By Liz PeekFinancial Columnist

The market gave Treasury Secretary Geithner's new financial rescue plan a resounding Bronx cheer yesterday, with the Dow closing down almost 400 points. Every recent hint of reviving investor confidence -- rising Treasury yields, rebounding housing stocks and stabilizing financials, gave way before the torrent of disappointment.

[caption id="attachment_7131" align="aligncenter" width="300" caption="Treasury Secretary Timothy Geithner on Feb. 10 (AP file photo) "][/caption]

The not-ready-for-prime-time plan was roundly criticized for being long on policy and short on action. Geithner spelled out, once again, the goals of the administration, but failed to fill in the blanks. None of the knotty problems, such as how to price the toxic assets gumming up bank balance sheets or whether the government would guarantee purchases of those assets, was addressed.

The really crushing aspect of the program's shortcomings is that it feeds the budding anxiety that President Obama is not up to the job.

The various aspects of the plan appear likely to take weeks if not months to adopt. Mr. Obama has been railing at Republicans in Congress about the urgency of the task before us; he apparently forgot to tell Mr. Geithner.

A key element of the new Financial Stability Plan is the desire to mobilize private money to buy up some of the distressed assets on bank balance sheets. It is hard to conjure up a more complicated matter, both economically and politically. Imagine the public's reaction when it turns out that some hedge fund manager who made $400 million last year gets a government assist to ad to his earnings. Transparency, a goal of the Obama plan, is not exactly the hallmark of the hedge fund industry.

The fuzzy nature of Geithner's proposals combined with the perception that the administration was going to take a harder line with banks crushed any investor enthusiasm for the sector. It is remarkable that administration officials did not anticipate this reaction. Investors need certainty, and this plan failed on all fronts to provide even a whiff of reassurance. The notion that the government was going to apply a severe "stress test" to the largest banks raised concerns about eventual nationalization of those institutions that still harbor toxic assets.

Suggestion: this may not be the very best of times to tighten the screws on the banks. Such an approach can only cause managements to hunker down further, building their balance sheets and conserving cash.

Mr. Geithner knows this. Unfortunately, this administration is allowing politics to interfere with logic. They are responding to the populist outcry over Wall Street bonuses and John Thain's waste basket. Taxpayers are angry, but here's a message to Obama, Geithner, et al: voters don't care how you bring back the good times, they just want the good times. They want credit to start flowing, even if it means stretching the Fed's balance sheet and dumping esoteric mark-to-market accounting rules. Mucking up a rescue package with sops to those who dislike free markets is a disaster.

The really crushing aspect of the program's shortcomings is that it feeds the budding anxiety that President Obama is not up to the job. At election time voters looked beyond his lack of experience, judging that his excellent campaign was evidence of strong managerial talent. That assessment has come under fire in recent weeks as his efforts to gain support for the stimulus bill have foundered and various appointments have turned out to violate tax laws or self-imposed anti-lobbyist rules. In both cases, there is a sense, as President Obama himself said, that he "screwed up."

It is disheartening to find President Obama scurrying back to his comfort zone, now that the going has got tough. He has been out campaigning -- in Indiana and Florida. He wants to use his terrific vocabulary and sincere speaking style to sell the stimulus bill to the American people. He begins to sound a little testy, a little partisan. It's difficult to make a silk purse out of a sow's ear.

Take heart, Mr. President, you will get your stimulus bill through Congress, I am sure. Whether it will have much impact remains to be seen. In my view it is much, much more important to solve the financial system crisis, and that work is far from done. You need to give Mr. Geithner some running room, and let him use his experience in the banking world to craft a program that will encourage banks to lend and that will reduce the toxic assets on their balance sheets -- quickly.

Otherwise, some may conclude that hiring a fellow who can't sort out his own taxes to manage the entire nation's financial system may have been a major oops.

Liz Peek is a writer who contributes frequently to FoxNews.com. She is a financial columnist who also writes for The Fiscal Times. For more visit LizPeek.com. Follow her on Twitter@LizPeek.