If you had faith in the American government’s ability to repay you for your contribution to TARP, I have a suggestion for you: refuse to be delusional. “Faith is belief in spite of, even perhaps because of, the lack of evidence,” says Richard Dawkins. I’d say that when it comes to our money and politics, faith in government has proven to be quite a gamble.
We know this because the Congressional Oversight Panel that oversees TARP (the Troubled Asset Relief Program) has released a 143-page report that warns that it is “highly unlikely” that taxpayers will see a return on all of the $81 billion loaned to the automobile industry. Not only that, but the Detroit News reports that the panel urges the Obama administration to find a quick exit plan so that GM and Chrysler can go into an independent trust rather than remain in government hands.
Billions of reasons to wonder if anyone’s driving the car
The panel predicts that Chrysler will repay less than $10 billion of its $15 billion in government loans and GM won’t be able to make good on at least $20 billion of the money it received in taxpayer loans. Considering that there’s still a great deal of grumbling about conflicts of interest as long as the government pulls the strings for the beleaguered automakers, the America people want action. They want to know that the big government machine isn’t going to funnel their money into GM and Chrysler ad infinitum and fail to divest themselves of a bureaucratic mess.
“Clearly articulate the duration of (your) investment.” That’s what the Treasury is being advised to do by the panel. That would include quarterly financial reports that every other public company is required to file with the SEC (this hasn’t happened since the government got involved). It also includes making public what senior executives are being paid relative to the performance of their companies. It has been reported that both companies have submitted this info to the Treasury for approval. If the Treasury does embrace transparency, the American people will continue to hold suspicion that their elected officials are not working toward the best interests of their constituencies. Ideally in a democracy, this would affect whether the people vote such politicians back into office.
GM has cake, eats it too
While they are promising that they’ll repay American taxpayers, GM has refused to reveal how much bailout money is sitting in escrow, how often it accesses those fund and how much they’ve already used. Yet according to GM spokesman Greg Martin, “GM respects the TARP Oversight Panel’s important work.” If that’s true, where’s the transparency? You’ve failed to be accountable for your business management practices in the past, and now you’re relying heavily upon the taxpayers’ money. Now’s the time to open the books, GM. If you fail to live up to the expectations of the Treasury (let alone the American people), everyone needs to know. There needs to be an unavoidable system of accountability.
The White House and Chrysler have no comment on this to date
What did I say about faith in American politics when your money is involved? Make sure there’s evidence that it will be used well – that’s a sound, scientific method.
The Congressional Oversight Panel voted 2-1 to approve the report. The dissenting member – Republican Rep. Jeb Hensarling of Texas – wants TARP’s leadership to step in and investigate whether any of the $700 billion TARP plan should have gone to GM or Chrysler. Considering the evidence, I’ll have to say don’t mess with Texas. They may want to secede from the Union, but I think they’ve been able to call a spade a spade here. The American people are giving billions they’ll never see again. If the automakers and Treasury refuse to pull back the curtain, they should expect people to assume the worst. With no driver at the wheel, it may be only a matter of time before this jalopy careens off a cliff once more.
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