“Brother, can you spare a billion?” was the most frequently asked question on Capitol Hill as swarming supplicants fought over $700 billion in Troubled Asset Relief Program (TARP) funds in a scene described by The New York Times as “one of the biggest lobbying free-for-alls in memory.” But with the total federal bailout now more than $2 trillion and counting, taxpayers still don’t know who’s getting their money – or what they’re getting in return. On Sept. 14, the Federal Reserve relaxed collateral standards to the point where, as one industry insider told Chris Carey at Bailoutsleuth.org, “a dead donkey would probably qualify.”
But the Fed has since refused to release a list of the recipients of the emergency loans or the troubled securities it has so far accepted as collateral. Fed chairman Ben Bernanke previously promised Congress that the bailout would be transparent. It isn’t. On Nov. 7, Bloomberg News filed a lawsuit to force the private central bank to publicly disclose this information after the Fed failed to respond to a Freedom of Information Act request filed in May. Last week, House Minority Leader John Boehner joined a growing chorus demanding a full public accounting.
Despite his own similar assurances of transparency, Treasury Secretary Henry Paulson admitted during a congressional hearing last week that the $700 billion rescue package was not used to purchase troubled mortgage-backed securities, as originally promised, but to buy shares of banks, credit card firms, insurance companies and God knows what else. “The facts changed and the situation worsened,” Paulson told reporters, brushing off the fact that neither Congress nor the public was informed of his abrupt change of plans.
And why the secrecy? The reluctance of those who took bailout funds to be outed, fearing bad publicity that could spark a stampede, should not prevent taxpayers from being told what happened. Instead of panicked Americans stuffing cash under their mattresses, bailed-out banks are hoarding it themselves. This only makes sense if the still-unidentified bankers know something the rest of us don’t about the real cause of the financial crisis. It was supposed to be toxic sub-prime mortgages, but has somehow morphed into $33 trillion worth of “credit default swaps” – of which there are no public records. So the question remains unanswered: Did the federal government give somebody more than $700 billion of our hard-earned tax dollars – which amounts to $2,300 for every man, woman and child in America – in return for a bunch of worthless IOUs?
