Monday, 9 February 2009

Lacking brutality


Information Arbitrage thinks, and I agree, that the Geithner plan due tomorrow will fail.
Why? Excessive complexity. For a plan of this magnitude to work, it needs to be straight-forward, easy to understand, clearly communicated, brutally transparent, and ruthlessly executed.
Certainly the bailouts have revealed that the US system is not good at generating simple, easy to execute schemes. Remember how the first TARP went from 3 (admittedly ridiculous) pages to 451 pages in its legislative passage? You can't govern effectively if you have to throw ten pages of stimulus at every single interest group in order to get something passed.

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