Them That's Got Shall Get

Rhonda Chriss Lokeman
Sat, 13 Dec 2008 21:00:00 -0800
Opinion

When you put the cart before the horse, no matter how many times you lash the beast, you won't get far. Sooner or later, you realize the direction needs to be changed, not necessarily the animal. Such is the frustration some in Congress have over Treasury Secretary Hank Paulson's questionable handling of money for the Troubled Assets Relief Program.

No matter how much lawmakers verbally flog Paulson, they can't get TARP money moved from Wall Street to Main Street. They can't get Paulson to cooperate, either.

That's because Congress approved the TARP in October without a formal plan from Paulson, without adequate oversight within Treasury, and without the means to monitor delivery of the $700 billion bailout until after the money was spent.

Incredibly, nearly half the money already has been spent, and no one — not Paulson, not an oversight panel, and not the Government Accountability Office — seems to know to whom it went or for what. We do know it mostly went to Wall Street and hardly at all to Main Street.

That was not what Paulson promised and not what Congress intended. It's certainly not what President-elect Barack Obama and the GOP's ex-presidential nominee, Sen. John McCain, expected when they agreed to a revision of Paulson's original bailout proposal.

Given the collapsing financial markets and the global ripple, something had to be done to help banks and lenders. But helping Wall Street at the expense of Main Street wasn't the deal. Yet the Paulson Treasury initially refused to dip into TARP to help strengthen other weak fundamentals of our economy, such as U.S. automakers and their blue-collar work force.

Fellow debtors, we all may be in the same soup line, but some among us are being served biscuits and gravy, and some are told to make do with stone soup. In case you capitalists are worried, that's not actually socialism. It's just the good old marketplace deciding again to trickle down from the ownership society to the working class.

After Paulson denied the Big Three, U.S. auto execs pleaded their case unsuccessfully twice before Congress. Southern Republicans preferred bankrupting U.S. automakers to losing foreign automakers and their nonunion jobs in their states.

Bankruptcy remains an option, but so does the TARP as U.S. automakers' provider of last resort. As good as that may be for the auto industry, questions remain about how the Paulson Treasury is managing TARP.

The Oversight Panel for Economic Stabilization, led by Harvard's Elizabeth Warren, joins the public in its profound ignorance about Paulson's TARP spending, including nearly half the $700 billion already spent. Paulson hasn't been the best or most transparent money manager.

Warren's four-member panel found that the Paulson Treasury administered the TARP "without seeking to monitor the use of funds provided to specific financial institutions." We aren't just talking about the major players that make Page One news, but possibly more than 170 banks TARP lists as "troubled."

As noted by the panel, understaffed and working part time, "Treasury cannot simply trust that the financial institutions will act in the desired ways; it must verify." Congress no longer can trust the Paulson Treasury; it must verify, too. It may be late, but not too late.

Like Warren's panel, the Government Accountability Office also has criticized the Paulson Treasury about TARP. The GAO found that the keeper of these billions "has yet to formalize transition planning efforts given the upcoming shift to a new administration or to establish an effective management structure and an essential system of internal controls." The GAO provided nine steps necessary "to ensure (the) integrity, accountability, and transparency" of TARP.

Of the "troubled" banks Treasury is considering under TARP, the public still doesn't know what they're getting or whether they are using this money to help consumers dig out of debt and keep their homes.

What we do know is that Main Street still is hurting, as the jobless rate continues to climb. We also know that so far, no big banks or lenders have had to go to Washington to beg under oath for a government handout. If only AIG had experienced the same congressional scrutiny as the Big Three did. What about others who seem to have free access to this easy money? Classism has become an unintended consequence of TARP, whether lawmakers want to admit it or not.

Just when we thought we were headed toward the "one America" we yearn for, TARP and congressional Republicans remind us there are at least two: the still Haves and the still Have-Nots.