The recent financial turmoil has demonstrated to industry observers (and surprisingly, some members of Congress) that they can’t turn their heads for a moment less a few ten or hundred billion slip by into the private sector unnoticed. The Troubled Assets Relief Program (TARP) is an excellent example.
In the second most famous incident to date, Representative Barney Frank (D- MA, Chairman House Financial Services Committee) incredulously asked after learning that Treasury Secretary Paulson was less desirous of buying bad mortgages, you’re doing WHAT with the money?
Long time observers of Congress had to chuckle at the sight of a well known House infighter like Frank getting his comeuppance from a Wall Street appointee like Paulson. Apparently Congressman Frank didn’t read the last draft of TARP before it was voted on but Secretary Paulson evidently did. (Note to Representative Frank: always read the final draft when you’re dealing with investment bankers.). As the abovementioned hearings made clear, Paulson will do whatever he wants with the money.
But that’s not all. There’s another banker in town that’s making Paulson look like a piker. Ben Bernanke has spent $2,000,000,000,000 to date and and he’s refusing to tell the press what he spent the money on. Imagine that.
Chairman Bernanke has been methodically loaning money on assets pledged by financial institutions (many of which heretofore were ineligible by law for Fed loans) for months now. In short, the Federal Reserve has stated as new policy that it will loan money to a wider range of financial institutions, that it will accept as collateral a wider range of securities, but it will not tell taxpayers who is getting the money and what kind of assets are being pledged.
Will President Obama bring some transparency to this arrangement or will it be business as usual. Why are Democrats so quiet about this? Why isn’t the legacy media all over this story? A central banker spends two trillion dollars of taxpayer money and won’t say what he did with it?