Geithner Plan

"So the Geithner plan is really two bets in one. The first is that this is not the worst case scenario and does not require the fixes developed for the worst case scenario. The second is that if this turns out to be the worst case scenario, then we still have those fixes available to us, and the need is clarified among the actors -- like Congress and the market -- whose reaction in the absence of consensus could scotch the whole thing" - Ezra Klein, The American Prospect

I'd say this is as succinct an explanation as I've seen yet for the underlying rationale behind the administration's possible thought processes on solving the banking crisis. And for me this 'keeping bullets in the gun" approach does indeed seem a prudent course of action, politically speaking. The predominant counter view comes, not surprisingly, from Paul Krugman who argues, as is his general wont, that Geithner's plan will cause the sky to fall.

I have a love/hate thing going with Krugman and I'm willing to bet I'm not alone. As befits an economic Nobel laureate, he's often spot on in his analysis, especially when forecasting long term economic trends. However, for me he generally skews dangerously close to demagoguery; I have a difficult time taking anyone seriously who so often seems to see issues in absolutes. That is, in my opinion Krugman devalues his contributions to economic science by being so rigidly and unceasingly political. He so routinely chooses to use his column as a forum for promoting the progressive agenda that it has become difficult, if not impossible, to perceive him as an honest broker. Consequently, in moments such as the present crisis, during which his considerable scientific skill might be brought to bear to help solve problems and provide perspective, his credibility becomes as much the issue as his analysis. Accordingly, I read Krugman unfailingly but take everything he has to say with a grain of salt and run it thoroughly through my bullshit-o-meter. In this circumstance I find Klein's thoughts on Geithner's plan to be both more measured and objective than his.