On another blog I responded to a challenge to describe an alternative to the approach Obama has chosen with Larry Summers and William Geithner. What I said there (with a little modification and expansion) is worth repeating here:

1. (After firing Summers and Geithner,) I would appoint Kansas City Fed Chief Tom Hoenig, who said that the "too big to fail" doctrine was a failure, as Chief Economic Advisor; and UMB President William Koenig, whose bank was well managed, avoided toxic debt instruments, and turned down Tarp money, as Secretary of the Treasury.

2. I would charge them to implement an FDIC/RTC style receivership plan immediately, to rid the banking system of toxic assets.