Where Has All the Money Gone?

The Congress is currently debating whether it should give the Federal Reserve and the Treasury Department 350 billion more dollars.

Most Americans are scratching their heads and wondering what happened to the first $350 billion. And that is the essential problem with this whole program.

Bernie Madoff (who still has not spent any quality time in jail) scammed so-called smart people around the globe out of $50 billion. Many folks out in the rest of the country are wondering if this is TARP II or Madoff II.

It hasn’t helped that the banks have refused to disclose what they did with the money. And as they refused to disclose, they have continued to foreclose. And as they continue to foreclose, they continue to pull credit for formerly creditworthy clients.

The banks don’t trust the people. And the people don’t trust the banks. The Congress doesn’t trust the Fed or the Treasury. But neither the Treasury nor the Fed really trusts the Congress. The people certainly don’t trust the Congress or the Fed, and of course, the Congress doesn’t seem to really trust the people.

What we have here is a breakdown in trust, in other words. And without trust, you really can’t have a functioning market economy or a functioning democracy.

One of the best ways to re-establish trust is to bring full transparency and full disclosure to the process. It should start by the Treasury telling the American people where the first $350 billion has gone. And it is not sufficient to tell them in broad terms. The American people deserve specifics.

They want to know how much of the money has gone to pay off the Chinese. They want to be certain that their money has not been funneled to a small group of latter-day oligarchs.

The people feel that they are being jobbed by insiders. Insider trading is illegal and has been prosecuted in the past (see: Martha Stewart). But what if the insider-traders have moved on to TARP as their next victim?

I like Treasury Secretary Hank Paulson and I think he is an honorable man. But that doesn’t mean we don’t need full transparency on this money. Trust but verify is what I say.

Unless we know where the money has gone, we won’t have trust. And until we have trust, we won’t be able to rebuild our economy.

Message to Congress: Where has all the money gone?


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