Timothy Geithner

Former U.S. Treasury Secretary (2009-2013)

Tim Geithner
••• Photo by Alex Wong/Getty Images

Timothy F. Geithner was U.S. Treasury Secretary from January 2009 to January 2013. In November 2013, he became . This private equity firm invests in companies, makes them more profitable and then sells them. The investment capital usually comes from wealthy individuals and sovereign wealth funds. Geithner may assist in selecting companies to invest in. He may also help find additional investors for the fund. 

After his resignation, President Obama offered him the opportunity to replace Ben Bernanke as the Chairman of the Federal Reserve. Geithner turned him down. Instead, he is -- the same level as former President Bill Clinton. In the first six months, Geithner made $400,000.

Why Geithner Is Important to the U.S. Economy

The man filling the job of U.S. Treasury Secretary is important to the economy, no matter who he is. Geithner's history as New York Federal Reserve Chair, co-architect of the $700 billion bailout, and having a background in the International Monetary Fund means he has had a more important role than many. He is the only member of President Obama's initial economic team to remain until the end of Obama's first term. Geithner's experience meant a smooth transition for the Obama Administration in handling the financial crisis.

His prior tenure at the Treasury meant he understood currency markets and the impact of a declining dollar.

Geithner's first action after becoming Treasury Secretary was to announce the controversial $2 trillion Financial Stability Plan. He used funds from the Treasury's Troubled Asset Relief Program, as well as the Federal Reserve's Term Asset-Backed Securities Loan Facility, to seed a Public-Private Investment Program. In it, he asked banks to match funds to purchase subprime mortgages. But the banks didn't want to participate in taking on more bad debt. Others preferred to hold onto their toxic assets.

They opted to write them down over the course of years rather than taking an immediate loss.

In March, he was criticized for allowing AIG to pay out $165 million in bonuses to the same employees who caused the firm's $170 billion bailout with taxpayer dollars.

What Role Geithner Played in the 2008 Financial Crisis

Between 2003 and 2009, Geithner was the head of the Federal Reserve Bank of New York and Vice-Chairman of the Federal Open Market Committee. Geithner was very active in the efforts by the Treasury and Federal Reserve to intervene in the 2008 financial crisis. Geithner was intimately involved in the bailout of insurance company AIG, investment bank Bear Stearns, commercial bank Citigroup, and mortgage giants Fannie Mae and Freddie Mac. These were all companies that were so intricately involved in the world's financial markets that they were deemed too big to fail.

But, the mammoth investment bank, Lehman Brothers, went bankrupt despite attempts to rescue it. This kickstarted the financial crisis.

As Treasury Secretary, Geithner became manager of the same TARP fund he coauthored when he was Chairman of the New York Federal Reserve Bank. TARP was funded by the $700 billion bailout package approved by Congress in October 2008. It added liquidity to failing investment and commercial banks. Much of it has been paid back. TARP was also used to bail out automakers and provide mortgage assistance through the Home Affordable Refinance Program.

TARP was credited by the Congressional Oversight Panel as "stopping an economic panic.” The Congressional Budget Office though estimated that TARP ended up costing taxpayers $25 billion, a figure contested by the Treasury Secretary.

Geithner also . Many of them did not have his experience in global finance. Geithner gave them blueprints, including diagrams, to spur their economies. He explained the logic of markets to his counterparts. That stopped them from further pursuing austerity measures that only made things worse. He acted as intermediary between nations when needed.

Tax Evasion

almost didn't make it through the confirmation process to become Treasury Secretary. During the hearings, it came out that he neglected to pay tens of thousands of dollars in federal income taxes. Many pointed out this wouldn't set a good precedent for the head of the International Revenue Service. However, Geithner argued that many employees of the IMF, where he was a senior executive at the time, were confused about what they owed and neglected to pay the full amount. Most Senators approved of the job he did during the financial crisis.

They saw the tax shortfall as an oversight, not outright tax evasion.

Early Career

Geithner worked for the Department of Treasury between 1988 and 2003. He was Under Secretary for International Affairs from 1999 to 2001. He worked under Secretaries Robert Rubin and Lawrence Summers. He was chairman of the G-10’s Committee on Payment and Settlement Systems of the Bank for International Settlements, a member of the Council on Foreign Relations, and also a member of the Group of Thirty.

Before working for the Treasury and Federal Reserve, Geithner was director of the Policy Development and Review Department at the IMF from 2001 until 2003. He also worked for Kissinger Associates.

has a master's in International Economics and East Asian Studies from the Johns Hopkins School of Advanced International Studies. He has a B.A. in government and Asian studies from Dartmouth College. He has studied Japanese and Chinese and has lived in East Africa, India, Thailand, China, and Japan. A November 25, 2008 article published by The Australian, "Treasury's Next Chief No Rookie," further reveals that he was born in New York and attended high school in Bangkok, where his father worked as an Asia expert for The Ford Foundation.

He also spent part of his childhood in Zambia, Zimbabwe, and India.