Saying "Enough" to the Banks

As Timothy Geithner dithers, the Congressional watchdog on the bank bailout, Elizabeth Warren, is previewing a much tougher attack.

"We want to ensure that the Treasury gives the public an alternative approach," she tells the Guardian about her worries that banks won't recover while being fed subsidies. "When are they going to say, enough?"

"The very notion that anyone would infuse money into a financially troubled entity without demanding changes in management is preposterous," she adds.

Professor Warren, head of the oversight committee monitoring the government's Troubled Asset Relief Program, will call for shareholders to be "wiped out." saying, "It is crucial for these things to happen. Japan tried to avoid them and just offered subsidy with little or no consequences for management or equity investors, and this is why Japan suffered a lost decade."

Geither meanwhile is on TV hemming and hawing about possible "restructuring" of banks in the future as White House economic adviser Lawrence Summers plays down his $5.2 million gig last year with a hedge fund business as "a part-time job."

The Times runs an OpEd argument that the crisis needs to be "tackled head-on, not by propping up failing banks" but seizing them, stripping toxic assets and auctioning them off.

It's looking more and more like the most crucial restructuring needed may be at the White House economic team. When will the President say "Enough"?