The FDIC announced today that it would be scrapping (ok, "shelving") its participation in the PPIP aspect of Geithner's financial sector recovery plan. That constitutes the majority of Geithner's March plan. Canceled.

Regulators shelved a controversial plan that aimed to cleanse banks' balance sheets of toxic assets...

The loan program was unveiled in March as part of the Obama administration's effort to restore investor confidence in the financial system. At the time, officials said removing bad assets from banks was the key to restarting the financial markets and putting the economy on track to recover.

But since then, policymakers led by Treasury Secretary Tim Geithner and FDIC chairman Sheila Bair have put the nation's 19 largest banks through stress tests. The tests came in generally better than observers had expected, and big institutions have been able to raise some $85 billion in investor funds.

Please understand that I'm not complaining. This is a good development. In fact it would seem that this means that the Obama administration has effectively done nothing to address the "crisis" in the financial sector and, apparently, nothing needed to be done.

Doing nothing goes beyond what most conservatives--myself included--were suggesting.

In fact, in his first press conference he ridiculed those that "who just believe that we should do nothing" (something no-one was suggesting) but now he has done exactly that. Of course he was talking about "doing nothing" in terms of stimulus spending, not the banks.

But one has to wonder: If the private financial sector--the supposed source of all our problems--was able to recover without the assistance of the government, isn't it possible the larger economy could also recover without a $787 billion stimulus package?