TREASURY'S PLAN: THEY'LL GET BACK TO US

In England, when fans of the top-tier Chelsea soccer club dislike the team's performance, they taunt the coach with a cruel chant: "You don't know what you're doing."

Investors reacted in a somewhat similar manner Tuesday after newly minted Treasury Secretary Timothy Geithner unveiled an incomplete, $2 trillion plan to bail out banks. Within hours, the Dow Jones and the S&P 500 indexes each lost about 5 percent of their value _ a harsh rebuke from Wall Street.

The primary features of Geithner's plan are a joint public-private fund to buy as much as $1 trillion in toxic bank assets, and a $1 trillion program to boost lending to consumers and businesses. That's separate from the $800 billion-plus economic stimulus bill working its way through Congress and last fall's $700 billion bank bailout.

The size of the Treasury rescue is massive, but officials couldn't give many details about how it will work.

For example, there was no explanation of how to value the banks' bad assets, nor how to get aid to homeowners to prevent more mortgage foreclosures. Geithner, who's been on the job for only two weeks, warned that the solutions to the credit crisis will take time. But the lack of details created the impression of another hastily conceived plan to put taxpayer dollars at irretrievable risk for questionable gain.

Taxpayers have seen the prequel, and it wasn't pretty. In the last few months of the Bush administration, then-Treasury Secretary Henry Paulson beseeched Congress for $700 billion to bail out banks. Congress agreed, and Paulson quickly dispersed half of the fund.

His action probably prevented a total meltdown in the financial industry, but it did little to ease lending or blunt the broader recession. Worse, the government cannot account for much of the $350 billion.

Many of the banks that took the first half of the bailout money don't feel obligated to say what they did with it. Wells Fargo, for example, may or may not have used some of its initial $25 billion to buy Wachovia. The government encouraged such behavior by handing out the money with few strings attached.

Geithner and President Obama vow this time will be different. They say they will insist on transparency, which should've been a basic requirement in the first go-round. They also want tougher conditions on banks receiving aid, including requiring institutions to document how the money spurred new lending. Those rules, and salary caps for CEOs, could help stamp out the largesse of some banks as they paid for corporate retreats and jets.

The package also includes $50 billion to stem mortgage foreclosures. Treasury will work with the Federal Reserve to reduce monthly mortgage payments and set up guidelines for banks to modify loans, action that is sorely needed. But Geithner wasn't ready to provide details on that plan, either, saying he will do so in a few weeks.

In an economy suffering from a widespread lack of confidence, the administration's rollout Tuesday only contributed to that mood.

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The following editorial appeared in the Miami Herald on Wednesday, Feb. 11:

END THE BICKERING OVER STIMULUS PLAN

In the three weeks since President Barack Obama took the oath of office, the need to act quickly to save the collapsing economy has become more evident. Last week's announcement that employers shed 598,000 positions in January _ bringing the total number of lost jobs since the start of the recession to 3.6 million _ was only the latest sign that this is no ordinary cyclical downturn but rather a crisis of frightening proportions.

That's all the more reason for urgency, but don't tell that to Obama's critics. The stimulus bill was approved in the House without a single Republican vote, and on Tuesday it won Senate passage with only three votes from the GOP.

Some claim to oppose the stimulus plan out of principle over the role of government in the economy, or out of genuine disagreement over the bill's provisions. But so far the critics have failed to make a strong case, and their determination to stick together despite calls for bipartisanship suggests that politics is the real driving force of the debate.

Obama's efforts to surmount political division go beyond gestures such as having Republicans over to the White House. He has made substantive concessions, calling for more tax cuts than many Democrats favored, agreeing to adjustments in the alternative minimum tax and dropping other stimulus provisions opposed by Republicans. "This is not about partisan politics," Gov. Charlie Crist said on Tuesday in introducing the president to an audience in Fort Myers. His GOP colleagues in Congress don't seem to be listening, however. They have condemned the stimulus package as a stinker that should be replaced by a package of huge tax cuts. Been there, done that, the Democrats reply, and we would have to agree.