I know that I harp on this a lot, but it’s something that I think people need to be reminded of, because it’s one of those things that doesn’t get a lot of press. So here goes:

The bailout worked.  The stress tests worked.  Tim Geithner did a good job.

There’s a good article in The New Yorker this week making this case, and it also does a good job of highlighting how politically repugnant this entire process was:

In the history of product launches, the rollout of the Obama Administration’s plan to stabilize the financial system was in the category of “Ishtar,” smokeless cigarettes, and New Coke.

The bottom line, though, is that these policies were a smashing success.  Banks are more capitalized than they’ve been in over 70 years, GDP is growing, and at the end of the day, the federal government will be out only 117 billion dollars, most of which didn’t even go to Wall Street (*cough* GM *cough*).

I could end up quoting this article all day, so you should just go read it, but I particularly liked the closing line from Geithner himself:

“Why do policymakers screw up financial crises?” he said before I left his office. “They screw up financial crises because the politics are horrible, and that deters action. They are slow and late and tentative and weak because they are scared to death of the politics. But sometimes a policymaker has to say, I’ll take pain now against pain later.”

There’s at least one adult in Washington, and his name is Timothy Franz Geithner.

Tags: bailout, economics, Timothy Geithner, Treasury Department

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