ASPEN – As former Treasury Secretary Timothy Geithner sat down for an interview at the Aspen Ideas Festival Thursday at 9 a.m., he may well have known that the Dow Jones industrial average was surging above 17,000 for the first time.
And he almost certainly had seen that morning’s announcement that 288,000 jobs had been created in June, pushing the U.S. unemployment rate down to 6.1 percent — the lowest level since September 2008.
The good economic news had to be satisfying for Geithner, who played a critical role in the federal government’s response to the 2008 financial crisis and the Great Recession.
On stage in Greenwald Pavillion with James Fallows of The Atlantic, Geithner told a story about the first conference call he was on with the newly-elected President Barack Obama, in 2008. The purpose of the call was to discuss the president’s economic agenda.
“I said, ‘You know you’re going to have to prevent a second Great Depression, nothing else is possible without that,’” Geithner said.
At the time, Geithner was the president of the Federal Reserve Bank of New York. He would become Treasury Secretary in January 2009.
Geithner said the actions eventually taken by President Obama, combined with the steps previously taken by President George W. Bush, worked.
“We were able to avoid the mistakes that most countries make in financial crisis, adopted a dramatically different strategy, [and] threw overwhelming force at a financial panic,” Geithner said. “We prevented a Great Depression. We got the economy growing again in six months. Remarkably quickly.”
Geithner acknowledged the difficulties of the economic recovery, including weak economic growth, high unemployment and high rates of poverty.
But, he said if Congress had allowed for more aggressive spending, the recovery would have been quicker and more robust. Instead, Congress opted for “premature austerity” in an effort to reduce the national debt.
And he pointed out that the money injected into the financial system to “keep the lights on” after the crash was now expected to return $100 to $200 billion to the U.S. Treasury.
Geithner said he found President Obama to be a “tremendously impressive decision maker, in all the right ways.”
“He was willing to take risks,” Geithner said of Obama. “He was willing to do things that are deeply unpopular. He was willing to let the merits be the biggest factor in judging what we should do.”
In response to a question from Fallows, Geithner said that personally, for him, managing the financial crisis “was terrifying and hard.”
“There were so many times where I didn’t know what we could do,” Geithner said. “And I wasn’t sure we could do enough.”
Madame Secretary
At noon on Thursday, Aspen Institute President and CEO Walter Isaacson interviewed Commerce Secretary Penny Pritzker and opened by noting the day’s good job numbers and stock market record.
“Are we really now in a period where we can feel that the economy is booming again?” Isaacson asked.
“Well, I don’t know about booming, because I think it’s a real balance that we have to think about,” Pritzker said. “But I think that the United States sits in a very good position relative to the global economy.
“What I see around the world is a real interest in investing in the United States,” Pritzker said. “And the reason is because of some really basic fundamentals.
“Start with our strong commitment to rule of law, our intellectual property protections, the amount of money we’re investing in R&D, the quality of our universities, our low-cost and abundant energy,” Pritzker said. “And you add on top of that the ingenuity of the American work force, and the United States is looking very good.”
Pritzker is part of the Pritzker family from Chicago, owns a home in Aspen and is currently number 252 on the Forbes list of the 400 richest Americans, with an estimated net worth of $2.2 billion.
The founder of PSP Capital Partners and Pritzker Realty Group, she also served as the national finance director for President Obama’s 2008 campaign.
In June 2013, Pritzker was confirmed as commerce secretary by a Senate vote of 97 to 1. She walked into the sprawling Herbert Hoover Building in Washington, D.C., and hung a sign on her new office door that read, “open for business.”
The president told her to build a bridge to the business community, and to make sure that the voice of the business community was heard throughout the administration, she said.
Pritzker is now working on two major trade agreements, trying to keep the internet open for small entrepreneurs, creating apprentice programs with industry partners, helping other countries improve their business climates, trying to get local businesses involved in community colleges, and pushing for immigration reform, especially in regard to highly educated workers.
“Estimates are that the immigration reform bill passed in the Senate would add $1.4 trillion to our economy,” Pritzker said.
Before wrapping up one of the last sessions of the 10th Aspen Ideas Festival, Isaacson took questions from the floor for Pritzker.
A man stood, and noting that Pritzker was from “one of the most accomplished families in the last 50 years in America,” asked her about the growing wealth inequality in America and what the Commerce Department could do about it.
“Well, I think we have a very important role,” she said. “And the way to address that challenge is try and build from the bottom up, not try and squash from the top down, and that’s the approach that we’re taking.”
Editor’s note: Aspen Journalism and the Aspen Daily News collaborated on coverage of the Aspen Ideas Festival. The Daily News published this story on Thursday, July 3, 2014.