Krugman's hair seems to be on fire today: The Geithner Delay

[Kurt_and_Hunter]

Unusually feisty blog entry from the Krug-Man today.

The Geithner Delay

The WaPo reports that Tim Geithner realized late in the day that the approaches to financial rescue originally developed by the Obama team weren’t workable — hence the vagueness of last week’s announcement.

In a way, that’s encouraging: we were spared Hankie Pankie II. But it’s a bit alarming that it took so long for the team to figure out the problems — and that they apparently spent a long time going down a route that led to a dead end. Many of these issues had been hashed out in public discussion last fall, when Paulson made his play. And I can’t believe that the discussions would have gone so off the rails if any of the high-visibility outsiders had been in the loop — Joe Stiglitz, Nouriel Roubini, Simon Johnson, etc. (No, I wasn’t in the loop either.)

So what the WaPo report seems to suggest is a worrisome insularity. Geithner and Summers are smart guys — but they need to get out more.

http://krugman.blogs.nytimes.com/2009/02/17/the-geithner-delay/

[HiFructosePronSyrup]

1. Maybe his pants too?

[AtomicKitten]

2. * snort *

[backscatter712]

3. Sounds like Obama wasn't buying what Geithner was selling just on ideology.

He said, "OK, this is the way you want the policy to go? Crunch the numbers. Prove it!" Looks like Geithner, Summers and co. did crunch the numbers, did all the homework, and figured out exactly what was going to happen if they did things their way. And... it didn't work.

Back to the drawing board. Try something Keynesian this time.

[flpoljunkie]

4. Let's hope that Obama listens more to Axelrod than Geithner. He's much closer to main street.

There are many economists who share Krugman's concerns about Geithner implementing Paulson 2.0. Let's hope the 'stress test' will be a precursor to letting big too big to fail, fail. We should not have banks too big to fail.

If you look at these figures, it will make you concerned about whether Congress works for us or primarily for big money. Check the numbers for contributions to Congress from Finance, Insurance and Real Estate.

http://www.opensecrets.org/industries/indus.php?ind=F

[MarjorieG]

5. Seems either not to his liking or his speed. I think O's team knows global implications make this..

a less obvious rememdy and needing small steps. Like our short term stimulus, seeing how impacts, before more debt. Prudent, and defensible, with apporpriations still out there. Aid to states as a do alone, which O has been promoting, can be done again.

O talks about Japan in the 90s, so he's aware of everything Krugman is pushing.

I think Geithner and Summers are out there as public face as much for Wall St and globl reassurance; I think O team is going over a lot o policy, rom different views.

[camera obscura]

6. Better late than never. I wish Krugman had taken the chance to talk to Obama though.

I remember hearing that he didn't show up when Obama had coffee with his "favorable" pundits (Rachel Maddow, Andrew Sullivan, MoDo, Frank Rich, etc) even though he was invited. That is really too bad... he should be talking to Obama about these issues face to face.

And - oblig disclaimer - I say this as someone who despised Krugman in the primaries for being so knee-jerk anti-Obama.

[karynnj]

7. This does seem worrisome - and was a Clinton administration problem as

well early in his first term. That was their biggest error on Healthcare. (As Summers was a Clinton person and mentor of Geitner, they shouldn't have not brought in a wide range of experts. But, as Krugman pointed out - at least they changed course.)