Don’t let Boston and Brooklyn turn into Bangkok.

The building freeze has been a moment when some ridiculous high-water-mark projects, like a 43-story condo in suburban Raleigh, N.C., are gracefully expiring, hopefully never to be resurrected. But even Thailand’s government officials are, at this moment, pointing to their own successful recovery—after they took steps to guarantee investments and create a bad bank—as proof that the U.S. government must act quickly. “The lesson,” Thirachai Phuvanatnaranubala, Thailand’s SEC chief writes in his op-ed, “is that a comprehensive crisis resolution must address the problem at the root cause.”

Far from addressing the root cause with a fully empowered bad bank, the administration is creating a Frankenbank with government oversight but mostly private funding. They can’t even agree on what to call the thing. Treasury Secretary Geithner and Fed Chairman Bernanke use the obscuration “public-private funds,” while FDIC chief Sheila Bair calls the bank an “aggregator.” The semantic acrobatics are only serving, poorly, to obscure the fact that no one, not even Neel Kashkari, the program’s administrator, knows what will happen when the hybrid bad bank opens for business. “We do not yet know which investors will come to the partnership,” Kashkari told Congress last week. He also said Treasury “must not attempt to force banks to make loans whose risks they are not comfortable with or attempt to direct lending from Washington.”

As I pointed out in another article, some of the administration’s best proposals seem to be purposefully hidden by their press strategy. But this is one of their worst. Nothing about a bad bank is intended to “force banks to make loans.” It wasn’t exactly pulling teeth to get banks to lend money the last time around. The point should be to make banks solvent again and to simultaneously introduce new rules that limit the risk banks take on to sensible levels. And introducing unknown private partners like big mutual or pension funds into the mix is going to create a demand for return that might prove impossible.

In Thailand, Thirachai wrote that debts were renegotiated to “match the debtors' ability to pay, with conditions for them to pay more should their actual cash flow be better than forecast.” In other words, the Thais put a basic faith in their economy’s future growth and ability to recover and stopped the clock on debts. If Obama has a basic faith in our economy’s future, our bad bank should do the same, even if our financial instruments are much more complicated. They are, somewhere under the tranches, related to real homes and buildings. Why not create a New Deal-style works project to employ thousands of out-of-work investment banker Ph.D.s at an office park in Northern Virginia figuring out how to de-weaponize mortgage derivatives into inert investments that will make investors whole over time?

In the Wall Street Journal last month, economist Nouriel Roubini said that the round of mergers the Bush administration hoped would save the banking system ended up being little more than necrophilia among the zombie banks, especially in the case of Wells Fargo and Wachovia. Roubini, like President Obama, also pointed to the Swedish model of fast and temporary bank nationalization as effective. Except Obama went on to lecture that our system is too complex to entertain their successful nationalization and also to say, “[W]e have different traditions in this country.”