We were told we had to, just had to have Tim Geithner as Treasury Secretary despite his tax cheating problems because he was such a genius. Then he unveils a half-baked bank bailout plan. Megan McArdle observes:
Plan? That’s not a plan, it’s a fervent wish. No details at all on the foreclosure program, and precious few beyond platitudes about the mechanisms for dealing with toxic assets. The only real new information is the amount: $1 trillion total, $500 billion to start. I don’t envy Geithner his position. But he’s known this was coming for months. I expected a little more than telling us that he wanted to spend a lot of money to help banks clean up their balance sheets. We knew that much already.
Certainly there were honest taxpayers who could have done at least this well, right? The reports and reviews are devastating.
For starters, it’s never good when they laugh at you (“Administration officials were greeted with sarcasm and laughter Monday night when they briefed lawmakers and congressional staff on Treasury Secretary Tim Geithner’s new financial-sector bailout project, according to people who were in the room.”) (h/t Glenn Reynolds) Investors really hated the Geithner plan. And The Wall Street Journal set the tone for the chorus of howls: “Judging by the hissing in financial markets, Treasury Secretary Timothy Geithner’s opening act as Rescuer in Chief yesterday was a bomb.” Ouch.
But we should have suspected this was coming. Geithner was at Hank Paulson’s side and was involved intimately, we were told, in each of the Bush administration bailout machinations. So we should hardly be surprised when we get something lacking “freshness and clarity.” After all, he’s just carrying out business as usual.
Larry Kudlow on CNBC last night also observed that the president, in effect, set up Geithner. To deflect further press inquiry during his primetime presser the president promised Geithner would have all the details on the bank bailout the following day. Naturally, the markets expected Geithner would have all the details. When he didn’t, they were mighty disappointed.
The Obama administration is teetering on the brink of a precipice. After such an impressive campaign the public may start to worry just how incompetent this crew is. Botched nominees, a less-than stellar stimulus plan, and now a bank bailout that landed like a thud. The Obama team has a very short window in which to get its act together. The markets, voters and Congress are watching — nervously.