Liberal Economist Slams Geithner Plan

Does Paul Krugman need a tag-team partner? In a New York Times op-ed Nobel Prize winner Joseph E. Stiglitz slams Timothy Geithner’s and President Obama’s $500 billion bank rescue plan, saying it recreates the situation that led to the financial crash—it uses "overleveraging in the public sector, excessive complexity, poor incentives and a lack of transparency." In the Geithner plan, the government essentially takes on banks' losses by overpaying for toxic assets, a system Stiglitz calls "far worse than nationalization." In fact, he argues, nationalizing the banks would be preferable to the Geithner plan, which essentially privatizes gains and socializes losses.