This Week' Transcript: Timothy Geithner
Treasury Secretary Timothy Geithner on "This Week with George Stephanopoulos"
GEITHNER: George, we came into this crisis as a country without the tools necessary to contain the damage of a financial crisis like this. In a case of a large, complex institution like AIG, the government has no ability, had no meaningful ability to come in early to help contain the fire, contain the damage, prevent the spread of that fire. Restructure the firm, change contracts where necessary, and helped make sure that the financial system gets through this...Huh? They got TARP from Congress in about two weeks. Any authority they wanted could have been enacted in that bill. They chose to enact a massive privatization of control of government regulatory and financial authority--what Matt Taibbi calls "The Big Takeover" in his recent Rolling Stone piece--rather than the other way around where the public would take over and resolve bankrupt private entities.
STEPHANOPOULOS: But it would have been the right thing to do, right?
GEITHNER: If we had the legal authority, that's what we would have done. But without that legal authority, we had no good choices. We were caught between these terrible choices of letting Lehman fail -- and you saw the catastrophic damage that caused to the financial system -- or coming in and putting huge amounts of taxpayer dollars at risk, like we did at AIG, to keep the thing going, unwind it slowly at less damage to the ultimate economy and taxpayer.
This constitutes a hosing of the public. The last person on Earth who needs even more authority is Timothy Geithner.
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