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Carol Felsenthal
On politics

Geithner’s New Memoir Shows Rahm’s Role in Saving America’s Economy

In his new memoir, Stress Test: Reflections on Financial Crises, the former treasury secretary portrays Rahm Emanuel as the key political player in a White House on the brink of economic meltdown.

Timothy Geithner addressing the Economic Club of Chicago in 2012. Photo: MICHAEL TERCHA / Chicago Tribune

In his new memoir, Stress Test: Reflections on Financial Crises, former treasury secretary Tim Geithner portrays Rahm Emanuel as the key political player in the White House and at his most hyper and controlling as the economy, in 2009, slipped deeper into recession and teetered on a second Great Depression.

Rahm pops off the page, while Bill Daley— his successor as Barack Obama’s chief of staff, after Rahm leaves to run for mayor of Chicago—fades into the furniture.

Geithner, 52, who once said that Rahm “needed his mouth washed out with soap even more than I did,” describes Obama’s first COS as bursting with energy and profanity. In one exchange shortly before he left Congress for the White House, Rahm calls Geithner with “…a great fucking idea.” Geithner responds that it’s “a terrible fucking idea,” and “Rahm let me know I was an idiot.”

Rahm, and David Axelrod too, held firm against calls for Geithner’s head when irregularities in his 2001 and 2002 tax returns were revealed. (The former head of the New York Federal Reserve blamed TurboTax which he had used in calculating what he owed.) When Geithner suggests he drop out of the pending treasury secretary confirmation hearings so as not to embarrass the president and hold up a transfusion for a seemingly terminally ill economy, Rahm assured Geithner, “You’re going to be fine,” but then added, “They just want to cut you and make you bleed.”

Another time, Geithner writes, when “’embattled’ seemed to be part of my official title,” Rahm told Geithner he “wouldn’t be allowed to escape that quickly—but that when I did escape, I should probably expect my official treasury portrait to be done in crayon.”

At one point, Geithner tells Rahm that he has decided to hire a deputy, Neal Wolin. This was a man who had worked at the CIA, been general counsel to the Treasury department during the Clinton years, run a major insurance firm, and then worked in the Obama White House as a deputy counsel. When he heard the news, Rahm immediately called Wolin and ordered him “…to get the fuck over to Treasury to help [Geithner].”

Once Wolin is in place, at a meeting in Rahm’s office in March 2009, the discussion is on drafting a key piece of legislation before the G-20 summit in London that April. Wolin argues that there was not enough time to draft the bill, which was complex and would run several-hundred-pages. “Rahm pointed to a desk with a computer. `Sit the fuck down and start typing. And don’t get up until you’re finished.’”

Once Rahm leaves, Geithner writes, “The White House would be a very different place without Rahm, whose energy and drive had set the rhythm of our first two years.”

In 2011, Geithner, vilified on many counts, but especially on TARP (Troubled Asset Relief Program) that gave $700 billion in taxpayer dollars to bail out the big banks, is still trying to quit. (He ended up staying for four years.) He detests Washington, longs to return to New York (the suburb of Larchmont) to be with his wife and children. He’s full of guilt about the toll the harsh, unrelenting criticism of his performance is having on his family. Geithner had urged his wife, Carole, to avoid reading the news—The Daily Kos ran one story titled “Why Tim Geithner Should Go to Jail”– but she did anyway, and she “took the constant attacks on me personally. At one point, David Axelrod called her to thank her for her sacrifice.”

Geithner recalls that Bill Daley “used to joke about making me wear an ankle bracelet.” Daley, for all the brevity of his role in the book, does come off as having an impressively sharp and mordant sense of humor.

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