Bailout Re-Do

From the AP: "Treasury Secretary Timothy Geithner met with the administration's top officials and advisers in recent days, trying to finish a plan to overhaul the $700 billion bailout program that is already half gone. Geithner previously said the administration is weighing the possibility of using a government-run "bad bank" to buy up toxic assets that are weighing on the books of financial institutions, but some officials now say that option is gone because of potential costs."

Wasn't this supposed be the original design of TARP? I originally supported the bailout precisely because I thought the government was going to conduct a reverse auction to buy bad debt from the banks. For reasons unknown to me, Hank Paulsen decided that that was not feasible. Geithner appears to have come to the same conclusion, although he only has $350 billion to work with, rather than the full $700 billion. I can only wonder what decision he would have made if he were in charge of the bailout from the beginning...