Cramer defends Geithner

To be clear, he’s defending the Geithner bank plan, the one that's gotten reamed on Wall Street as inadequate and lacking in detail. It's a big switch for CNBC’s "Mad Money" host, who up to now has not been a fan of the Treasury Secretary (practically no business experience and too closely connected with the disastrous Bush policies, sez Cramer). That’s in contrast to much of the financial community who believed the former president of the NY Fed would be capable of unraveling the credit mess – despite his Bush connections - and who are now scratching their heads. Here's how he sums up the proposal in NY magazine:

In ... the Geithner plan, we try to figure out which banks are worth saving, we tide them over by giving them capital, and we forbear—we look the other way for a time—regarding their capitalization problems until the nation finds its financial footing and those banks are solid again. The taxpayer pays some of the bill up front—hundreds of billions, actually—but the cost is much lower to each of us than it would be if we nationalized the major banks and crafted a toxic bank for their crummy loans. Meanwhile, we place restrictions on how banks use taxpayer dollars (limit excessive executive pay, encourage lending over hoarding), and eventually, when the economy and the banks recover, they’ll be able to repay the government. Yes, the details remain to be worked out, but the principles are sound.