Mr. Obama placed the bailout, which was bungled by the previous administration, in the hands of new Treasury Secretary Timothy Geithner, who yesterday failed to convince anyone that the credit situation will improve soon. The stock market reacted by tumbling nearly 400 points.
"He wasted three or four hours of the Senate's time and we want to know where the specifics are and he doesn't have them," said Sen. Richard Shelby (R-Alabama) in evaluating Geithner's presentation.
The problem for Geithner, and the Obama administration, is that they are trying to be measured and cautious about applying solutions when the economy is melting down and confidence in the markets continues to wane. It's not Nero fiddling while Rome is burning, but instead of presenting a specific, detailed plan of action, Geithner offered the broad outlines of a plan, noting that the credit problem is "going to take a lot of time to resolve."
Nor did Geithner's statement about how complicated the financial recovery will be help to restore confidence. Speaking with CNBC, Geithner said in response to a question valuing the toxic assets, "We are going to be very careful to get this right. And we are not going to put out details until we are confident that we've got the right structure that is going to achieve these objectives to try to bring private capital in along side government financing to help get these markets working again."
Geithner went on to say, "This is enormously complicated. There are a million ideas out there about how to do this, but what we need to do is try to make sure we are being exceptionally careful...that the taxpayer is being protected, we are taking risks we understand and that we are using these resources in a way that is going give the maximum benefit in getting these markets going again."
"We are going to consult widely and we are going be very open to suggestions," he added. "There are lots of ideas out there, but this basic structure which will leverage private capital with government financing, we believe offers the best prospect, again, to get achieve this basic benefit to get these markets working again with the least risk to the taxpayer, not having the government understand the basic risk we are taking."
What kind of confidence does Geithner inspire when he talks about the "enormous" complexity and that there are millions of ideas or approaches to consider? You are left with the impression that the best and brightest thinkers on the economy, the equivalent of giant supercomputer, can't wrestle the economic problems to the ground.
The problem is that Geithner is being honest and straightforward about the road ahead, and admitting that he hasn't figured out the best approach to reduce the risk to taxpayers and move the markets. The complexity is real and the future risky. This isn't a politically prudent way to build public support or political capital, but it is the Obama administration's goal to change the way Washington works with more "transparency," even if the details are scant, and to deter unrealistic expectations.
While the cautious, measured approach makes intellectual sense, there is intense pressure to come up with a detailed plan right now in the face of Geithner's "enormous complexity."
In his prime time press conference, Mr. Obama outlined his charge to Secretary Geithner, "... my instruction to him has been let's get this right, let's create a template in which we're restoring market confidence. And the reason that's so important is because we don't know yet whether we're going to need additional money or how much additional money we'll need until we've seen how successful we are at restoring a sense of confidence in a marketplace that the federal government and the Federal Reserve Bank and the FDIC, working in concert, know what they're doing."
So far the template to restore market confidence hasn't worked, and among the millions of ideas, Geithner needs to settle soon on a few that have the best chance to get the banking system back on track. He can't afford to be exceptionally careful for long.
Daniel Farber is editor-in-chief of CBSNews.com.