In titling his memoir Stress Test former Secretary of the Treasury Tim Geithner said more than he knows.
Because it's in times of adversity, rather than in good times, that a man shows his true character.
By that measure Geithner failed.
And so has the financial system in general.
It is a rigged game. Not all the time of course, but in times of stress, the game is rigged for politicians and portfolio managers to reap the rewards while the rest of us get screwed.
In the 538 page book just published by Crown, Geithner writes about how he, an insider from Wall Street, saved Washington and Wall Street from financial doom with just his pen and his phone, while leaving Main Street to pick up the tab.
True, the financial system he claims to have rescued carries on, albeit for whom it carries on is still a question. But practically none of the systemic risk to taxpayers and the government in the financial services industry has been alleviated.
In fact, risk is more concentrated in fewer institutions than ever before.
And where previously the government only had a “moral” obligation-- that is an obligation undertaken because it's in the best interest of the country-- to save banks, today—thanks to Dodd-Frank banking “reform” the government has an actual legal obligation to save banks from poor management practices.
“Tim’s book will forever be the definitive work on what causes financial panics and what must be done to stem them when they occur,” gushes Warren Buffett.
And well he should gush.
Buffett himself helped write the bailout plan. And he helped himself to any profits that could be made off the backs of the taxpayers by trading in stocks using information his buddies Tim Geithner and previous Treasury Secretary Hank Paulson could give him about government commitments to financial bailouts.
It's been well documented here at TownhallFinance and in other places that Buffet made enormous profits with the help of Tim Geithner and Hank Paulson on the financial crisis of 2008.