Now that the truth is beginning to dribble out about the Troubled Asset Relief Program — the Government Accountability Office’s eagle-eyed auditors said they found no evidence that it prevented a financial meltdown a year ago — this $700 billion monument to political posturing should be shut down. This can be done in three easy steps: First, federal financial regulators should be called before Congress to explain why they did nothing before 2008 to stop the proliferation of toxic mortgage-backed securities; second, all outstanding TARP funds given to corporations should be returned with interest by a certain date; and third and most important, government-owned shares in companies that received TARP funds should be sold.
Are the two men in Congress most responsible for overseeing TARP ready to clean up the mess? There is no way of knowing because they won’t say. The Examiner got no response from spokesmen for either Senate Banking Committee Chairman Chris Dodd, D-Conn., or House Financial Services Chairman Barney Frank, D-Mass. We asked if they have read the damning GAO report and if they plan to do anything in response to its central finding.
Their silence comes as no surprise, since Dodd and Frank voted for TARP and were members of the bipartisan congressional chorus that joined President George W. Bush and Treasury Secretary Henry Paulson last year in warning of economic collapse if the program wasn’t approved. Now, when GAO issues a report that says it could find no evidence that TARP made one iota of difference to the ultimate outcome of the economic crisis of 2008, Dodd and Frank don’t seem interested in talking about it.
Senator Richard Shelby, R-Ala. — who voted against TARP — pointed out during a Banking Committee hearing in September that TARP morphed from a targeted program designed solely to purchase toxic assets and unfreeze credit markets to a free-for-all bailout of auto companies, delinquent homeowners, and practically anybody else with an itchy palm. Meanwhile, hardworking taxpayers who are stuck with the bill watch in disbelief as the value of their homes and dollars dribbles away and foreclosures mount to record levels.
Those who, like Shelby, opposed TARP have been vindicated. During the September hearing, Special Inspector General Neil Barofsky blamed a continuing lack of transparency and accountability for the public’s “anger, cynicism and distrust” of federal bailouts. Taxpayers should be infuriated by this colossal waste of their hard-earned money and the failure of Dodd and Frank to get to the bottom of why it happened.