Is the Devil in the Details?

By Mark Riley




Of all President Barack Obama's cabinet picks, I was most nervous about Tim Geithner, his choice for Treasury Secretary. Not that I knew much about him, but the idea that he was an integral part of putting together the TARP (Troubled Assets Relief Program) bailout made me wonder.

Now his plan to spend the second half of the TARP money (and a whole lot more) has others wondering as well. Geithner's plan lacked much of what both lawmakers and the public had hoped for. There were few specifics about how the plan would accomplish its goals of helping banks, unfreezing the credit markets, and slow the ever spiraling rate of home foreclosures.

We do know this. It will be a week or two before the Obama Administration, and not Treasury, unveils a $50 billion dollar plan to deal with the foreclosure crisis.



That's a week or two too long. The public ought to be able to see tangible benefits from both the bailout and stimulus plans, and right now it doesn't look like they will right away.

The other obvious question is this. Is $50 billion dollars enough to help struggling homeowners when 10,000 American families a day are falling into some stage of foreclosure?

Combine Geithner's hazy vision of the bailout with reports that he resisted the effort of presidential aides to impose tough oversight on those financial institutions receiving help, and one can't be optimistic about his tenure thus far.

Some lawmakers are calling Geithner's plan "Son of Paulson", referring to the disbursement of the first half of the bailout money. We still know little about where that money went. We do know it didn't do what Hank Paulson told us it would.

Is Tim Geithner asking the American people to throw good money after bad? More importantly, is he the right person to guide the nation's troubled financial ship of state?

You tell me. I'm not optimistic.

Transparency, Anyone?

By Mark Riley

NB: From now on, this blog will be updated daily. I thought (silly me) I needed to concentrate on doing longer pieces fewer times a week. I now know better.

If there's been one single news item that should outrage hard working Americans, it's the one that says banks can't or won't tell anyone what they've done with the first chunk of the federal bailout money. We were told this was central to keeping the economy afloat. Yet nobody seems to know where the money went. As is the case with a lot that goes on inside the Beltway, there's plenty of blame to go around on this one.



Imagine for a moment you, a person working every day to make ends meet, complete the mountain of paperwork needed to actually get a loan from your financial institution. Then imagine what would happen if you couldn't (or refused) to tell the bank what you did with the money. It's called fraud if you do it, but US financial institutions seem to be getting away with just that.

You may remember last fall Treasury Secretary Hank Paulson told us the sky would fall if our financial institutions didn't get help to the tune of $700 billion dollars.



He managed to scare the Congress into giving it to him to dole out without oversight. And that's just what we've got: No oversight whatsoever. I'm not saying this. A GAO report says Treasury doesn't even know.

The banks aren't the only ones to blame here. To them, this money must seem like a windfall. Congress itself must bear some of the responsibility for this mess. They, after all, said yes to the the bailout request. Now, after the fact, they seem to be concerned. Now they want answers.

They should have demanded them before releasing the first half of the money. Now the incoming Obama Administration wants to free up the other $350 billion dollars. Unlike Bush, Obama has sense enough to demand some sort of accountability this time around. Yet even that shouldn't suffice. What about the first outlay. Are we ready to watch hundreds of billions of dollars float away without demanding answers?

Millions of Americans lost their jobs last year. Not only are homeowners facing default, renters are looking at increases they have no means to pay. It's ordinary Americans who are catching hell! "I dunno" isn't good enough when it comes to taxpayer dollars. Obama should demand a full accounting of all monies spent since last fall by the financial institutions that got help. Any hesitancy on their part should be met with the threat of criminal prosecution.

It's time to stop playing with the Masters of the Universe. They got us into this mess. They shouldn't be able to escape their responsibility to at least be transparent. Should they?