March 21, 2009

what an awful mess . . .

Okay, I've promised myself to give the President the benefit of the doubt for a full six months, and I will continue this course because I realize I am not in a position to fairly judge day by day decisions until either there is a pattern (as there was early with W - a pattern of deceit and incompetence for the most part) or enough decisions have been made that it appears there is no real overall goal. Economics is not my strong suit. But, here is the person whose judgment I've learned to trust saying that under President Obama the Treasury has decided that what we have is nothing but a confidence problem. This bothers me.

The Geithner plan has now been leaked in detail. It’s exactly the plan that was widely analyzed — and found wanting — a couple of weeks ago. The zombie ideas have won.

The Obama administration is now completely wedded to the idea that there’s nothing fundamentally wrong with the financial system — that what we’re facing is the equivalent of a run on an essentially sound bank. As Tim Duy put it, there are no bad assets, only misunderstood assets. And if we get investors to understand that toxic waste is really, truly worth much more than anyone is willing to pay for it, all our problems will be solved.

I'm not freaking out yet, but I must admit that I'm watching the calendar.

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