Geithner's Plan, Take Two

Worth Clicking: Blasts from the past wound Romney

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March 23, 2009

Geithner's Plan, Take Two

In advance of his second attempt to roll out a plan to buy up so-called "toxic assets" from banks, Treasury Secretary Tim Geithner pens a Wall Street Journal op-ed in which he says "the private sector will set prices" and "the taxpayers will share in any upside."

"This program to address legacy loans and securities is part of an overall strategy to resolve the crisis as quickly and effectively as possible at least cost to the taxpayer. The Public-Private Investment Program is better for the taxpayer than having the government alone directly purchase the assets from banks that are still operating and assume a larger share of the losses. Our approach shares risk with the private sector, efficiently leverages taxpayer dollars, and deploys private-sector competition to determine market prices for currently illiquid assets. Simply hoping for banks to work these assets off over time risks prolonging the crisis in a repeat of the Japanese experience."

Geithner will also meet with the press privately before the public rollout to answer questions.

However, Paul Krugman calls the plan "cash for trash" and says the latest effort "is more than disappointing. In fact, it fills me with a sense of despair."

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Taegan D. Goddard is the founder of Political Wire, one of the earliest and most influential political web sites.

Goddard spent more than a decade as managing director and chief operating officer of a prominent investment firm in New York City. Previously, he was a policy adviser to a U.S. Senator and Governor.

Goddard is also co-author of You Won - Now What? (Scribner, 1998), a political management book hailed by prominent journalists and politicians from both parties. In addition, Goddard's essays on politics and public policy have appeared in dozens of newspapers across the country, including the Washington Post, USA Today, Boston Globe, San Francisco Chronicle, Chicago Tribune, Philadelphia Inquirer and Christian Science Monitor.

Goddard earned degrees from Vassar College and Harvard University. He lives in New York with his wife and three sons.

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March 23, 2009