The Washington Post, apparently very well-sourced at the Treasury Department, has a nice tick-tock explaining Tim Geithner’s disappointing performance last week.
Basically, Geithner changed his mind at the last minute and had to wing it. Not exactly confidence-inspiring leadership, as the stock market was quick to deduce.
According to several sources involved in the deliberations, Geithner had come to the conclusion that the strategies he and his team had spent weeks working on were too expensive, too complex and too risky for taxpayers.
They needed an alternative and found it in a previously considered initiative to pair private investments and public loans to try to buy the risky assets and take them off the books of banks. There was one problem: They didn’t have enough time to work out many details or consult with others before the plan was supposed to be unveiled.
It’s not as if Geithner’s walking in there a virgin. He’s been intensely involved with the various bailouts for a year and a half, as the Post helpfully points out. If he’s ever going to get a handle on this thing, you’d think he’d have it by now.
The paper also points out the political errors that helped blow up the announcement. The most interesting, and worrisome, is that the Treasury Department is short-staffed. Couldn’t they have kept some of the Bush folks on a while until they got their own?
To date, the president has not nominated any assistant secretaries or undersecretaries at the Treasury, and the handful of mid-level staffers who have started work were still finding their offices and getting their building passes and BlackBerrys.
Whoever’s talking to the post is clearly not in the Geithner camp, raising more questions in my mind about the stability of the new administration’s economic team.
But that doesn’t mean the Post story is tilted against Geithner—he gets a fair shake. This is just good beat reporting.