The Washington Independent
The Washington Independent

Back to Square One

Paula M. Graham
Last updated: Jul 31, 2020 | Feb 17, 2009

There’s been no absence of criticism leveled against Treasury Secretary Tim Geithner and the rest of the White House economic team after their Wall Street bailout strategy, unveiled last week, came up short on details and sent the Dow tumbling nearly five percent.

Today, The Washington Post today lends a nice glimpse into the reasons why that plan was so vague, reporting that Geithner & Co., after spending weeks crafting one plan, changed course at the last moment after deciding their initial strategy was too expensive and too risky. “There was one problem,” The Post reported. “They didn’t have enough time to work out many details or consult with others before the plan was supposed to be unveiled.”

The sharp course change was one of the key reasons why Geithner’s plan — his first major policy initiative as Treasury secretary — landed with such a thud last Tuesday. Lawmakers, investors and analysts expressed dismay over the lack of specifics. Markets tanked, and fresh doubts arose about the hand now steering the country’s financial policy.

Under the revamped Geithner plan, the Troubled Asset Relief Program would once again merit its name, combining public funds with private investments to rid the banks of their toxic assets and get them lending again. But, according to The Post, there remained too many unknowns last week to unveil their strategy in any detail. For example, federal officials were unsure how much federal funding the plan would require; where the cash would come from; and how the government would lure private investment into toxic securities, many of which are backed by fraudulent mortgages of questionable value.

In the end, Geithner and his colleagues decided that it would be better to take flak for being vague than publicly offer half-formed details that might later have to be revised.

That might prove a prudent course. But it still doesn’t explain why Geithner — who had been been the lead regulator of New York’s banks for the last five years, not to mention one of the central architects of the Bush administration’s Wall Street bailout — didn’t have a clearer idea of a solution, even as recently as last week.

Paula M. Graham | Paula is a writer and editor who works as a freelancer. She covers subjects such as banking, insurance, and digital marketing in his writing. Paula is a bookworm who also enjoys podcasts and freshly made coffee.


$1.89 billion given to states to fight HIV

The federal government Monday announced more than $1.89 billion in funding to states to fight the HIV epidemic with access to care and with more cash for the failing AIDS Drug Assistance Program. According to an HHS press release , $813 million of that money will go directly to the ADAP programming. An additional $8,386,340 will be issued as a supplement to 36 states and territories currently facing a litany of unmet needs and access issues.

Army Data Shows Constraints on Troop Increase Potential

If President Obama orders an additional 30,000 to 40,000 troops to Afghanistan, he will be deploying practically every available U.S. Army brigade to war, leaving few units in reserve in case of an unforeseen emergency and further stressing a force that has seen repeated combat deployments since 2002.

1. Brian Schweitzer

As governor of Montana, Schweitzer doesn’t represent one of the most highly populated, high-profile electoral states in the country. But this

$1.3 Million for Brown

The GOP’s candidate in the Massachusetts special election raised more than one million dollars -- double the goal -- in a 24-hour moneybomb on the Ron Paul

$1.3 trillion in federal spending unaccounted for, report finds

Despite calls for independent bodies to keep government accountable, the Sunlight Foundation’s most recent Clearspending report has found the federal

#1 in Conspiracy Theories

Andrew Young’s tell-all biography of John Edwards, hitting shelves next week, is surging in one category in particular. #1 in Conspiracy

1 Brigade and 1 Battalion

ISTANBUL – It’s 10 p.m. in the lowest level of the Istanbul airport. In 20 minutes I’ll be allowed to board my plane to Kabul, bringing me to the

$1 Million for Toomey

Pat Toomey, the former Club for Growth president and leading Republican candidate in Pennsylvania’s 2010 Senate race, has announced a $1 million haul in the

1. Lindsey Graham

Sen. Graham (R-S.C.) is typically regarded as a reliable vote for his party, but he took the bold step of breaking with his fellow Republicans to join Kerry

Bachmann uncomfortable over earmarks ban

Republicans appear to have boxed themselves into a corner with their portrayal of earmarks as wasteful spending, as many of them have backed a moratorium on

Troubled mine holds hope for U.S. rare earth industry

China currently controls 97 percent of the world’s rare earth production. The Mountain Pass Mine could change that -- if it can overcome serious environmental concerns.

© Copyright 2021 The Washington Independent All Rights Reserved

Terms & Privacy |