TARP (aka Troubled Asset Relief Program aka "the bailout") is a word that most taxpayers would rather forget. But the $700 billion financial-sector rescue has been back on the radar twice this week with news likely to make the citizen shudder: First, TARP chief Elizabeth Warren spoke out in an interview about the lack of oversight of TARP funds. Then, on Wednesday, the special inspector of TARP released a highly critical report concluding that "the anger, cynicism and distrust" surrounding the bailout "must be chalked up as one of the substantial, albeit unnecessary costs." Both reports place some of the blame on former Treasury secretary Hank Paulson (who appears to be having a bad week), for doing a poor job managing the bailout.
Bloggers are getting riled up:
- No Longer an Excuse 24/7 Wall St.'s Douglas McIntyre brushes off Barofsky's "first criticism ... that taxpayers are unlikely to ever get their investments in GM and Chrysler back." What really irks him is Barofsky's allegation "that the Treasury has been secretive about how banks that received TARP money used the capital," and that the money may be going largely to management bonuses. "The problems with the transparency of the TARP goes back to its earliest days," he admits. "It was never clear why Henry Paulson, then the head of Treasury, made a number of big banks take money that they may not have needed." But that doesn't explain the current problems:
Paulson has an excuse. The credit systems was failing as he pushed money into banks as a ham-handed way of saving the system. That need has gone away. The Treasury should not find it difficult to report on what is happening to the TARP funds now.
- What Do You Mean You Can't Track the Money? Martin Andelman demands on his blog. "[Elizabeth Warren] says the reason we won't know where our $700 billion went is because we didn't ask to be told where the money would go in advance." Andelman's not buying:
First of all, I would argue that you don't have to ask in advance where your $700 billion will be going because IT's $700 BILLION for one thing. It's implied that someone is supposed to keep track of it. For another thing... well, they're banks for heaven's sake... they keep track of money for a living. Why all of a sudden is keeping track such an onerous burden that it can't possibly be overcome.
- Add Insult to Injury Jay McDonough at Newshoggers seconds Elizabeth Warren's anger over banks handing out huge bonuses with taxpayer dollars. But this is just one problem on top of many, including employment numbers and Ben Bernanke's "cruel joke" in declaring the recession over. "It's a mystery," marvels McDonough, that "the shit hasn't yet hit the fan."
- We Live in a 'Corporatocracy,' agrees McDonough's Newshoggers compatriot Ron Beasley. Basically, he concludes, "the only thing the Bush and Obama administrations fixed was the bottom line of the large institutions that were bailed out."