Late Change in Course Hobbled Rollout of Geithner's Bank Plan

[Pirate Smile]

Source: Washington Post

By Neil Irwin and Binyamin Appelbaum
Washington Post Staff Writers
Tuesday, February 17, 2009; Page D01

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.

The sharp course change was one of the key reasons why Geithner's plan -- his first major policy initiative as Treasury secretary -- landed with such a thud last Tuesday. Lawmakers, investors and analysts expressed dismay over the lack of specifics. Markets tanked, and fresh doubts arose about the hand now steering the country's financial policy.

-snip-
Meanwhile, the sources said, Obama's senior economic advisers were hobbled in crafting the plan by a shortage of personnel. To date, the president has not nominated any assistant secretaries or undersecretaries at the Treasury, and the handful of mid-level staffers who have started work were still finding their offices and getting their building passes and BlackBerrys.

Moreover, the department made a strategic decision to limit input from the financial industry and other outsiders, aiming to prevent leaks and avoid a perception they were designing the plan for the benefit of big banks. But that also meant they were unable to vet their plan with the companies involved or set realistic expectations of what would be announced.



Read more: http://www.washingtonpost.com/wp-dyn/content/article/2009/02/16/AR2009021601180.html?hpid=topnews

[FrenchieCat]

1. strange.....I thought it was Hobbled by talking down Geithner

for a purpose! http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x3741521

[stillcool]

2. If I were speculating...

I'd say that the 'too big to fail' guys, and the federal government are like nuclear powers caught up in a game of chicken.

[Mojorabbit]

4. If I were guessing

I would say that they floated the "bad bank" balloon and it tanked. They realized they would have to come up with something that might be more palatable.

[Demeter]

3. While Engaged in a Battle of Wits, Giethner Found Himeslf Unarmed

[FarCenter]

5. A bunch of empty suits without people to do their work for them?

senior economic advisers were hobbled in crafting the plan by a shortage of personnel

[No Elephants]

6. Bushco did have undersecretarys, etc.. Yet, it did NOTHING about the gathering

economic storm until it absolutely had no choice. And it's bill was much worse than Obama's, who had under a month in office.

What did WaPo have to say about THAT?