Wednesday, February 11, 2009

Geithner's Financial Stability Plan, Or Whatever

C’mon now, everyone. Cheer up. At least Tim Geithner is easier on the eyes than Hank Paulson, whose face seemed to have the words “we’re all gonna die” written on it no matter what he was saying.

Yesterday's stock market plunge, everyone says, was about the plan’s vagueness and skimpiness and not its content. As we’ve all heard a gazillion times, the markets yearn for certainty, which the administration cluelessly dangled but didn’t deliver. Still, I wish the markets would just grow up and accept the fact that certainty, which seems to have been an illusion anyway, has packed up and moved to an undisclosed location. Somewhere in outer Brooklyn, is what I’m hearing.

There are things to like in this "not-yet-a-plan" Financial Stability Plan. While the bad bank idea presents huge practical issues – the difficulty of pricing crappy assets tops the list – I’m inclined to support it because Trillion-Dollar Meltdown author Charles Morris said something nice about it in an interview back in October. I've heard this guy speak, and if there's such a thing as a wise man, he's it. (Another thing Morris said in that interview, by the way, was this: "In the real world, this is going to be a total mess no matter how it's done. Government is a very blunt instrument.")

Also, I think Geithner genuinely understands that the government's actions need to be a lot more consistent and predictable. Under Paulson, the TARP bore an uncanny resemblance to me driving a stick shift: lurching, stalling, grinding the gears and generally frightening everyone else off the road. Transparency is crucial, too; it's encouraging that, as BailoutSleuth noted today, Geithner has begun to publish reasons why Bank X, Y or Z got TARP money.

A less encouraging thing is that a click on the webcast link posted on the new Financial Stability website brings up not Geithner’s speech, but a video of some Hank Paulson press conference from last December. Well, maybe we’re all gonna die after all.

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