Tuesday, February 10, 2009

Less Than Thoughtful

Today, Treasury Secretary Timothy Geithner announced the Obama Administration stabilization plan and Wall Street responded with a resounding thumbs down. The plan as announced by Treasury Secretary Timothy Geithner leaves the Banking Industry in the same situation as before the plan was announced, that is in disarray without any idea of the value of the paper that are on their balance sheets.

Not only does the Treasury Plan fail to address the underlying problem of how to evaluate the assets that led us to this point, it fails to address a cohesive formula for going forward and preventing the effects of these assets from continuing to affect the general economy. Judging by an immediate 300 point drop in the Dow Jones Industrial Average, the investor class is not willing to buy this plan as presented by Treasury Secretary Timothy Geithner.

With all the money that has been doled out by the Treasury, The Federal Reserve and the Federal Government, it seems that there should be some progress or at least a road map that can be followed to get us to the end of this destructive path. Granted that the problem was caused over eight years of the Bush Administration and it will most likely take a decade to resolve, however, the plan to take us through the decade of revitalization should be clear and concise.

There is nothing in this plan to bring the consumer back to the cash resisters, and in a consumer oriented economy that would seem to be the first consequence that should be met. Maybe a more comprehensive solution would have been to eliminate the consumer debt instead of the bank debt. If consumers received the same fresh start that the Treasury is hell bent on giving the banks than the natural flow of spending from the consumers would spur on economic growth the right way, from the bottom up, instead of the backward approach of the top down that was the Republican Solution and that has now been taken as policy by the new Administration.
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