Last week, when the world was abuzz over the expletive-laden discourse Rod Blagojevich had engaged in over a vacant U.S. senate seat, a terrifying news story happened concurrently that was relegated to the sidelines, if noted at all by the news media.
I’m talking about the release of the first Congressional Oversight Panel (COP) for Economic Stabilization.
You can download the report here.
The COP report opens immediately with the acknowledgement that the four members of the panel are not necessarily working in sync. And you don’t have to get far into the report to come to that conclusion: on page two of the report, it’s clear that Representative Jeb Hensarling (R-Dallas) does not approve of this report.
In a press release filled with vagueness, Hensarling tries to explain his opposition to the report. He states his goal is “to do whatever I can to ensure that [TARP] works.” And right now, the action he is taking is to vote against the first COP report.
I read his brief press release (which you can find here.)
and have no idea what important issues he feels are being ignored. I do understand after reading his release that Hensarling’s good conscience leads him to believe that “the jury is out” on whether or not the oversight panel will be an effective vehicle for overseeing TARP.
So I begin reading the report feeling curious that a key member of the oversight panel questions the effectiveness of the panel. But I sally forth to explore the ideas and conclusions offered within the first report on Bush’s TARP for our financial industry.
As I finish the second paragraph, I realize I’m terrified. We start with the acknowledgement that “the American family is at the epicenter of this crisis” and then we launch into dire statistics that support the thesis:
– The unemployment rate is the highest it has been in 14 years
– In the last three months, 1.2 million Americans lost their jobs – and more than half a million of those losses happened in November
– One in ten mortgage holders is now in default
– Credit, when available, has become dramatically more expensive for borrowers
– The U.S. stock markets have lost more than 40 percent of their value in the last year
So how is TARP helping those of us at the epicenter of this crisis? Good question!
In fact, the report has lots of good questions – questions like “who got the money, what have they done with it, how has it helped the country, and how has it helped ordinary people?”
And questions like:
– What is the Treasury’s strategy?
– Is the strategy working?
– What have financial institutions done with the taxpayer’s money so far?
That there are no answers to the last question is one of the most terrifying aspects of the report. Apparently, “the Office of Financial Stabilization has administered the TARP program without seeking to monitor the use of funds provided to specific financial institutions.”
If this is true, we’ve handed billions of taxpayer dollars – no strings attached - to institutions that turned the U.S. housing market into the biggest crap game in the world. One can only wonder what these proven opportunists will do with this cache of free money.
In the end, the COP report offers mostly questions and very few answers. In Washington, apparently, oversight happens only after the money has been spent.