Too Big to Fail [37]
“He’s twelve years old!”
Such was the reaction of a nonplussed Peter G. Peterson, the former Lehman Brothers chief executive and co-founder of the private-equity firm Blackstone Group, upon first meeting Geithner in January 2003. Peterson had been leading the search for a replacement for William McDonough, who was retiring after a decade at the helm of the New York Fed. McDonough, a prepossessing former banker with First National Bank of Chicago, had become best known for summoning the chief executives of fourteen investment and commercial banks in September 1998 to arrange a $3.65 billion private-sector bailout of the imploding hedge fund Long-Term Capital Management.
Peterson had been having trouble with the search; none of his top choices was interested. Making his way down the candidates list, he came upon the unfamiliar name of Timothy Geithner and arranged to see him. At the interview, however, he was put off by Geithner’s soft-spokenness, which can border on mumbling, as well as by his slight, youthful appearance.
Larry Summers, who had recommended Geithner, tried to assuage Peterson’s concerns. He told him that Geithner was much tougher than he appeared and “was the only person who ever worked with me who’d walk into my office and say to me, ‘Larry, on this one, you’re full of shit.’”
That directness was the product of a childhood spent constantly adapting to new people and new circumstances. Geithner had had an army brat childhood, moving from country to country as his father, Peter Geithner, a specialist in international development, took on a series of wide-ranging assignments, first for the United States Agency for International Development and then for the Ford Foundation. By the time Tim was in high school, he had lived in Rhodesia (now Zimbabwe), India, and Thailand. The Geithner family was steeped in public service. His mother’s father, Charles Moore, was a speechwriter and adviser to President Eisenhower, while his uncle, Jonathan Moore, worked in the State Department.
Following in the steps of his father, grandfather, and uncle, Tim Geithner went to Dartmouth College, where he majored in government and Asian studies. In the early 1980s, the Dartmouth campus was a major battleground of the culture wars, which were inflamed by the emergence of a right-wing campus newspaper, The Dartmouth Review. The paper, which produced prominent conservative writers such as Dinesh D’Souza and Laura Ingraham, published a number of incendiary stories, including one that featured a list of the members of the college’s Gay Students Association, and another a column against affirmative action written in what was purported to be “black English.” Taking the bait, liberal Dartmouth students waged protests against the paper. Geithner played conciliator, persuading the protesters to channel their outrage by starting a rival publication.
After college, Geithner attended the Johns Hopkins School of Advanced International Studies, where he graduated with a master’s degree in 1985. That same year he married his Dartmouth sweetheart, Carole Sonnenfeld. His father was best man at the wedding at his parents’ summer home in Cape Cod.
With the help of a recommendation from the dean at Johns Hopkins, Geithner landed a job at Henry Kissinger’s consulting firm, researching a book for Kissinger and making a very favorable impression on the former secretary of State. Geithner learned quickly how to operate effectively within the realm of powerful men while not becoming a mere sycophant; he intuitively understood how to reflect back to them an acknowledgment of their own importance. With Kissinger’s support, he then joined the Treasury Department and became an assistant financial attaché at the U.S. Embassy in Tokyo, where he ruled the compound’s tennis courts with his fierce competitiveness. The