Keeping Our Eyes on the Money
March 31, 2009 7:58 PM   Subscribe

Although the government has committed almost 3 trillion dollars to rescuing the financial sector, testimony today revealed that 6 months after the start of TARP, basic oversight of the program is lacking (more here and here), including the failure to account for almost 80 billion dollars. Meanwhile, Congress wants to know more about the court-appointed AIG monitor, while Neal Wolin, who helped draft Gramm-Leach-Bliley, has replaced a former hedge fund manager to run TARP--raising more questions about who is overseeing the plans, and about how they are being administered.
posted by ornate insect (24 comments total) 4 users marked this as a favorite
including the failure to account for almost 80 billion dollars

That's not what that article says.
posted by smackfu at 8:04 PM on March 31, 2009

That's not what that article says.

You're right; I should have written "an explanation for overpayment of 80 billion." That's more accurate than "failure to account for." My apologies.
posted by ornate insect at 8:07 PM on March 31, 2009

I always trust outraged Republican legislators like Sen. Charles Grassley to get to the bottom of financial chicanery for me. Especially right around the time congress is discussing whether or not to give a certain treasury secretary sweeping new regulatory powers that a lot of people on Wall Street aren't too happy about.
posted by saulgoodman at 8:11 PM on March 31, 2009 [1 favorite]

saulgoodman--Baucus, a Democrat, also chaired the TARP oversight hearing today. Is there some reason not to trust the testimony of Barofsky, Warren, and Dodaro?
posted by ornate insect at 8:14 PM on March 31, 2009

Congress really needs a "cooling-off period" before legislating in what appear to be emergency situations.
posted by wobh at 8:29 PM on March 31, 2009

no, i didn't mean to be snarky. i'm just getting tired of all the hate on geithner, especially since fostering the wrong impressions about the guy is exactly what the worst offenders on wall street are hoping to do right now, because they're in the middle of a campaign to bring him down. now, i'm not a big fan of summers, and i know geithner came up among that crowd, but by most accounts, he's not a true insider. and of all the people qualified enough for the job, he's one of the least connected to the actual wall street insiders, having never worked in the private sector on wall street. that's part of why so many on the right have been gunning for him. his recent request for expanded authority to seize large non-banking financial institutions like AIG and to tighten regulations on hedge funds and the derivatives markets are a big part of it, too. but all that's not really on topic here, so i'm sorry for the derail.
posted by saulgoodman at 8:37 PM on March 31, 2009 [2 favorites]

saulgoodman: I don't mind the derail, since I am in fact curious if a hearing like the one held today by Senate Finance about TARP-oversight is possibly just being orchestrated for a "death by a thousand cuts and make the BHO administration look bad" strategy. At the same time I'm legitimately concerned about whose guarding the henhouse, and where all the money's going. So I'm open to what it all means.
posted by ornate insect at 8:42 PM on March 31, 2009

God, I really hope it's not, and that I'm just being defensive. We really do need better oversight of the TARP funding, but the spin of some of the press coverage (like the short Washington Independent bit) seems suspiciously off the mark.

Last I heard, Geithner still hasn't even been able to get fully-staffed at the Treasury (in fact, isn't he still the only treasury appointment that's gotten through the process due to Republican obstructionist tactics?), so it seems to me that he's being deliberately hamstrung and then portrayed in an unfairly bad light by Republicans in congress and some within the press. He's under-staffed and under fire, so it's no wonder he hasn't been able to get a good handle on all the problems with TARP. He's practically on his own.

And hearing House Minority leader John Boehner's the other day sputtering about how Geithner's proposal to increase regulators' authority to assume control in the case of failures at large non-banking institutions represents "an unprecedented grab of power" has got me a little on edge.
posted by saulgoodman at 9:37 PM on March 31, 2009

Uh, when are the guillotines going to be brought out?

Maybe that's too... Frenchy - axes are pretty common, why not solicit volunteer axemen if something Frenchified is looked down upon?
posted by porpoise at 9:57 PM on March 31, 2009

I just came in to say:

I have a new house, safe job, no debt, no credit cards, live in a city with very workable public transit, have my money in a growing currency, pay for everything in cash or debit card, and own no stocks, commodities, futures, bonds, or anything even remotely like it. My family owns, you guessed it, real estate, that's been paid for with cash, that we rent out. I'm involved in local politics and make a difference here, where it counts for me.

I know this isn't very polite or appropriate or helpful but sometimes I don't care if the rest of the world burns down. Bush didn't save the world; I knew he wouldn't. Obama doesn't seem to be doing much either. So today, folks, today, I'm taking a break from my regularly scheduled outrage and astonishment, and I'm going to go downstairs, buy me a big ol' bottle of booze, buy a couple packs of cigarettes, put on Busta, fire up my new video game, and not think about this mess. Because if the world does burn down today, well, I'll still have had a good day.

