Well now we have an idea as to why Geithner’s unveiling of the stimulus package sucked. According to the Washington Post, a few days before the scheduled announcement date, Geithner discovered that the plan would not work, and he had to change it.

He wanted to do his “bad bank” thing, but, as people have been saying for weeks, if you pay fair value, the banks are insolvent, and if you pay enough to keep them afloat, then you waste trillions of taxpayer dollars.

So, now we have the public-private partnership and “stress tests”.

The question is whether he made this choice because he realized that he wrong, or if it was because he knew that he couldn’t sell the bad bank.

Given Geithner’s history, his last job was as an employees of those investment banks, I believe that he still wants to bail out the banks with no cost, but he hasn’t been able to figure out a way to sell it.

Bill Moyers has an interview with former IMF chief economist Simon Johnson, and he says that we need to break the oligarchs who got us into this situation, just like the IMF did with 3rd world nations. (video and transcript at link)

I agree with Mr. Johnson on nationalization pre-privatization, and I do not believe that Timothy Geithner will do this.

His career has been made as a protege of people like Lawrence Summers and Robert Rubin, and so he is joined at the hip to Wall Street.