Alexander Hamilton, J.P. Morgan... and Tim Geithner?

Jim "Geithner-makes-me-sick!" Cramer suddenly becomes a Treasury Secretary fanboy. Could this economic crisis get any weirder?

By Andrew Leonard

Published February 13, 2009 9:54PM (EST)

Jim "Mad Money" Cramer just sent my head spinning round so fast that my brain became completely unscrewed from my neck and everything I've learned about how the economy (doesn't) work in the last three years evaporated into thin air with an accompanying blasting hiss of boiling steam. In a new column in New York Magazine, "James J. Cramer Defends Tim Geithner," the hopped-up CNBC stock picker declares that Geithner's much mocked financial stabilization plan, which debuted to a deafening round of boos on Tuesday, is the right answer for Wall Street's woes:

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.

This is the same Jim Cramer who said in November that the thought of Geithner as Treasury Secretary made him physically "sick," who denounced him on his "Mad Money" show as a press manipulating slick operator who managed to let Lehman Brothers fail while escaping the blame.

Cramer acknowledged his past criticisms; in fact, the first third of his column is a stinging recapitulation of them. Then came this week:

Geithner is famous for currying journalistic favor through background interviews that erase his fingerprints from every major financial crime scene. He could take credit for the good and shunt the bad to others, and the Lassies in the press would be good to their master. Not this time. This time Geithner spoke, not through his journalistic minions or Wall Street acolytes, but on national television, telling people the sobering reality of what has yet to be done to save the system. The verdict? A near 5 percent decline in the averages, the worst bludgeoning of the year.

And you know what's ironic? I think that with this plan, he's actually got it right. The press, the pols, the Wall Streeters -- they are all dumping their golden boy just when he's figured out how to solve the most intractable set of financial woes since the ones that landed on FDR's desk 76 years ago.

And then Cramer, of all people, dismisses the market reaction in his big finish.

Despite what the markets said, Geithner got a lot of things right last week: His plan is big and bold, economically sound and politically viable (no nationalization, no more cost to taxpayers than absolutely necessary). If he's as great a man as those who criticized me for knocking him say he is, then he'll flesh out the details in the next few weeks and marshal the forces to get it through Congress. I hope that Geithner's still got enough Teflon to see him through this brutal moment. If he does, he could wind up worthy of the Hamilton-Morgan mantle. If not, there's a whole lot more pain in store before we're in the clear.

Alexander Hamilton, J.P. Morgan... and Tim Geithner? Excuse me while I snap my skull back together.

Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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