I spent the day watching CNN – President Obama at Fort Myers, Ben Bernancke in front of a Congressional committee, and Tim Geithner in front of the Senate committee. Then I went on to all my favorite liberal blogs. I'm astonished that so many people (like almost everyone) want to rush to judgment about the lack of a complete "plan," a full-blown solution to this complex and dangerous set of financial problems. What ever happened to judgment and patience?
First of all, it seems that it could be a good thing that the market is down. “Why?” you say? Because everyone learned today that their bank stocks were likely going down in the short run because banks were not going to be on the gravy train. That’s a good thing not a bad thing. It means that Geithner is really going to look at what’s on the balance sheets of these banks and decide whether they can pass the so-called “stress test,” and if they can’t (and we’re betting there are some big ones that can’t) because they have overvalued their assets, then they are going down. That’s a good thing, as long as there’s a plan for what to do when they go down, and I bet Geithner has some ideas but is being very careful about saying what they are before he sees those assets up close. But you know he has an idea of what he's going to do, yet he was extremely cautious to get ahead of himself at the hearing or to mis-characterize the true status any financial institution and thereby damage the institution's reputation.
Now listening to Geithner, who is a very articulate guy, I found him to be acutely sensitive to the dangers of this delicate situation (his own words) and so he isn’t jumping out ahead with a flashy plan until he gets a chance to look at what we’ve got. That’s a good thing. He appeared in front of the Senate committee today to begin a dialogue and to share with them his thought process, even though they were castigating him for coming to them without a plan wrapped up in a bow. As he talked, I thought that we should give this guy a chance because he really does seem to know what he’s doing, and he really seems to understand how very risky and dangerous is our current economic crisis. In this situation, would we want a bull in a china shop? Having a fully fleshed-out plan right now that just responds to everyone else’s theory could just be the height of irresponsibility. How long has he been Treasury Secretary - two weeks? One questioner at Obama’s town hall today said, “This situation is going to require patience, and the American people are notoriously impatient. How will you handle that?” Good question.
No one knows what to do. Both Geithner and Bernancke made that abundantly clear. But they think they know what to try. Why don’t we enter the dialogue rather than jumping to judgment right away? Floyd Norris of the Times and Paul Krugman seem to be willing to give Geithner some space. "It just could work."
Sometimes you have to implement stage one of a plan before you know exactly what stage two is going to be. We already have a three-ring circus going on with the White House, Congress and the Senate on the Stimulus Bill. Since many experts admit this situation is really unprecedented, couldn't we be giving more column ink to the idea that “this could just work” and discussing what might come next?
by virtual me on Tue Feb 10 2009 20:30:05 GMT-0500 (Eastern Standard Time)
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