He Went Too Easy on the Banks
Those who lean left sometimes criticize Geithner for being too friendly to the banks. Indeed, some even accuse him of having worked for Goldman Sachs. (He didn't.) In fact, Geithner's financial reform proposal that preceded Congress' legislation set the tone for many of the provisions that eventually were passed -- and we all know how much noise the banks have made about that bill. He also helped to ensure that the government got back more than it provided the banks in the 2008 rescue, as taxpayers ultimately made a profit on the bank bailout.
To be sure, he could have been harder on the banks. But don't forget: the financial crisis was a time when the banking industry nearly collapsed. The entire purpose of the bailout and subsequent stability programs was to ensure that the industry survived. Even if harsher punishment was justified, it would have been impractical until the broader economy had improved. So even if Geithner did want to go harder on the banks, he likely understood that doing so would make everyone worse off.
His Housing Policy Was Too Aggressive / Not Aggressive Enough
When I first read the Treasury's mortgage modification plan in early 2009, I thought it would result in a fairly large number of modifications. I was wrong -- it will struggle to reach the 1 million mark. The program was crafted as a way to gently persuade banks to modify mortgages without compelling them to do so with lots of carrots but few sticks. And remember, this was before we knew about all of the bank's foreclosure process flaws.
Still, critics on the right think that government-induced mortgage modifications are unfair to borrowers who dutifully pay their bills, while critics on the left want to see the government aggressively force banks to write-down principle to end foreclosures. Either option is extreme. Geithner took a moderate approach by providing incentives for banks to modify mortgages without compelling them to declare deep losses on underwater loans that could endanger stability.
He Didn't See Such a Deep Recession
Perhaps the most unfair criticism of Geithner is that he didn't realize how bad the recession would be. It's certainly true that he probably didn't expect that unemployment would be 9% 34 months into Obama's first term. But then, who did? Only a select few anticipated this much pain for the U.S. economy. None of Obama's other major economic advisors got it right either.
So to criticize Geithner for not pushing for a bigger stimulus bill in 2009 just doesn't make sense. At the time $787 billion was thought to be fairly aggressive. But more importantly, there are very real political obstacles for having made the size of the stimulus much larger. If it approached $1 trillion, a psychological boundary begins to materialize. The public can handle billions, but trillions just sounds like too much money. That's also a part of the reason why we saw $700 billion chosen for the size of the pool of funds used for the bank bailout in 2008.