I want to be clear that even though I ripped it apart this morning, my opinion of Geithner’s plan is largely unformed. But my predominant view from weeks ago still applies: the problem itself is so tremendously complicated, I can’t imagine trying to form a solid plan to unravel it all without pissing off a lot of people and risking a lot of capital.
Meanwhile today, very smart economic bloggers Atrios and BooMan have been battling over the thing. While I’m presently leaning in direction of the anti-Geithner Krugman/Atrios camp, BooMan is making some compelling arguments in support of the plan. Mainly, he writes, the assets in play aren’t nearly as poisonous as (collectively) Team Krugman is suggesting. And the truly poisonous assets aren’t included in the plan.
Even Thom Hartmann yesterday admitted to a seriously good upside if this thing works, but warned of a terribly brutal downside. But that’s my chief problem so far — it seems like a huge bet on a lot of bad gambling instead of taking a safer and seemingly cheaper approach, which is to buy up the questionable mortgages at the bottom — good or bad.
