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Timothy Geithner to Jon Stewart: Bailout Was ‘Deeply Unfair’ (Video)

But there was no other choice, he says

Former U.S. Treasury Secretary Timothy Geithner told Jon Stewart Wednesday that the bailout of the financial system was “deeply unfair” — but kept the country from collapsing into a depression.

Geithner appeared on “The Daily Show” to promote is new book, “Stress Test: Reflections on Financial Crises.” Stewart said there was a “perception among the engineers of the bailout that they are being unreasonably castigated.”

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“No, I don’t think it’s unreasonable,” Geithner said. “It was deeply unfair. Except relative to the alternatives. The rescue itself at its core is a fundamentally unfair thing except relative to the alternative of letting the system burn down.”

Stewart said that seemed like a “false choice,” but Geithner, who served as secretary from 2009 to 2013, said there’s been “a great history of mistakes and errors” by countries that tried to act differently than the U.S. did, and suffered for it.

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Stewart accused the bailout of reinflating “a toxic system.” Geithner said there was “something to that,” but that the bailout ended an economic panic — and that bailed out banks were forced to repay taxpayers.
That led to a debate about whether the U.S. had just given banks money that they were then immediately able to increase by investing — without passing the profits on to taxpayers.
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