Regarding yesterday's Senate passage of an economic-stimulus plan and Treasury Secretary Tim Geithner's presentation of the outlines of Financial Rescue, Part Two, the financial markets reacted immediately — mainly to Geithner's presentation, it seemed — with a substantial downer.
Two things were troubling about Geithner's presentation. First, it provided a very general framework without giving enough details to let anyone know exactly how his plan would work. You could see, down the road, how his "public-private partnership" might work in bolstering financial institutions and disposing of their presently toxic assets. But you could only guess.
The second troubling matter was Geithner's demeanor in making the presentation. He clearly was nervous, spoke too quickly, and was not in command of the podium or the room at the Treasury Department. (I could only think how Paul Volcker, head of the advisory panel on the rescue, might have left an impression that all was in steady hands and that technocrats would soon provide missing detail.) Perhaps it was Geithner's near-death experience in his confirmation hearings, when he had to explain why he had not paid prior taxes, or the fact that he rushed forward with a plan before it truly was ready. Whatever the reason, he, President Obama, and the country would have been better served by delaying a few days, during which the plan could have been fleshed out.
Bush Treasury Secretary Hank Paulson, working with Fed Chair Ben Bernanke and Geithner, then at the New York Fed, presented Part One of a rescue plan with far less backup than Geithner had yesterday. Then, once Congress provided money, the plan was changed. But that was then; this is now. Months have passed in which things could be fleshed out. Plus, we are now talking trillions more in public money before the financial-sector bleeding ends.
Both Geithner and President Obama need to present more confident, measured personas in their public statements about the current crisis. The mixture of dire warnings, charges of Republican partisanship, and Obama's recent barnstorming probably have not helped. The American people need to form a mental picture of a President, Treasury Secretary, and other public and private advisers, sitting calmly around a table putting together a plan which is conceptually understandable and coherent yet sufficiently detailed that financial types and analysts can agree that, yes, this can work. Steady and stable.
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