Geithner and Keynes

US Treasury Secretary Timothy Geithner echoes Keynes in an article published in the WSJ:

Simply hoping for banks to work these assets off over time risks prolonging the crisis in a repeat of the Japanese experience.

The Public-Private Investment Program is better for the taxpayer than having the government alone directly purchase the assets from banks that are still operating and assume a larger share of the losses. Our approach shares risk with the private sector, efficiently leverages taxpayer dollars, and deploys private-sector competition to determine market prices for currently illiquid assets.

When financial institutions come to us for direct financial assistance, our government has a responsibility to ensure these funds are deployed to expand the flow of credit to the economy, not to enrich executives or shareholders.