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This was Timothy Geithner's first day in the spotlight. All three newscasts led with the Treasury Secretary's speech to unveil the Obama Administration's plan for the second phase of the bailout of high finance, which was dubbed TARP by Geithner's predecessor Henry Paulson. CBS and ABC led with their New York based business correspondents covering Geithner's speech, the Story of the Day. NBC sent anchor Brian Williams to Washington DC to start his newscast with a Geithner interview. Coincidentally ABC's Charles Gibson also anchored from Washington but he was not in the nation's capital on TARP-related business.

Geithner earned poor grades for his plan from Wall Street. "In this urgent climate the on-air analysts at CNBC were brutal in assessing the Treasury Secretary's speech," opined NBC's Williams, noting that the Dow Jones Industrial Average sold off by 381 points to 7888 in a single day. ABC's Betsy Stark heard complaints among stock traders that it was "a vague outline when what investors wanted were concrete details" and CBS' Anthony Mason noted that Wall Street critics "saw more of a concept than a plan." On NBC, CNBC economist Steve Liesman called it a failure of the expectations game: Geithner had led the financial markets to anticipate "a big bang bold move…They expected much more of him."

On NBC, anchor Williams spent more time on his interview with Geithner than on his TARP's elements. How bad is the problem? "Parts of our system are still very badly damaged." How much will the bailout end up costing? "Governments tend to underestimate the ultimate costs and damage." Should bank executives not be held accountable? "The quality of judgments you have seen across the financial system are just deeply troubling." Does the executive pay system need to change? "We need to try to transform the overall system of incentives around the financial system because those incentives were part of what caused this crisis."

ABC's Stark and CBS' Mason both focused on the elements of the Geithner plan, its lack of details notwithstanding. For the banks, he used a medical metaphor, proposing a stress test of their soundness. For so-called toxic assets, he proposed an investment fund to act as a so-called Bad Bank, funded by both federal and investor capital. For the consumer economy, he proposed that the Federal Reserve Board extend credits for automobile sales, student loans and small businesses.

An innovative element of the bailout is a plan to loosen banks' credit card lending by buying bundles of asset-backed securities based on that debt. CBS aired an animated Fast Draw explainer by Mitch Butler and Josh Landis showing how that might persuade consumers to start shopping again. CBS' Mason teased the Treasury Department for its overall lack of details by pointing to its Website where Geithner's scheme is spelled out: the home page of financialstability.gov has the following message: "Future home of financialstability.gov."


Andrew Tyndall 2/12/09 3:07:07 pm

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