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Lift The Bailout Fog Right Now

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A Dallas Morning News Editorial

The Tampa Tribune

Published: November 15, 2008

No financial rescue cash will be handed out behind closed doors, Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke promised Congress just a few weeks ago.

Apparently, we're supposed to forget all that.

The Treasury already has spent all but $60 billion of the first $350 billion installment that Congress provided in its $700 billion financial rescue plan, according to published reports. And the Fed has provided an additional $1 trillion from other rescue coffers. Many of these transactions didn't require congressional approval or disclosure, so Americans are basically in the dark about how troubled firms are using federal dollars.
Financial experts speculate that firms are hoarding the funds for acquisitions or perhaps using the assistance to compensate executives. If true, these are inexcusable breaches of public trust and failures of the government to follow through on its promises of transparency.

Taxpayers have a right to know how these dollars are being spent, especially as more firms line up for government help:

•American International Group, whose executives were admonished for planning a posh retreat during this crisis, received a new $150 billion government package, its third financial infusion since mid-September.

•Fannie Mae warned that it might need more federal dollars by Christmas.

•American Express is converting into a bank holding company, raising speculation that the credit card issuer will join the queue at the federal window.

•A massive federal rescue of American automakers is on the horizon.
Credit markets remain in turmoil because investors don't know enough to make clear, informed decisions about where to put financial resources. They must have assurances that federal dollars will be used fairly and wisely.

This fog of secrecy must end. Otherwise, credit will not flow, and the crisis will only worsen.

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