The Government Accountability Office (GAO) just released its eighth report on TARP, this one a look back over the life of the program. Reading the report we’ve found the GAO once again honing in on an important issue we’ve focused on since before TARP was enacted = the need for Treasury to be more transparent with taxpayers.
One of our greatest criticisms of the government’s response to the economic crisis is the overall lack of transparency. If you remember the bailout was originally sold to the American public as a program to deal with “toxic” assets that were dragging down the economy. Yet almost immediately after passage of the bailout, Treasury modified TARP into a program to invest capital in “healthy banks” (Treasury’s words, not ours). And later it evolved into twelve different programs from helping to modify mortgages, to bailing out auto manufacturers, to further propping up banks that are “too-big-to-fail”. Yet this entire time much of the inner workings of the TARP programs are shrouded in mystery. Taxpayers don’t know why one bank qualifies for support while another does not, are not being told what most of the TARP recipients are doing with their investments, and are not being told the full details of how their money is being invested.
As we move into the second year of TARP’s existence, Treasury Secretary Geithner must decide whether the program should be extended beyond the end of this year. Whether or not TARP is extended we suggest Treasury heed GAO’s suggestion and bring their decision making process out into the open.
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