At 8:55 a.m. Monday, Treasury Secretary Timothy Geither strode into a room packed with reporters to sell a new plan to unfreeze bank lending so consumers and businesses can get loans.
The mind-numbing details occupy 17 pages of a Treasury Department fact sheet that reporters were given before Mr. Geithnerâ€™s 36-minute appearance. The quick version: The government will work with private investors to purchase between $500 billion and $1 trillion of bad loans and securities that have been clogging the nationâ€™s financial system.
A plan that dominates
A youthful looking Geithner, dressed in blue suit, blue shirt, and red tie, argued that without the plan there would be â€śgreater headwinds for the economy and deeper recession.â€ť Warming to the sales job, he added that, â€śthis scheme dominates all the alternatives.â€ť
Beyond selling the governmentâ€™s latest effort to resolve the largest financial crisis since the Great Depression, Geithnerâ€™s other task this morning was more subtle but equally urgent. He needed to convince the gathering of some 90 reporters â€“ and the public â€“ that he is qualified to lead the Obama administrationâ€™s economic-recovery efforts.
Geithner has been the target of considerable criticism for what critics say is less than decisive handling of the financial crisis. The potshots intensified recently with news the American Recovery and Reinvestment Act allowed executives of AIG to collect million dollar bonuses even though the firm had taken billions in federal bailout money.
A crisis of confidence
The top Republican on the Senate Banking Committee, Richard Shelby of Alabama, said on Sunday that his confidence in Geithner is â€śwaning every day.â€ť Speaking on â€śFox News Sunday,â€ť Senator Shelby said, â€śIf he keeps going down this road, I think that he wonâ€™t last long. He is probably on shaky ground now.â€ť
The secretaryâ€™s boss has a different view. On â€ś60 Minutesâ€ť the same day Shelby spoke, President Obama called Geithner â€śas sharp and as skilled a public servant as we have.â€ť
At Mondayâ€™s briefing, the Treasury provided a 22-page color document, which could be seen as detailing some of Geithnerâ€™s accomplishments. With the catchy title of â€śProgress and Update on Financial Stability Plan,â€ť it lays out both the problems facing the nationâ€™s financial system and what the government is doing to solve them.
Fine points lost in the telling
A former president of the New York Federal Reserve Bank, Geithner appears reserved by nature. And he faces the challenge of explaining extremely complex and controversial transactions and programs through the press, an institution not noted for its attention span or appetite for fine points.
As Geithner wryly noted during the question and answer portion of Mondayâ€™s presentation, â€śIâ€™m very confident you and your colleagues will do a good jobâ€ť explaining the new lending plan.
The new approach is not without risk, the Treasury secretary admitted. â€śThere is no doubt the government is taking risk. You cannot solve a financial crisis without the government taking risk.â€ť
We are not Sweden
After a period where individuals and companies took on too much risk, the greatest risk now, Geithner said, â€śis that the system will not take enough risk nowâ€ť and use the new public-private investment program. But he said that, functioning as a backstop, the program â€ścan have a big impact on behavior even if there is relatively limited use.â€ť
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