During an interview this week on Bloomberg's Political Capital with Al Hunt, Treasury Secretary Timothy Geithner disputed claims made by Goldman Sachs's CEO Lloyd Blankfein in Vanity Fair, proclaiming that the company would have survived without the government's $12.9 billion in bailout money. Geithner disagreed:
HUNT: You were the head of the New York Fed, right in the middle of the crisis a little over a year ago. Some Goldman Sachs executives have recently said their firm would have been okay without the Federal assistance and the Federal Reserve and others last year. Is that your view?
GEITHNER: My view is this.
HUNT: Did Goldman Sachs need the Federal government fourteen months ago?
GEITHNER: The entire U.S. financial system and all the major firms in the country and even small banks across the country were at that moment at the middle of a classic run - a classic bank run.
HUNT: So they would have been at risk (inaudible)?
GEITHNER: I think the system was at risk and the big institutions were not - none of them would have survived a situation in which we had let that fire try to burn itself out.
During the interview, Geithner also stated that unused TARP money could be used to invest in "job creation" and "our long term fiscal challenges." Geithner declined to say how much money of the more than $200 billion left over from the program he wanted to be put towards either of those goals:
HUNT: Let me ask one more. The White House did say today that Gibbs - Robert Gibbs said that you wanted to use some TARP funds for specific job creation. How much money and how many jobs are you talking about?
GEITHNER: We're going to lay out in some more detail in the next couple days a range of important things about the TARP. We're going to explain that we're going to have substantial savings, that we're going to have very substantial resources we can make available to support not just the immediate priorities the country faces in spurring investment in job creation, but also to meet our long term fiscal -
GEITHNER: - challenges. Those resources are going to be very, very substantial because we have been very successful in helping to stabilize the financial system, bring the cost of credit down, open up these markets at much, much lower cost than anybody anticipated.
When Geithner was asked about the Tobin tax, a tax that would be levied on financial transactions, he dismissed it (though Hunt notes comments by Nancy Pelosi earlier this week that the Treasury Secretary was now open to the idea). Bloomberg noted that Geithner was "echoing some of the banking industry's reasons for opposing a Tobin tax" when he cited the possible effects that the tax would have on smaller investors.
Watch Geithner's Interview On Political Capital: