CNN

Summers appeared on CNN's The Situation Room Monday.

(CNN) – President Obama's chief economic adviser Monday beat back recent criticism from liberal economist Paul Krugman over the administration's latest bank rescue plan, telling CNN Krugman was too quick to pass judgment.

"Paul's a great economic theorist and I wish he'd waited until the plan had been announced and the steps had been described before he had written his column," said Larry Summers, the director of the White House's National Economic Council.

Writing in the New York Times Monday, Krugman said the latest plan unveiled by the Treasury "fills me with a sense of despair" and "assumes that banks are fundamentally sound and that bankers know what they’re doing."

The plan, fully unveiled Monday morning, proposes taxpayer funds to seed partnerships with private investors that will buy up toxic assets backed by mortgages and other loans. The goal is to buy up at least $500 billion of existing assets and loans, such as subprime mortgages that are now in danger of default.

Speaking on The Situation Room, Summers defended the plan, saying it is not designed to be a cure all for the banking system.

"What Mr. Krugman did today surprisingly was he took an action in one area - strengthening the capital markets - and he said it didn't solve another problem - the issues in the banking system. He's right about that. But it wasn't intended to," Summers said.