude for that.