Krugman Tempers His Tune

If you read Paul Krugman week to week, you know he isn't a fan of Timothy Geithner or Geithner's plan but in his column today, you can tell that he's softened his stance on the banking fix by a wee little bit:

But whether you actually should feel reassured depends on who you are: a banker, or someone trying to make a living in another profession.

I won’t weigh in on the debate over the quality of the stress tests themselves, except to repeat what many observers have noted: the regulators didn’t have the resources to make a really careful assessment of the banks’ assets, and in any case they allowed the banks to bargain over what the results would say. A rigorous audit it wasn’t.

But focusing on the process can distract from the larger picture. What we’re really seeing here is a decision on the part of President Obama and his officials to muddle through the financial crisis, hoping that the banks can earn their way back to health.

It’s a strategy that might work. After all, right now the banks are lending at high interest rates, while paying virtually no interest on their (government-insured) deposits. Given enough time, the banks could be flush again.

But it’s important to see the strategy for what it is and to understand the risks.

That softening up says to me, Geithner's plan might actually be working out after all. Sure seems to be. The left often uses guilt by association to condemn Geithner, which is odd, seeing that they're the left and they're supposed to know better.
Geithner on Charlie Rose:

Watch the full episode here.