Hell hath no fury like a woman scorned.

Those watching the Wall Street-Washington regulatory battles over the years are well aware that there is no love lost between former Treasury Secretary Tim Geithner and former FDIC chair Sheila Bair. While Tim is now out making the rounds promoting his new book, Stress Test, Bair takes the opportunity to offer some faint praise but also some glancing and direct hits.

In what I would qualify as deftly slipping  a punch, Bair actually recommends Geithner’s book. In doing so, though, she then proceeds to lay Tim and his cohorts out with a serious warning we all should heed.

In a Sense on Cents Instant Classic, Bair provides a must read review of Geithner’s tome at CNN Fortune: Why I Recommend Tim Geithner’s Book:

In his new book, Stress Test, former Treasury Secretary Tim Geithner says nice things about me, kind of. For the most part, he fairly recounts our disagreements during the 2008 financial crisis and its aftermath. If you share my skepticism of the bailouts and their generosity, you will think well of the positions I took. If you share his world view that we were justified in throwing trillions at the big banks to “save the system,” you will not. Wherever readers come out, Tim’s book has reinvigorated a much-needed debate about whether our financial system should be based on a paradigm of bailouts or on one of accountability.

Though the vast majority of Americans favor the latter, Washington’s love affair with big finance continues. Regulators and politicians may spout a good line about ending “too big to fail,” but their actions speak louder than their talking points.  Financial reform has been tepid. The hard work to force mega-banks to raise more capital, replace their unstable short-term funding with long-term debt, and simplify their legal structures is at best, half-done.

But who can blame the regulators for being timid when members of both parties in Congress seem to value campaign contributions over system stability?

No doubt about that.

But what lessons have been learned from the greatest crisis of the last 85 years? Bair would maintain that Tim and his team have learned very little but rather have institutionalized a bailout mentality. I encourage readers to ponder Bair’s words and heed her warning:

. . . what’s troubling is his failure to acknowledge the inherent instability created when Wall Street thinks it has a giant put on Uncle Sam.

While an enjoyable read, Tim’s book is also a warning. As much as he is trying to justify the decisions he made and actions he took during the crisis, I sense he is also trying to prep the public for future bailouts. And with this message, I fear, he is reflecting the unspoken views of many on Wall Street where he is now employed: The system is still unstable, there will be another crisis, and yes, they will need to be bailed out again. Of course, Wall Street titans would like bailouts to be new paradigm — after all, they are so much easier than trying to reform the system and hey, they made money last time!

The problem is, when Wall Street blows up, the rest of us suffer.  The cash profits from the bank bailouts are poor recompense for the millions who lost their homes and their jobs, to say nothing of taxpayers and the huge risks the government took with their money. For these things, the public will never be adequately compensated.

I guess I would feel better about Tim’s rationalizations of the bailouts if I thought he was more committed to avoiding them in the future. But instead of openly and vigorously advocating for meaningful financial reform, he seems to think we have pretty much done all we can or should do. I think we should apologize for the bailouts. He wants to be thanked for them. But if we glorify regulators when they bail out the industry, while savaging them when they try to regulate it, what kind of system will we have?

I fully concur. We have witnessed very little in terms of truly meaningful reforms because the corrosive flow of money from Wall Street to Washington and favors paid back in return remain in vogue.

We all pay a very steep price for this glaring lack of financial-political-regulatory leadership.

Navigate accordingly.

Larry Doyle