Wednesday, February 11, 2009

Geithner's Poem

Timothy Geithner's latest poem did not get good reviews. An excellent summary of the various reactions can be found in Yves Smith's blog, Naked Capital: Geithner Plan Smackdown Wrap. Here are some excerpts:
I cannot recall a major US policy initiative being met with as much immediate revulsion as the so-called Geithner plan. Even the horrific TARP, which showed utter contempt for Congress and the American public was in some ways less troubling. Paulson demanded $700 billion, nearly $200 billion bigger than the Department of Defense, via a three page draft bill, nothing more that a doodle on a napkin, save that it did bother to put the Treasury secretary above the law. But high-handedness was the hallmark of the Bush Administration; it was only the scale and audacity of the TARP that was the stunner.
And the TARP initially did have some supporters (perhaps most important, among the media, who trumpeted the "Something must be done" case). Fans are much harder to find for the latest iteration of the seemingly neverending "let's throw more money at the banks" saga.

As we, and increasingly others, have said, the Obama economic team is every bit as captive to Wall Street's interests as the Bushies were. The differences increasingly look stylistic, not substantive. . .

Treasury Secretary Geithner presented today what in essence was a plan to come up with a plan. I now understand why he is so loath to have government run banks. . .

Thus Geither's belief that government can't manage assets is sheer projection of his own inability to deliver. . .

From bank expert Chris Whalen of Institutional Risk Analytics (via e-mail):
Real disaster. I am very concerned that the Obama Admin is going pear shaped before the snow even melts.

Kevin Logan, senior US economist at Kleinwort Benson:
They have a plan for a plan but they don't really have a plan. The whole proposal is so vague as to create new uncertainty, and maybe the problem is really so bad that they haven't worked out how to solve it.

So. The reviews are in and they are not good. Perhaps a revision is in order. Of course, many great works of art have not been appreciated in their own time. Perhaps, over the years, the beauties of Geithner's effort will be fully evident. So what if it doesn't rhyme (i.e., make sense)?

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