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Robert Kuttner takes a look at Timothy Geithner’s recent missteps:
--The Editors
Geithner has unveiled a Rube Goldberg of a second bank bailout that won no plaudits anywhere on the spectrum. The idea was to reassure financial markets by resisting nationalization of failed banks. But the financial markets took one look at the plan, and the Dow fell by almost 400 points. As well it should have. This is not a plan that fixes Wall Street. It is a plan that rebuilds it using the very profit-hungry traders and exotic financial instruments that caused the crisis in the first place.And Dean Baker says that there’s an easy way to find out if the bank rescue plan is working as it should:
[W]e don't have to follow the individual trades to know whether the taxpayers are being ripped off. We just need to ask some more basic questions like "How much will this thing cost?" If the answer is anywhere much more than zero -- as Geithner suggested it will be -- and we still see that bank stocks carry significant value and bank executives continue to hold on to their high-paying jobs, then we will know that we have been had.Today’s Thinking Big, Thinking Forward conference, co-sponsored by the Prospect, offers more insights on how the economic crisis should be handled. For those in D.C., the conference is still accepting walk-in registrations. Otherwise, follow our own Tim Fernholz here at TAPPED as he continues to live blog the event throughout the day.
--The Editors