I'll be back tomorrow and post some flabbergasted regale of the myriad faces of human stupidity and evil. Today, I'm on vacation.
posted by saysthis at 12:47 AM on April 1, 2009 [2 favorites]

Just to rain on your parade, saysthis: The bailouts and stimulus are going to lead to some nasty inflation in the coming years. Having hard cash and assets is bad during inflation. Rents on an individual house probably won't be able to rise fast enough to keep up. The government is doing all that it can to ensure that your incentives are to increase your debt level.
posted by FuManchu at 2:10 AM on April 1, 2009 me a big ol' bottle of booze, buy a couple packs of cigarettes, put on Busta, fire up my new video game, and not think about this mess. Because if the world does burn down today, well, I'll still have had a good day.

Hey, I'm with you up 'til here, saysthis. You got it so good, why not take care of your health so you can enjoy the many advantages in your life for as long as possible? Money can't protect you from alcoholism or lung cancer. Instead of going downstairs and buying a bottle of booze and cigarettes, why not pick up a healthy snack and go for nice walk? Instead of putting on Busta, why not listen to something pleasant and life-affirming? You've got the right attitude about the "crisis". Now it's time to get the rest of your lifestyle in line.
posted by Faze at 4:29 AM on April 1, 2009

Having hard cash and assets is bad during inflation.

OTOH, if people are talking about "assets" like a house with a mortgage, that's good when there's inflation.
posted by smackfu at 5:30 AM on April 1, 2009

Instead of putting on Busta, why not listen to something pleasant and life-affirming?

Hey, now.
See? He take some bitches. That's pretty affirming. I mean, not to the bitches, but for Busta it's looking pretty good.
posted by Civil_Disobedient at 5:31 AM on April 1, 2009 [1 favorite]

Isn't Gramm-Leach-Bliley the law that deregulated some of the naked derivatives trading by writing into law that a whole array of securities transactions could not be regulated as gambling? Didn't the law do this even though the entire point of some of these new categories of securities was to profit from moral hazard, to bet against companies and homeowners paying their loans on time? What was Wolin's role in Gramm-Leach-Bliley? If he was just a technocrat, a legislative draftsman, then I can maybe see a case for appointing him. But if he believed that Gramm-Leach-Bliley was a good idea, and he still hasn't fundamentally revised his views, then he would be an obstacle to reform and a complete disaster as an appointee.
posted by jonp72 at 6:33 AM on April 1, 2009

Yeah, I watched some of this yesterday, it was sadly comical.

Senator: This is bad, what do we need to do fix this?

Oversight committee: It is bad. We should have power to audit the companies and demand accounting of where the money went, but we don't do.

Senator: Oh that's ridiculous, what the hell happened?

Oversight committee: Treasury didn't give us the the power.

Senator: This is bad, what do we need to fix that?

Oversight committee: How about telling making Treasury give us the power.

Senator: Oh. Well, if you could get us a list of what powers you need we'll get on it.

Oversight committee: Ok, here's what we need.

Senator: Oh ok. Man, this is a bad situation, what can we do to fix it?

Rinse, repeat...
posted by Brandon Blatcher at 6:42 AM on April 1, 2009

as Treasury’s general counsel at the time, Wolin “provided the technical and legal drafting”

The above line from the piece on Wolin to my mind strongly suggests that he was more of a technocrat, as jonp72 suggests, not a driver or ideological champion of the legislation. If his position was general counsel for the treasury, then I'm pretty sure you could say he "provided the technical and legal drafting" for every piece of legislation submitted to the treasury for legislative review. But that's just my take.

It's notable that the Republicans would love to be able to undermine yet another Obama apointee. I honestly don't think that (with a couple of exceptions) the Republicans really care one way or the other about the qualifications or merits of any of Obama's appointees, either. So they're willing to distort the record by making claims that are painted in broad brushstrokes, and the press doesn't do accuracy and nuance well enough to filter out the spin. The Republicans only goal right now as the minority party is to obstruct, obstruct, obstruct, to lay the groundwork for their forthcoming "See how ineffective Obama is? He hasn't even managed to get his cabinet in place!" ad campaign.

That said, we need to know where Wolin falls on the issue now. That's the real question. Glass-Steagel needs to be be put back into full-force, and that's that. Does Wolin agree, or doesn't he? That's the question.
posted by saulgoodman at 7:09 AM on April 1, 2009

Krugman vs. Roubini: Splitting bears.
posted by homunculus at 10:09 AM on April 1, 2009

I think we all need to play in our rooms while the rich white adult men talk.
posted by Legomancer at 11:11 AM on April 1, 2009

i wish i were rich. sort of. (but it's okay. got a tv in my room at least.)
posted by saulgoodman at 1:56 PM on April 1, 2009

As president of Harvard, Summers fired Analyst with the Endowment for warning about Risky derivatives trades. Subsequently, they lost $11 billion in the current crisis.
posted by delmoi at 2:32 PM on April 1, 2009

Joseph Stiglitz: Obama’s Ersatz Capitalism
posted by homunculus at 3:36 PM on April 1, 2009

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