The Warren vs. Geithner sparring match


When it comes to managing economic crisis, there’s a deep ideological divide between Timothy F. Geithner and Elizabeth Warren.

In his new book,“Stress Test, Reflections on Financial Crises,” Geithner, the former Treasury secretary, forcefully defends his side of the argument for why US taxpayers should bail out big financial institutions. What also comes across is how much Warren — the consumer activist lobbying to help the little guy — got under his Wall Street-sensitive skin.

It wasn’t just the substance of her advocacy. Her assertive style — some might call it “bossy” — bothered him. “Her criticisms were mostly unjustified, and her (Troubled Asset Relief Program) oversight hearings felt more like made-for-YouTube Inquisitions,” gripes Geithner in the book.

Review the clip of “Warren’s classic takedown of Geithner over TARP,” and it’s easy to see what irks him. As Warren questioned Geithner about the federal bailout program, she was serene, confident, probing — and clearly enjoying her YouTube moment. Geithner was none of the above. And his darting eyes, awkward delivery, and obvious irritation at her boldness live on for infinity.

You don’t do that to a member of the Great Men’s Club of Washington without paying a price.

Warren did pay a price for that and other transgressions, such as challenging Democrats in the Obama administration as forcefully as she challenged Republicans in the outgoing Bush administration.

She didn’t get to head the consumer watchdog agency she dreamt up and set up for President Obama. Geithner, among others, told Obama she could not be confirmed. As Obama explained it during one Oval Office visit detailed in her own book,“A Fighting Chance,” she made Republicans and bankers“very nervous.” On YouTube, she made Geithner nervous, too.

Ultimately, White House aides suggested she run for US Senate. What a favor to Warren that turned out to be. Not only did she escape Obama’s second-term slump: Today, she is Senator Warren of Massachusetts.

And here’s the irony for Democrats who now worry her populist views will drag the party too far left in 2016. As senator, she has established a national, independent power base, fueled by loyalists as passionate as Obama’s once were. It’d be difficult to imagine that same result for the head of the Consumer Financial Protection Bureau. (When did Richard Cordray, the former Ohio attorney general who did get the job, last make headlines? A Google search reveals the most recent Cordray-related news involves three top-ranking employees who were subpoenaed by a congressional panel looking into claims of pervasive racial and sexual discrimination at the consumer agency.)

Geithner doesn’t like Warren. But he does recognize her strengths. He describes her as “a thoughtful and passionate consumer advocate” with “a gift for explanation.” That gift is what makes Warren especially potent on the national stage.

For non-wonks, the 2007-2008 financial crisis and great recession that followed can be a confusing mix of acronyms and acrimony. One strand of the complicated narrative involves the bipartisan Congressional Oversight Panel, headed by Warren, which oversaw TARP, which purchased assets and equity from financial institutions like American International Group in order to save them — and, with them, the global economy, if you buy Geithner’s side of the argument.

Warren’s talents include the ability to make that story about the human beings left out of those rescue efforts. The system touted by Geithner bailed out the biggest banks when they screwed up but showed no mercy to the little guy who paid with his only asset, his home.

Warren’s book showcases her own dislike for Geithner’s style. Describing the site chosen by Geithner for a meeting between Treasury and TARP oversight personnel, she writes, “It looked like a room for kings to negotiate over who was going to get what colony. He had invited us here, and it felt as if he owned this big, powerful space and we were his guests, welcome as long as we behaved ourselves.”

By the end of that meeting, she also felt “as if one of us was standing on a snow-covered mountaintop and the other was crawling through Death Valley. Our views of the world — and the problems we saw — were that different.”

Geithner’s worldview landed him in the world of private equity finance. For now, Warren’s landed her in the Senate, where she has proven eloquent and tough enough to maximize that platform. That should make Republicans and bankers very nervous — and really annoy Geithner and everyone else who worked to sideline her.

Joan Vennochi is a columnist for The Boston Globe. She can be reached at

© 2013 The Boston Globe

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