May 15th, 2014
08:45 PM ET

Geithner: Strategy wasn’t about picking Wall Street over Main Street

Fareed speaks with former U.S. Treasury Secretary Tim Geithner about the Obama administration’s response to the financial crisis. Watch the full interview on "Fareed Zakaria GPS," this Sunday at 10 a.m. and 1 p.m. ET on CNN

So the strategy that you adopted has often been criticized. It was criticized at the time and is criticized in retrospect as bailing out Wall Street at the expense of Main Street. What do you say?

It’s a common perception, and it's a completely understandable perception because what you had to do to protect the economy of the country – the average person running a business or just trying to keep their job – what you had to do to protect them in a classic financial panic feels deeply unfair.

It's completely counterintuitive. And that's because the central imperative then is to make sure you prevent the collapse of the system. You keep the lights on. You know, think of the banking system. We don't like to think of this way, but think of it as the power grid. It's like a vital, essential thing. And what you saw in the Great Depression and you saw in countries since then is that if you let panic escalate and that fire burn too, too strong, it's devastating.

You know, unemployment in the Great Depression went to 25 percent. Output fell by 25 percent. It took a decade to begin to heal the damage. So the counterintuitive thing, what feels really unfair but what's essential in a classic panic, is you have to act incredibly aggressively to make sure you prevent that loss of savings – that damage to the power grid. And that's what we did.

We didn’t do it because we had any interest in protecting people on Wall Street from the errors of their mistakes. We did it because it was the only way we could protect the average person from mass unemployment.

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Topics: Economy • GPS Show • United States

soundoff (23 Responses)
  1. chrissy

    What a load of BS!

    May 15, 2014 at 9:36 pm | Reply
  2. chrissy

    If they were sincere about mass unemployment and main street, they would bring the manufacturing jobs BACK to the US! And stop using OUR hard earned tax dollars to keep bailing everyone else out! No more funding for foreign countries militaries! That is the lamest thing our govt does!

    May 15, 2014 at 10:00 pm | Reply
  3. ✠RZ✠

    And Tim is living proof that it worked perfectly. Even he had no problems finding a good paying job. On Wall Street.

    May 15, 2014 at 10:02 pm | Reply
  4. chrissy

    Lmao @ RZ that was just priceless! Lol ty i needed that laugh!

    May 15, 2014 at 10:09 pm | Reply
    • ✠RZ✠

      But it's the truth!

      May 15, 2014 at 10:14 pm | Reply
      • ✠RZ✠

        The very, very, sad truth. They conned everyone into a long term war due to a rigged 911, and then they conned everyone into giving up all their money to the wealthy on account of a rigged financial collapse.

        May 15, 2014 at 10:27 pm |
  5. chrissy

    Lol and i believe you! Thats what makes it so priceless!

    May 15, 2014 at 10:26 pm | Reply
    • ✠RZ✠

      You see chri§§y, magic is real. They made the middle class disappear.

      May 15, 2014 at 10:31 pm | Reply
  6. chrissy

    Did you ever wonder why CONgress is the direct opposite of PROgress? Pure self adoration and of absolutely no use to the rest of this nation! And the biggest part of the bailout program that really ticks me off was the ones to the banks! Here ya good ole boyz go...heres some FREE money for y"all! And doncha worry none bout payin it back or where ya spent it! Good grief! They were the root cause of this recession by giving people home loans who shouldve never qualified in the first place...and then the govt pays em for doing it! Its like comedy central in DC!

    May 15, 2014 at 10:35 pm | Reply
    • ✠RZ✠

      Yep, ya just gotta wonder about the prefix attached to those prefects. And then what of our derpasstroll lately? Seems to have become nothing more than a pathetic INgress that will only REgress to further DIgress.

      May 16, 2014 at 8:08 am | Reply
  7. chrissy

    Lmao OMG @ RZ stop it! Lol

    May 15, 2014 at 10:37 pm | Reply
  8. chri§§y

    And @ RZ ive changed my user name cuz of you! Lol

    May 15, 2014 at 10:55 pm | Reply
  9. rupert

    My icon is prettier than either one of yours.

    May 16, 2014 at 1:05 am | Reply
  10. rupert

    Thank u cnn u make me feel special

    May 16, 2014 at 1:06 am | Reply
  11. stuart

    Oh?

    May 16, 2014 at 5:55 am | Reply
  12. stuart

    So cnn. U think u are cleaver. All I have to do is electronically white out the icon.
    And I will. In due time. All in due time.

    May 16, 2014 at 6:04 am | Reply
    • Yessssss

      Nice threat to hack CNN. Hope they arrest you again although Daddy's bribes will probably get you out. Again.

      May 16, 2014 at 12:15 pm | Reply
  13. chri§§y

    Lol @ RZ but those two squirely dudes before your last post ARE the derpasstroll also!

    May 16, 2014 at 8:43 am | Reply
  14. chri§§y

    Ok i spelled that wrong but you get my drift right?

    May 16, 2014 at 8:46 am | Reply
  15. chri§§y

    Squerelly i think?

    May 16, 2014 at 11:12 am | Reply
  16. The ENTIRE GOP PLATFORM in a single paragraph

    The GOP Prayer/Mantra/Solution: Dear God...With your loving kindness, help us to turn all the Old, Sick, Poor, Non-white, Non-christian, Female, and Gay people into slaves. Then, with your guidance and compassion, we will whip them until they are Young, Healthy, Rich, White, Christian, Male, and Straight. Or until they are dead. God...Grant us the knowledge to then turn them into Soylent Green to feed the military during the next "unfunded/off-the-books" war. God...Give us the strength during our speeches to repeatedly yell........TAX CUTS FOR THE RICH!!!..........and........GET RID OF SS AND MEDICARE!!!
    In your name we prey (purposely misspelled, or is it?)........Amen

    May 16, 2014 at 11:21 am | Reply
  17. Li Tai Fang

    Deep down, you know it's true.
    You may hate your banks, but you'll really hate your government when your bank is allowed to disappear tomorrow.
    Tried that during the Great Depression. We know the history.
    Almost tried it again with Lehman Brothers. Another near-collapse.

    May 16, 2014 at 1:57 pm | Reply
  18. dont understand

    What we want to see, is those responsible for the collapse go to jail.

    May 26, 2014 at 9:52 pm | Reply

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