The Early Reviews on Geithner’s Bank Rescue Plan: Fiasco!

Treasury Secretary Timothy Geithner is just now announcing the details of the administration’s bank bailout plan, but Naked Capitalism already has a verdict - Fiasco!

Here we have another scowling Treasury secretary, with a bit more hair than his predecessor, serving up the same fatally flawed approach as before: let’s just throw money at the banks and hope they get better. This is tantamount to using antibiotics to treat gangrene. You waste good medicine and the progression of the rot threatens to kill the patient.

Well, let’s not mince words.

Here’s more:

Let us not forget that Paulson did manage to dispense the better part of $350 billion in a blinding show of Mussolini-styled corporatism. The new Treasury secretary exhibits similar Italian fascist tendencies, with even less ability to make the trains run on time.

Ouch.

Naked Capitalism feels the biggest problem with Geithner’s plan is that it gives banks funding on an open-ended basis – with no requirement to write down or sell the “dreck” at the heart of the crisis, which is all their toxic mortgage-backed assets. And it goes easier on bank executives than apparently some in the Obama administration wanted.

Those are legitimate beefs with this plan, no matter how colorfully they are phrased. Don’t expect critics of the Bush bailout to jump up and down about this new approach, either.