WaPo: Late Change in Course Hobbled Rollout of Geithner's Bank Plan (February 17, 2009)
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.
Moreover, the department made a strategic decision to limit input from the financial industry and other outsiders, aiming to prevent leaks and avoid a perception they were designing the plan for the benefit of big banks. But that also meant they were unable to vet their plan with the companies involved or set realistic expectations of what would be announced.
The team concluded that the financial rescue effort would have to include several components. None would be more vital than an initiative for either removing or neutralizing the distressed assets on the banks of books -- many related to troubled mortgages -- so the banks would be freed to resume lending.
How the economy went so bad, so fast and what Bernanke and Paulson didn't see, couldn't stop and weren't able to fix.
Watch it. Putz cameos epitomize the ambivalence of analyses of "insider" knowledge and arbitrages. The directors portray Bernanke, Paulson and Geithner as tragic hereos, defenders of free market entrepreneurial spirit, foes of financial industry regulation intervention nationalization. Many solemn B/W stills disrupt streams of trading mania and testimony by journalists, the avuncular Greenberg, the hubris of Fuld. Diversity is the key to economic and political evolution.
