Why Geithner Laid an Egg with his Bank Bailout II

Rick Moran
The Washington Post does a post mortem on Treasury Secretary Geithner's disastrous roll out of his bank bail out bill last week and finds there was confusion, lack of coordination, and a political decision not to consult with the companies that were going to be the recipients of the taxpayer's largess because the Administration was afraid they would be criticized for tailoring a package to please the banks:

Public acceptance of the plan suffered from several missteps, said sources involved in the decision-making or in close contact with those who were.

The Obama administration, they said, failed to rein in the grand expectations built for the plan on Wall Street and in Washington, concluding that they would rather disappoint the markets with vagueness than lay out a lot of details they might have to change later -- a failing they saw in the Bush administration's handling of the crisis.

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.

The Post points out that Geithner set an artificial deadline to concentrate the minds of the planners as well as prevent a long, drawn out process that might make the Administration look "indecisive."

Basically for political reasons, Geithner was forced to unveil a plan with few specifics and no guarantee that it will survive further examination by his people.

More evidence - frightening in its implications - that these guys don't have their act together and are more concerned about political atmospherics than coming up with a viable plan to avoid what most economists are saying is a possible meltdown of the financial sector.

 

 



The Washington Post does a post mortem on Treasury Secretary Geithner's disastrous roll out of his bank bail out bill last week and finds there was confusion, lack of coordination, and a political decision not to consult with the companies that were going to be the recipients of the taxpayer's largess because the Administration was afraid they would be criticized for tailoring a package to please the banks:

Public acceptance of the plan suffered from several missteps, said sources involved in the decision-making or in close contact with those who were.

The Obama administration, they said, failed to rein in the grand expectations built for the plan on Wall Street and in Washington, concluding that they would rather disappoint the markets with vagueness than lay out a lot of details they might have to change later -- a failing they saw in the Bush administration's handling of the crisis.

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.

The Post points out that Geithner set an artificial deadline to concentrate the minds of the planners as well as prevent a long, drawn out process that might make the Administration look "indecisive."

Basically for political reasons, Geithner was forced to unveil a plan with few specifics and no guarantee that it will survive further examination by his people.

More evidence - frightening in its implications - that these guys don't have their act together and are more concerned about political atmospherics than coming up with a viable plan to avoid what most economists are saying is a possible meltdown of the financial sector.