Lacking clear criteria, the process lacks crucial transparency, said Ross Levine, a professor of economics at Brown University. "It seems an essential part of the U.S. approach to government that we don't trust the angelic behavior of anybody." Full Story »
Posted by Kaizar Campwala
Paul Kiel's investigation into the criteria--or lack of them--for distribution of the world's largest economic bailout is a "must read" for anyone who is paying attention. Of particular value is the link to the two-page application for funding.
“The regulators are going to use their supervisory information to assess each bank’s eligibility,” said Bill Ruberry, spokesman for the Office of Thrift Supervision, but no specific criteria will be released. A spokesman for the currency comptroller’s office also said no criteria will be made public. The FDIC and Federal Reserve referred questions to the Treasury Department. Our calls there were not returned. Lacking clear criteria, the process lacks crucial transparency, said Ross Levine, a professor of economics at Brown University. “It seems an essential part of the U.S. approach to government that we don’t trust the angelic behavior of anybody.” “The criteria should be disclosed, at least in broad terms, so that it can be discussed in the open,” said Charles Calomiris, a professor at Columbia Business School and a visiting scholar at the American Enterprise Institute. The lack of transparency also has the banking industry itself concerned. Without clear criteria, said Wayne Abernathy, executive vice president of the American Bankers Association, the banks can’t be assured that the government won’t choose arbitrarily, and “the opportunity for at least the appearance of unfairness” can arise. “Who would have thought that people would sit still while the government distributes $250 billion?”
Applicants for jobs as a department store Santas face more stringent requirements than financial institutions face for free money from the US Taxpayers, including passing a criminal background check. I’d be willing to wager at least 50 cents that it would be cheaper to simply pay off the mortgage debts, leave people in their homes, provide public work jobs, and rebuild the country on a cash economy than it will be to feed more national debt to this ‘trickle-down’ rescue of the oligarchs who manage to come out ahead no matter what.
The application to work at Goodwill Industries receiving donations requires more stringent scrutiny than the application to receive billions of unrestricted tax dollars to rescue a financial institution from its own bad judgement. "Trust us" is wholly inadequate, given that the people in charge are the very people who created the problem in the first place. I fear we are running out of capacity for increased outrage, for surely if we had any left, this story would be the lead in every news source from now until meaningful oversight is imposed. When potential applicants from the banking industry express their concern about possibilities for arbitrary decision-making, the taxpayers who are funding this scheme must pay attention, and demand transparency and accountability.