PETERSON | ‘Treasured’ options: Geithner faces daunting task with bailout

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I rationalize the current situation of the financial crisis with whether someone can understand smoke signals.

When people notice a plume of smoke rising in the air, they will either understand the message in the signals, or if they do not, they will exclaim, “Hey, what’s with the smoke over there?”

Economists are typically the ones who sense the smoky details behind such a colossal undertaking with the markets. Regular citizens who can only gather an ember of truth here or there will take large quantities of information from economists to decide their own investment futures.

With the Obama Administration, via Treasury Secretary Tim Geithner, rolling out its plan this week to deal with the fiery situation of handling the millions of bad mortgages and other complicated risks made by advantageous and reckless investment firms and corporations, economists are paying attention to what opportunities they can gather from the flotsam and jetsam left behind after the economic tsunami of late 2008 hit with such devastating force.

Although the jury is still out on whether the government can and should buy up the singed remains of these hastily structured and ultimately ill-advised loans, economists are noticing the potential for opportunity. The loans could be treated like a garage sale.

The banks have no use for such bad loans, so the government will buy as many as possible in this fire sale of assets and give the banks the capital they need to make good loans again, which should restart the economy.

The hardest customers in all of this will be the taxpayers and the lawmakers who represent them. Government involvement at this level will draw the ire of Republicans, while Democrats are not comfortable with further alleviating a financial market that has not made wise decisions despite the warnings of the oncoming firestorm.

Nonetheless, there is opportunity where there once seemed to be none. None of us should take this as the only surefire solution, but it is an idea that should be taken under advisement for the American people, and will be part of the methods to reignite our economy.

Keep in mind that the Treasury Department has numerous positions to fill, including the deputy position to the treasury under Tim Geithner, providing the notion of how intriguing this economic problem has become: Most professionals asked to join the treasury are reluctant because of the stresses involved. All things considered, Geithner has done well for being shorthanded, and any suggestion to remove him for previous snafus would burn down the work already completed.

The U.S. can and will get out of this mess. The financial well-being of a country is a terrible thing to see go up in smoke.