Tim Geithner blew it big time yesterday. Was he just stupid, or is there some other explanation? The answer to this question is important. If he’s stupid, we are all in for trouble in the days, months and years ahead. If he had his hands tied for some other reason, then it is possible that things will get better.
Geithner is not the new kid on the block. He knows the financial system like the back of his hand. He knows how bankers and those on Wall Street react and what gets their attention and what turns them on. To have had all the time pre- and post- inauguration to get a detailed and elegant plan together and then to have come forward with only the barest outline just doesn’t make sense. I don’t know the guy, but he has a reputation as a highly organized, detail oriented, and innately imaginative man.
If so, his actions yesterday were not those of a stupid person who didn’t know better. They had to have been occasioned by some constraints imposed on him by Obama or by the timing of the Stimulus Bill. I am betting that Obama is to blame. I don’t think Obama understands much about Wall Street and what moves and doesn’t move markets. I think Obama, worried that the “folks” just might get too confused (or worse, angry) by all the details, ordered Geithner to dumb it down. That doesn’t speak well for Geithner having a free hand, but it does offer hope that there really is more to the plan and to TARP II.
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