David Corn

On Monday, as I was heading to the White House for the daily briefing, I ran into one of President Barack Obama's senior economic advisers. This person was holding a shopping bag from a bargain retail outlet.

"Shopping?" I asked. "On a day like this?" I was referring to Treasury Secretary Timothy Geithner's unveiling of the administration's toxic assets purchase program.

"I'm not making any announcements today," this economist said.

I noted that the plan seemed a pretty good deal for the banks holding the junk and for the financial firms that will receive federal insurance to cover most of the purchase price of the assets they buy.

"It's not the only way to do this," this person said. "There are lots of ways you could do it."

Lots of ways? At Geithner's press briefing that morning, Geithner had repeatedly insisted that the administration did not have many alternatives to its proposed program. Without such a plan, he said, the government would either have to buy up all the toxic waste on its own, or it would have to stand idly by as financial institutions fold and the credit system further collapses. But this economist was suggesting there was an assortment of actions the feds could have tried. I wondered about Geithner's line--which would be echoed later in the day by White House press secretary Robert Gibbs--that his plan was the only reasonable course of action.

But, I asked, will this particular way work?

It could, this economist replied, with a shrug. But then she/he switched the subject and criticized Christina Romer, the chair of the White House Council of Economic Advisers. The day before, Romer had said of the firms that will be participating in the toxic assets program: