In a conference call during the transition between the 2008 election and his inauguration, President-elect Barack Obama wanted to discuss his first-term agenda.

Treasury Secretary-designate Timothy F. Geithner spoke up: “Your accomplishment is going to be preventing a second Great Depression.”

That wasn’t enough for Obama, after campaigning on a lengthy agenda of change.

“I’m not going to be defined by what I prevented,” Obama retorted.

“If you don’t prevent a depression, you won’t be able to do anything else,” Geithner replied.

Geithner replayed that scene, the beginning of the 2008 financial crisis and the frantic efforts to ward off another Great Depression in his book, “Stress Test: Reflections on Financial Crises.”

In the book, which could really be classified as a collection of horror stories, he recounts the more frightening moments of the crisis and the internal debate in the Obama administration to avert disaster.

It is 580 pages, but contains more than 41 pages of notes, acknowledgements, charts and graphs, as well as a glossary of terms. Despite the myriad of alphabet agencies and government programs covered in the book, it’s very readable.

Contrary to what his detractors said, Geithner was never part of a Wall Street bank, did not have a doctorate in economics, was not a lawyer or a politician. He was a technocrat, who spent two decades in the Treasury Department, the International Monetary Fund and the Federal Reserve system, with his last post as president of the New York Federal Reserve Bank before becoming Obama’s Treasury secretary.

What he was, was an expert in financial crisis management with lessons learned starting with the Mexican and South American crises and later the Indonesian,Thai and the Russian financial crises.

Considering his background, he was qualified to be Treasury secretary during the worst financial crisis in 75 years.

But it was a job he never wanted. He tried to talk Obama out of appointing him and had, during his tenure, offered to resign many times. Geithner had told Obama that he was a poor public speaker and was afraid he could not convince the public and Congress to go along with what he, Obama economic adviser Larry Summers, and Fed Chairman Ben Bernanke thought should be done.

Geithner’s ‘Bible’
Geithner adhered to the concept outlined by Walter Bagehot in his 1873 book “Lombard Street,” that during times of crisis, banks should fill their front windows with all the cash they have and “to lend freely, boldly, … so that the public may feel you mean to go on lending.” By doing this, the public would see there is no reason to panic and cause a run on banks. Geithner wrote that he considers this book to be the bible of central banking.

Geithner repeatedly argued for using all the cash the government could throw at the financial crisis as a means to end the panic. He argued that not doing so would wind up costing taxpayers more in the long run.

This concept clashed with the congressional Republican philosophy of austerity, letting the financial crisis “burn” to weed out the crooked and inept in the financial system by allowing “Old Testament justice” to serve as an example to  prevent future “moral hazard” (bankers would always be greedy and stupid, counting on government to bail them out).

This battle of philosophies played out during the crisis when, on a first vote, Congress rejected bailing out Wall Street. The market then plunged and Congress voted again to approve the bailout and the market settled.

Crossing Swords
Geithner would cross swords with several Republican lawmakers: Rep. Michele Bachmann, R-Minn., over the constitutionality of bailing out banks through the Troubled Asset Relief Program; U.S. Sen. Mark Kirk, R-Ill., who advised the Chinese not to buy U.S. Treasuries; and one exchange during a congressional hearing when he was being grilled by Rep. Kevin Brady, R-Texas.  Geithner told Brady that he agreed with “nothing you said.”

Of course, Geithner also ran afoul of progressives because he wouldn’t agree to give “haircuts” -- letting investors take the hit for putting their money in a “bad”  firm. He argued that would dry up investment or cause it to “run” at a time when the crisis didn’t need any further stoking.

MSNBC’s Rachel Maddow told him that it was hard for Democrats to trust him because he was the face of Wall Street bailouts.

Geithner doesn’t take sole credit for what worked. Bernanke and Summers and many others worked hard to save the U.S. economy, Geithner notes. He also said Obama only insisted that they fix the problem and not worry about the politics.

Geithner writes: “Politics is not my life’s work, but it left me with some scars, and I have some things to say about the soul-crushing pathologies of Washington. I witnessed some appalling behavior in the political arena – selfishness and grandstanding, shameless hypocrisy and mindless partisanship.”

“Stress Test” is a memoir and the point of view is Geithner’s. But he does strive for objectivity. He writes of his failures, chief among them was he didn’t see the warning signs of the ’08 crisis. He writes also about the hardships inflicted on his family.

The book has also generated controversies.

Geithner recounts a 2012 exchange at the Economic Club of New York Dinner with Glenn Hubbard, who at the time was the economic advisor to GOP presidential candidate Mitt Romney, regarding the Simpson-Bowles deficit-reduction plan.

Hubbard, who is the Columbia University business school dean and a one-time candidate to lead the Fed, asked Geithner why the administration was not embracing Simpson-Bowles.

“Really, Glenn?” Geithner responded. “There’s a $2 trillion tax increase in there. When you guys are willing to raise taxes, we can talk about Simpson-Bowles.”

Geithner wrote that Hubbard responded: “Well, of course we have to raise taxes. We just can’t say that now.”

Hubbard has accused Geithner of lying and Geithner, through a spokesperson, replied that he wasn’t and his memory on the exchange was “crystal clear.”

First Response
Throughout the book, Geithner argues that government ought to be able to deal with financial crises the way it goes to war: all out and immediately.

Military, firefighting and first responder analogies are used constantly. He calls the county’s financial regulations a “byzantine mess,” where different agencies have oversight over different parts of the economy and over different financial instruments.

He also said the government didn’t have oversight on the various investment vehicles that caused the crisis and sold by the “14 families” (the 14 investment houses). He notes the Fed had oversight on only two of those firms.

His other big regret is that the country doesn’t know it has made a profit on the bailout. But through his inability to communicate what the government was doing and why, Main Street viewed it as saving Wall Street at taxpayers’ expense.

The biggest accomplishment, he wrote, is the “stress test” financial institutions must perform to insure they have enough liquidity on hand to weather bad financial storms.

Even though the U.S. is in better shape now than the rest of the world, Geithner wrote: “We did save the economy, but we lost the country doing it.”

“Stress Test: Reflections on Financial Crises” by Timothy F. Geithner. Crown Publishing. May 13;  580 pages.

William L. Haacker is an award-winning journalist and editor who has worked for various New Jersey newspaper, including Gannett New Jersey.