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Megan McArdle has some smart critical thoughts on Geithner. "Treasury didn't just fail to deliver a plan; it actively made things worse," she says. Uncertainty isn't between a good plan and a bad plan: It's an accelerant to the problem of bank insolvency. "No one wants to invest in a bank that might be nationalized, and no one wants to deposit substantial funds in a bank that might not," If the uncertainty does indeed artificially chill investment and deposits even as debts don't stop mounting, that makes insolvency for any given institution likelier that it needs to be.Her post also makes me think of something a friend said the other day: The tragedy of the transition was that Geithner's tax problems emerged before Daschle's. It's bad to be the first offender. But it's much worse to be part of a pattern. Michael Kinsley explained this well at the time:
The main reason that Geithner survived while Daschle didn’t is that Daschle came second. Second is exactly the wrong place to be. The malefactor who comes first gets away with it because the issue is new and we’re not entirely sure how angry we are supposed to be about it. The one who comes fourth or fifth likely gets away with it because we’ve started to get bored with the story line and, anyway, our bloodlust has been satisfied. But the malefactor who comes second feels the full fury of our wrath.Daschle, it seems, was less replaceable than Geithner. You could have quickly and cleanly put Summers -- or possibly someone else entirely -- at Treasury and likely had equivalent or better outcomes. But both the Office of Health Reform and the Health and Human Services positions remain unfilled, largely because there's no one else who can quite step into the health policy structure the administration had constructed special for Daschle.
