Geithner's Memoir Sparks Glen Hubbard Backlash

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May 12 (Bloomberg) –- Former Ohio Governor and Center for American Progress President Ted Strickland, Americans for Tax Reform President Grover Norquist and Bloomberg’s Phil Mattingly discuss the fallout from Tim Geithner’s new book. They speak with Trish Regan on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

Phil, i sort of laid out the case there.

Seems like a lot of people are coming out to say -- well, i didn't really say this.

Bottom line, tim geithner is saying that in fact glenn hubbard told him that taxes would have to go up.

What is hubbard saying in response?

That it just is not true.

This is always interesting, when these memoirs amount and you try to compare the stories.

Tim geithner hoss spokesperson said that his memory is crystal clear on this and he is not backing off at all, but neither is glenn hubbard.

You are kind of in a position right now where, as the governor tells you, unless there is a recording, there is not much that you can do to prove whether it is true.

The key here that you see with these memoirs, this is the effort by the writer to kind of control the narrative and put their stamp on history.

In tim geithner us history, it was said regardless of what glenn hubbard thinks.

Were taxes allowed to go up under this economic plan and proposal that mitt romney was putting forward?

I think that we have some selective memory going on here.

We don't know, exactly, which of these men is actually telling the crystal clear truth.

But the fact is, that is what hubbard should have said, taxes did need to go up.

They still need to go up, and my judgment, in order for us to meet the basic needs of our society, educate our kids, provide health care to our people, protect our environment, and make it possible for working middle class folks who have a decent life and reduce the income disparity that exists in this country today.

Regardless of what mr.

Hubbard said or did not say, in my judgment he should have said that mr.

Romney's plan that needed a tax increase to be successful.

You know that grover norquist is here with the onset, perhaps a perfect guide to refute what you are saying, governor.

We know your stance on this.

Why do you believe the governor is wrong?

Because they don't have to go up.

Two things, governor romney took a taxpayer protection pledge to the american people that he would not raise taxes.

That he would reduce and restrained spending.

He passed the ryan budget plan, which is what he would have been able to pass a republican senate , you not only don't need to raise taxes, you can reduce taxes because you actually get control of entitlements.

They dropped total government control by five dollar trillion over one decade.

As bill clinton signed welfare reform.

It does not necessarily mean a political issue?

I know glenn hubbard well.

He might do any number of things, but raising taxes isn't one of them.

Let's get to the heart of 2008 as well.

This book sort of walks people through those dark days.

There are a lot of questions that we still debate as to whether the government took on too much responsibility and too big of a role with tarp.

Think that is true.

One of the interesting things with tim geithner, as you see throughout the book, he has become a sort of steadfast believer that government in situations like this is not only necessary, but needs to come in in a big way.

Think about a treasury secretary that faced some rough congressional panels, including some rough tarp oversight panels.

Even people in his own party thought he would walk that back a little bit and be concerned about government intervention.

Timothy geithner is just the latest in a number of top officials that were there during this crisis that see lehman brothers as a major error, allowing them to go bankrupt, and the need for a lot of government support to come fill the gap.

People like that are now looking back and thinking of tarp as a huge mistake.

You cannot talk any officials involved in the process who agree with that assessment.

Wasn't it sort of an all or nothing situation?

If you bailout one and not the other, you run the risk.

If they have let lehman go, which they did, barclays -- another foreign bank came and got it on the cheap and all was well for a while.

If you had let that play out with additional banks, you might have had foreign buyers coming in and picking up assets on the cheap he does that is the market economy at work, but by being selective in choosing to help some and not others, bear stearns for example, did you just augment the problem?

I think it was a mistake to deal the bella -- do the bailouts at all him to do them selectively, but they were worse than that, they put a pile of cash on the table and wound up bailing out general motors and they were supposed to be buying toxic assets, not cars.

They really just politicized the pile of money on the table and it got spent in very political ways.

Governor strickland, what do you say to that?

People say that we needed it for the banks, for gm -- that this was something that was integral to the economy and employed a lot of people.

It was certainly important to ohio, michigan, and other states where the auto industry was so critical to our economy.

But the fact is that we were on the edge of a meltdown like nothing we had seen in decades.

Certainly not since the great depression.

Action was needed.

It was needed quickly.

The fact is that that was only part of what it took to keep us from sliding into a deep recession or depression.

The stimulus was a vital part of that as well.

We are still dealing with the aftereffects.

There is a school of thought -- i imagine the grover norquist knows it well, where you rip off the band-aid and hopefully things are better down the road.

Grover, if we had been less proactive, might we not be in the situation right now where we are still looking at anemic growth?

We have anemic growth right now.

If we had recovered at reagan levels, we would have 10 million more people.

Timothy geithner is defending the lousiest recovery since world war ii.

He is saying that what he did was a good idea.

It was only worse than every other recovery.

A very bad situation.

10 million people are not working today since we took his approach rather than ronald reagan's approach.

Foreign assets held overseas by american companies, bringing that money back, if they had put that forward the democrats would have had nothing to do with it.

One dollar trillion.

To dollar trillion.

Quite frankly, the circumstances that we were facing were quite different than the circumstances that ronald reagan faced.

We were facing the abyss.

We were facing the abyss.

Something had to be done.

It was not a perfect solution.

But it helps the freefall, helped to stabilize the economy.

We are now in the process of trying to do the -- dig ourselves out of that deep hole.

The recovery is slow, but it is a recovery and i fear where we would have been if action had not been taken.

I think that history will ultimately be the final judge, but from my point of view, as a governor of the great state, a big state during that time, this was essential to keeping our economy from falling ever deeper into recession.

Unfortunately, we are out of time.

History will be the judge.

So great to have you.

This text has been automatically generated. It may not be 100% accurate.

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