In a new book about the 2008-09 financial crisis, former FDIC Chairwoman Sheila Bair calls Treasury Secretary Tim Geithner “bailouter in chief.”
In other words, Geithner, who began the crisis as president of the New York Fed, was a tool of the nation’s biggest banks. "I think he viewed the problems through the prism of the large financial institutions, particularly Citigroup,” Bair tells CNBC.
“His world view was if you help them out of their troubles, you're going to help out the economy. I wanted to impose some market accountability.”
Editor's Note: You Deserve to Know What Obama and Bernanke Are Hiding From Americans
Bair wanted stock and bond holders to pay for banks’ sins. “There was just a philosophic disagreement throughout my tenure," says the author of “Bull by the Horns.”
Some of the assistance that went to banks should have gone to homeowners instead, Bair maintains.
“We didn’t help homeowners, we didn’t tackle mortgages the way we should have. We never cleaned up bank balance sheets, which continue to be a drag on the economy.”
So, the bailouts ended up fostering “the horrible public cynicism toward Washington and large financial institutions and this perception that the game is rigged,” Bair says.
In an interview at the Clinton Global Initiative, Geithner said he has no interest in responding to Bair and other critics with a book of his own.
"A lot of people are telling my story [for me]," he said with a laugh.
Editor's Note: You Deserve to Know What Obama and Bernanke Are Hiding From Americans
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