Frankly, I’m tired of the entire discussion about the merits, or lack thereof, of Treasury Secretary Tim Geithner save-the-banks non-plan plan, if mostly because I think he and his merry band of economists discarded the best idea first, that of nationalizing insolvent banks. The preceding said, I was amused to see an insidery-y article tonight at the Washington Post explaining which Geithner’s resulting plan was, while the wrong one, also inarticulate and vague: It’s ’cause they made it up on the fly after changing strategies at the last minute.
Just days before Treasury Secretary Timothy F. Geithner was scheduled to lay out his much-anticipated plan to deal with the toxic assets imperiling the financial system, he and his team made a sudden about-face.
According to several sources involved in the deliberations, Geithner had come to the conclusion that the strategies he and his team had spent weeks working on were too expensive, too complex and too risky for taxpayers.
They needed an alternative and found it in a previously considered initiative to pair private investments and public loans to try to buy the risky assets and take them off the books of banks. There was one problem: They didn’t have enough time to work out many details or consult with others before the plan was supposed to be unveiled.
I read this mostly as ass-covering and reputation management. The piece has insiders blaming Obama for letting expectations get so high, and then goes on to have the same folks blame the lack of Treasury personnel and the absence of Blackberrys (I kid you not). So, after pulling an all-weekend-er, Tim, rather than asking for more time, came out with his vague non-plan plan.
In short, we had Henry Paulson, who was late but specific, and then did whatever the hell he wanted; and we now have Tim Geithner, who is prompt but vague, and promises to do whatever the U.S. senate wants him to do. Some choice.
Source: Late change in course Hobbled Rollout of Geithner’s Bank Plan, Washington Post (02/17/09)