Ezra Klein reports on Larry Summers’ talk yesterday:
Summers […] argued that the administration was right to be vague on its banking plan. Specifics, he said, could only come after the stress tests reveal what action is needed. That sounds sensible enough, though it’s hard to say whether that’s been the plan along or it’s just the plan now that no one liked Geithner’s original banking proposal.
I too think that a bit of vagueness might have been justified here. It’s better than rolling out a detailed but half-baked proposal that gets immediately shot down. However, if that was the plan all along, then surely President Obama wouldn’t have said this 12 hours before Geithner took the podium:
[T]omorrow my Treasury secretary, Tim Geithner, will be announcing some very clear and specific plans for how we are going to start loosening up credit once again.
There are a few possible explanation for this: (a) Obama is an idiot, (b) Obama wasn’t up to speed on what Geithner’s plan was, (c) everyone in the administration was under the impression that Geithner’s plan was “very clear and specific,” or (d) they changed their minds a lot in the days and hours leading up to the announcement. I’m guessing the answer is (d).