A congressionally appointed oversight committee lambasts the Treasury’s handling of the $750 billion TARP in a report coming out today. And not just because it’s still called the Troubled Asset Relief Program despite the fact that they haven’t actually bought troubled assets.
The report faults Treasury on a variety of fronts: having no ability to ensure banks lend the money they have received from the government; having no standards for measuring the success of the program; and for ignoring or offering incomplete answers to panel questions.
Wow. Way harsh, Tai. Not that they don’t deserve it.
“So long as investors and consumers are uncertain about how taxpayer funds are being used, they question both the health and the sound management of all financial institutions,” the panel, which is headed by Elizabeth Warren, a law professor at Harvard University, wrote. Not to mention the sound management of the Treasury .
Speaking of: Nobel Prize–winning economist Joseph Stiglitz has a few things to say about Hank Paulson’s buying of preferred shares of Goldman Sachs at a rate that was good for the bank but crummy for taxpayers. “Paulson said he had to make it attractive to banks, which is code for ‘I’m going to give money away,’” he told Bloomberg. “The worst aspect of this is that they were designed not to do what they were supposed to do. In many ways, it’s not only a giveaway, but a giveaway that was designed not to work.”
Barney Frank has already reacted, and is drafting a new bill that will impose tighter control on the Treasury’s use of the money: “A certain minimum amount is going to have to go for foreclosure relief,” he said, on his way to a meeting with House Democrats and Obama aides.
Treasury Must Divulge Details on Bailout, Panel Says [WP]
Paulson Bailout Didn’t Give Taxpayers What Goldman Gave Buffett [Bloomberg]
U.S. TARP bill to help auto dealers, real estate [Reuters]
Panel Steps Up Criticism of Treasury Over TARP [WSJ]