Tim Geithner’s at it again, doing somersaults, with hundreds of billions of federal money flying out of his pockets in the process, all to distract us from the more sensible course of action, which is to nationalize the insolvent banks.

Instead, he wants to scrub their assets clean by having the government and some private speculators buy up their bad bets.

Geithner calls it the Public Private Partnership Investment Program, and if he were playing scrabble, he’d be all out of Ps.

But don’t be confused. The public is taking the biggest risk, whereas the private speculators, for a tiny investment, can gain quite a lot.

Here’s the deal. Say a bank has a bad mortgage loan that it is holding for $100,000.

The government will set up an auction to determine what the mortgage really is worth.

Say the highest private bid for the mortgage is $84,000.

The government will provide $72,000 in a loan guarantee, and then the private investor would put up only $6,000, which the government would match with its own $6,000 stake.

So the government, you and I, are on the hook for $78,000 whereas the private investor has only $6,000 of skin in the game.

But get this: The private speculator gets to control the management of the asset, and not the government, even though we’re on the hook for about 93% of the risk.

“The Treasury intends to provide 50 percent of the equity capital,” Geithner’s fact sheet says, “but private managers will retain control of asset management subject to rigorous oversight from the FDIC.”

Geithner infamously said, just a few days after he became Treasury Secretary, that “we have a financial system that is run by private shareholders, managed by private institutions, and we’d like to do our best to preserve that system.”

And he is doing his best at that, which is all the worse for us.