What Can Financial Crises Teach Us About Medicine? Timothy Geithner Explains
There’s a moment in “Stress Test: Reflections on Financial Crises,” when Timothy Geithner describes what it felt like to be at the center of the 2008 financial crisis – plunging readers directly into his chaotic and uncertain world.
I didn’t have a way to explain the terror of those days until later, when I saw The Hurt Locker, the Oscar-winning film about a bomb disposal unit in Iraq. What we went through on interminable conference calls in fancy office buildings obviously did not compare to the horrors of war, but ten minutes into the movie I knew I had finally found something that captured what the crisis felt like: the overwhelming burden of responsibility combined with the paralyzing risk of catastrophic failure; the frustration about the stuff out of your control; the uncertainty about what would help; the knowledge that even good decisions might turn out badly; the pain and guilt of neglecting your family; the loneliness and the numbness. I liked the protagonist’s deadpan response when he was asked the best way to defuse a bomb: The way you don’t die. In other words, the way that works.
Last week, Geithner, in conversation with Abraham Verghese, MD, shared this gripping passage with a packed room of Stanford physicians, residents, and medical students, as part of the Department of Medicine’s Medicine Grand Rounds series.
At first blush, Verghese acknowledged, Geithner, the former secretary of the treasury, may seem like an unusual choice for a Medicine Grand Rounds speaker. “You may wonder,” he asked, garnering laughter from the crowd, “why we are here?”
Though we’re accustomed to thinking about medicine and finance as separate entities, there are several ways they overlap. Firstly, as Geithner pointed out, they share common language, frequently using metaphors and analogies like containment and panic. There are also, Verghese explained, powerful parallels in the decision making, and the constant risk of failure.
The ensuing hour-long conversation was studded with observations about the historical context of global financial crises; the difficulty of decision making when the stakes are impossibly high; and the inherent tension between political constraints, public opinion, and what works. Here are a few highlights:
On growing up as an “outsider looking in":
My father worked for USAID and the Ford Foundation, and so I spent most of my life growing up outside the U.S. – first in East Africa, then in India, and then in Thailand. And then I went to study in China when I was in college, and I worked in Japan for two years. I had a long formative set of years outside this country looking back at us.
On the appeal of public service:
I think I had this pull to go work in government because, if you grow up outside the U.S., you watch the huge effect the U.S. has on the world - sometimes for good sometimes for not so good. And it made me want to work for my country and try to be part of what the U.S. did in the world.
On his early experience with international crises:
After graduate school at John Hopkins I worked in the international branch of the treasury. That was a period of this recurring set of classic financial crises across the emerging world – starting in Mexico, spreading to Asia, back to Latin America, and then Russia. I was lucky to get exposed to that in many ways, because I had this experience watching people confront something they had no experience with, people who had no idea what to do and had to feel their way through and made a lot of mistakes. It gave me exposure to fear, and discomfort, and a lot of exposure to the conflict between what you have to do in a crisis and what’s comfortable politically.
On the agony of decision making:
The hard thing in a crisis is...when you don't know what to do. The hard thing is when you know the costs of being wrong are terrible, you know the uncertainty about what to do is vast, and you're unsure, that's the hard thing. Much harder than when you've decided and you've sort of staid 'Okay, I think this is the best of the bad choices.' I find that more calming. The hard thing is when you're at that moment when you’re not sure.
And on the necessity of making a choice:
You don't really know the consequences but you must choose...You must decide which mistake is costlier. You're going to make mistakes – which mistake is easier to correct? Which mistake gives you more optionality going forward to alter your strategy? Those things are the most valuable things in how you think about problems.