Immaturity, incompetence

Yesterday's fiasco, in which Treasury Secretary Tim Geithner presented a new and "improved" solution to the nation's credit problems is a demonstration of what not to do. Here's what was wrong: First, an announcement like that needs to be done after the market has closed or on a weekend. Second, those responsible for making the announcement must understand how such an announcement might be perceived by Wall Street and the public generally. Third, a program like Geithner announced ought to be something that has been thoroughly worked out and tried before, successfully.

Geithner's announcement fails on all three. It is either incompetence or immaturity that explains the timing of the announcement, at mid-day when the market is still open. It is either incompetence or immaturity that explains why Geithner or Obama didn't anticipate that the market would drop precipitously after the announcement. It is either incompetence or immaturity, and perhaps arrogance, that explains the introduction of a plan that has never before been tried and found to work successfully.

Obama and Geithner are experimenting with the nation's economy and banking system. The "stimulus" isn't likely to do much other than increase the national debt. The banking system fixes aren't likely to fix the banking system. The constant flood of new, untried ideas, together with screw-ups like fumbled vettings of cabinet nominees and poorly timed announcements, have shaken the confidence of investors and nearly everyone else. Repeatedly overstating how bad the economy is and how dangerously under capitalized banks are aggravates the lack of confidence. Is it any wonder that banks won't lend and people won't spend?

Barack Obama is arguing that his administration can't just stand there, it needs to do something. It would be better for the country if the administration did the opposite.