from TPM Cafe:
The Troubled Asset Relief ProgramBy Dana Chasin - November 25, 2008, 9:13PM
Two months after Treasury Secretary Henry Paulson expended practically every last penny of the Bush administration's political capital to pass the Troubled Asset Relief Program (TARP) and the Treasury Department itself has spent a quarter of a trillion taxpayer dollars on TARP transactions, the entire undertaking seems to have had little to no affect on the macro-economy... and has raised more questions than it has resolved.
The banking sector is buffeted weekly by reports of some venerable financial institution brought to its knees, its market capitalization all but evaporated. Hundred of billions of TARP dollars have been spent on re-capitalization, with no sustained improvement in the credit markets. Implementation of the TARP oversight process has been delayed to the point where statutory reporting deadlines are being missed. The legally-mandated public accounting of TARP transactions conflicts with private and nonprofit accounts and redactions in contract disclosures are far from a model of transparency. For better or worse, not a cent has been spent on the purchase of a troubled asset of a single bank.
All the while, trillions of dollars of national wealth have vanished in the process, devastating retirement accounts and home values. The credit crisis continues virtually unabated, undermining the ability of people to get car and student loans and even keep living in their homes -- and of businesses to make payroll and even retain workforces.
What follows is a review of some of the main problems with implementation of the TARP program in the areas of transparency, oversight, and transactional integrity - problems that threaten to impair its viability and efficacy.
Transparency: Transparency in TARP implementation has been less than ideal on a number of fronts. To date, Treasury has disbursed about $290 billion under TARP to purchase preferred stock. Since dollars are fungible, it is exceedingly difficult to determine whether a financial institution receiving a capital infusion under TARP is complying with the terms under which is has received it. And it becomes impossible, especially when those terms are not known, to determine whether a dollar spent by a bank receiving capital under TARP on employee bonuses or on dividends is in violation of the TARP. .......(more)
The complete piece is at:
http://tpmcafe.talkingpointsmemo.com/2008/11/25/the_troubled_trouble_asset_rel/