Joseph Stiglitz, like Ulysses, Nouriel Roubini, Dean Baker, and others has apparently been named "Nobody." As in Nobody saw the collapse coming. "Nobody" predicted what is happening now. And so on. Perhaps even, "Nobody" has the answer.
Stiglitz captured the Geithner plan as well as anybody when he told Tom Keene at Bloomberg that it was an attempt at price discovery, but instead of the asset price, the process discovers the price of an option on the asset which involves a big guarantee of downside protection written by the taxpayer.
This is elementary. Attempts to finesse and end-run the reality are doomed to die in the Siberia of policy error. Only when we face facts will we get the financial sector fixed.
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