I'm from the government, and I'm here to help you

Tim Geithner reveals that the Treasury has a plan to fix the problems in our broken capital markets by . . . er . . . fixing them.

The plan, which would ideally involve a mix of government and private capital, aims to stabilize the U.S. financial system by injecting capital into banks, helping to determine prices of toxic assets weighing on firms' balance sheets and stemming foreclosures.

"We believe that the policy response has to be comprehensive and forceful," Treasury Secretary Timothy Geithner said in his speech Tuesday. "Instead of catalyzing recovery, the financial system is working against recovery. And at the same time, the recession is putting greater pressure on banks. This is a dangerous dynamic, and we need to arrest it."

The Wall Street Journal adds that "critical details of the plan remained unanswered, despite the weeks of planning leading up to Tuesday's announcement."  Plan?  That's not a plan, it's a fervent wish.  No details at all on the foreclosure program, and precious few beyond platitudes about the mechanisms for dealing with toxic assets.   The only real new information is the amount:  $1 trillion total, $500 billion to start.

I don't envy Geithner his position.  But he's known this was coming for months.  I expected a little more than telling us that he wanted to spend a lot of money to help banks clean up their balance sheets.  We knew that much already.


Presented by

Megan McArdle is a columnist at Bloomberg View and a former senior editor at The Atlantic. Her new book is The Up Side of Down.

The 86-Year-Old Farmer Who Won't Quit

A filmmaker returns to his hometown to profile the patriarch of a family farm

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register.

blog comments powered by Disqus

Video

The 86-Year-Old Farmer Who Won't Quit

A filmmaker returns to his hometown to profile the patriarch of a family farm

Video

Riding Unicycles in a Cave

"If you fall down and break your leg, there's no way out."

Video

Carrot: A Pitch-Perfect Satire of Tech

"It's not just a vegetable. It's what a vegetable should be."

Video

An Ingenious 360-Degree Time-Lapse

Watch the world become a cartoonishly small playground

Video

The Benefits of Living Alone on a Mountain

"You really have to love solitary time by yourself."

More in Business

Just In