Robert Stein 1924-2014

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Tuesday, February 10, 2009

Bank Rescue: Tim Geithner's Times

The Treasury Secretary is announcing his plan to save the banks this morning, but the New York Times has it all before he says a word.

A front-page story reports that "Mr. Geithner, who will announce the broad outlines of the plan on Tuesday, successfully fought against more severe limits on executive pay for companies receiving government aid.

"He resisted those who wanted to dictate how banks would spend their rescue money. And he prevailed over top administration aides who wanted to replace bank executives and wipe out shareholders at institutions receiving aid."

On the editorial page, David Brooks, without bothering to tell us how he knows, offers Geithner's thinking about the process with direct quotes:

"The key, he says, is to create 'massive, sustained and substantial macroeconomic policy' that would pump capital into markets to get them working again. The heart of his program is a series of public-private investment funds...One would acquire toxic assets. One would foster consumer and small-business lending. 'There’s a lot of private capital out there that wants to come in. It just can’t get the financing,' Geithner insists. The new programs would encourage private investors, and then once the markets are unfrozen, would 'get out as quickly as possible.'”

With all this inside information, it's not surprising that Brooks finds "Geithner’s plan is huge but also disciplined. It’s designed by someone aware of government’s limitations."

If Treasury's attempt to make its new bank rescue plan seem tempered rather than toothless is half as successful in the real world as it already is with the newspaper of record, we can all stop worrying without bothering to listen to what Geithner himself has to say today.

Who knew it was going to be this easy?

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