After another rough week on Wall Street, Americans wake up this morning to find there's been yet another late night weekend scramble by federal regulators to shore up a struggling financial giant. According to news reports, the result is the approval of a "radical plan" to save Citigroup that involves a $20 billion infusion of cash and backstopping some $306 billion of the company's toxic debt. Welcome to another week in the brave new world of the economic crisis.
Amid this austere backdrop, Barack Obama is set to announce his economic team this morning at 11 am central time in Chicago. Among the folks who the new president is tapping to help pull the US economy out of the ditch are Tim Geithner, Larry Summers, Peter Orszag, and Austan Goolsbee. Geithner, whose name was leaked on Friday as Obama's pick for Treasury, has been lauded as a smart choice by folks across the ideological spectrum.
The talk now is all about stimulus, with Democrats pushing to ready a $500-$700 billion spending package for President Obama to sign immediately upon taking office on January 20. The stimulus will reportedly include massive infrastructure spending, an infusion of cash into green technology, and Obama's campaign pledge for targeted tax cuts for the midle class.
And, of course, there are the struggling automakers, who've been told to come back to Congress with their hat in one hand and a plan in the other. Former Michigan Senator and Secretary of Energy Spencer Abraham makes the case for bailing them out in today's New York Times.
On the same page, Bill Kristol argues that the dirty little secret is that we're all "flying blind" in the current crisis. Despite the pronouncements of economists of all stripes, Kristol writes, "The markets are spiraling down, and our leading experts don't have much of a clue as to what to do."
The one consensus, which continues to survive despite the less than stunning results of the initial $700 billion bailout passed by Congress a few weeks back, is that taking action is better than doing nothing. So Americans can expect to continue to see their government engaged in the political equivalent of a Chinese fire drill, running to and fro throwing vast sums of money anywhere they think might help stave off further economic pain. As I said, welcome to another week in our brave new world.
