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Bloomberg Sues The Fed For More Transparency Over $2 Trillion In Emergency Loans
from the that-would-be-useful-info dept
While plenty of people are focused on the $700 billion TARP bailout/rescue plan that Congress gave the Treasury Department, that's not the only cash the government has at its disposal. In fact, the Federal Reserve has apparently handed out $2 trillion in emergency loans, with almost no transparency over who received the loans and what the collateral is or how it's valued. Bloomberg (the company, not the mayor) is now suing to have the Fed reveal that info. The government has been talking up a storm about how all of these bailout efforts would be very transparent with respect to taxpayer money -- but the reality hasn't lived up to the rhetoric.
The article linked above is from Bloomberg (the party suing the gov't), so perhaps it's biased, but it does seem noteworthy how pretty much everyone tried to dodge questions concerning the $2 trillion in loans. The only person who seemed to be willing to say anything was Rep. Barney Frank, who is the House Financial Services Committee Chairman. Yet, his explanation for the secrecy is hardly compelling:
The article linked above is from Bloomberg (the party suing the gov't), so perhaps it's biased, but it does seem noteworthy how pretty much everyone tried to dodge questions concerning the $2 trillion in loans. The only person who seemed to be willing to say anything was Rep. Barney Frank, who is the House Financial Services Committee Chairman. Yet, his explanation for the secrecy is hardly compelling:
"I talk to [New York Fed CEO Timothy] Geithner and he was pretty sure that they're OK. If the risk is that the Fed takes a little bit of a haircut, well that's regrettable.''Pretty sure they're OK? That's hardly a ringing endorsement for keeping the details of such loans a secret.
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Bridge for sale
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Since when was the Fed subject to FOI act?
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Brooklyn Bridge comments don't get to the reality of the matter
On one hand, we do want transparency in government. We do want to know that bailout money is truly needed, deserved, and not going to cronies. We want to know our government is making good decisions - and we need data to know this.
On the other hand, when a company receives emergency government assistance, this signals to the financial markets -- and in the case of banks to depositors -- that the firm is in trouble. Money bails from the ship and (to continue the metaphor) is under the bridge. We learned from last month's bailout bill that the big banks couldn't take advantage of bailout funds on a solitary basis for fear of creating a run on deposits.
The solution to the problem has to address both of these hands.
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Oh but you know
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reminds me of a joke...
i got a million of 'em....
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Re: Brooklyn Bridge comments don't get to the reality of the matter
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Problem is trust (or lack of it)
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Re: Brooklyn Bridge comments don't get to the reality of the matter
Your point is basically this...
The purpose of the loans is to assist companies who are in trouble because of a lack of public confidence. If the loans are transparent, then the public would know who was accepting the loans, thus triggering more lack of confidence. Catch-22.
That's a valid point, but I don't think if fully applies to this situation. The potential damage to the system caused by the almost certain corruption given non-transparency would outweigh any Catch-22-like ill effects.
I personaly think there is a viable range between the point where a company needs extra funds to stay alive and the point where its death is imminent because of lack of funds. Also, the fact that you need the money so badly that you're willing to brave the transparency is a good litmus test to determine if you're deserving of the government loan.
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Re: Problem is trust (or lack of it)
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2 trillion
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Hey, that's my 2 trillion dollars
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The scoop
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transparency site
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Re: transparency site
damn, i'm not special.
:-)
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