It was new Treasury Secretary/former New York Fed president Tim Geithner's idea to de-fang the executive pay cap and reposition the bailout to aid the banks, the Times says today in a page-one story about the internal debates within the Obama administration over how to spend the bailout money, and they do not like it. They do not trust Geithner, never have. He is a Wall Street lackey just like his predecessor, they say — without really saying it, because obviously, this is the Times and they don't give opinions, only facts — but this new plan proves it, because guess what? It's basically the same as the one the Other Guy gave us back in the fall.
For all of its boldness, the plan largely repeats the Bush administration's approach of deferring to many of the same companies and executives who had peddled risky loans and investments at the heart of the crisis and failed to foresee many of the problems plaguing the markets.
They go on to explain how not-different it is.
• "Abandoning any pretense about limiting the moral hazards at companies that made foolhardy investments," [Ed. !] "the plan also will not require shareholders of companies receiving significant assistance to lose most or all of their investment. Some officials had suggested that the next bailout phase not protect existing shareholders. (Shareholders at most banks that fail will continue to lose their investment.)"
• "Nor will the government announce any plans to replace the management of virtually any of the troubled institutions, despite arguments by some to oust current management at the most troubled banks."
• "Finally, while the administration will urge banks to increase their lending, and possibly provide some incentives, it will not dictate to the banks how they should spend the billions of dollars in new government money."
Another bad sign? David Brooks loves the thing.