SOCIAL VOX

My thoughts on the world around me

The Bailout and the Media: A Circus Coming to a Town Near You

Arianna Huffington’s latest blog post was a slap in the face. Directing her scathing remarks at the media, she wonders why reporters are so enamored by the Blago-Burris and Kennedy-Paterson-Cuomo stories, yet have put such limited effort into uncovering the colossal mystery that is the nearly trillion-dollar bailout.

I give Ms. Huffington high marks for her compelling argument. Here’s a sample on display:

“[T]he bailout is a fascinating story. Not so much a whodunit as a who’s-doing-it. This mystery is unfolding right in front of us, and the size of the victim pool could very well depend on whether we unravel the mystery in flashback or while it’s still in progress.”

Here’s a quote that blew my mind:

“As a GAO report last month dryly concluded: ‘The rapid pace of implementation and evolving nature of the program have hampered efforts to put a comprehensive system of internal control in place. Until such a system is fully developed and implemented, there is heightened risk that the interests of the government and taxpayers may not be adequately protected and that the program objectives may not be achieved in an efficient and effective manner.’ In other words, the money is flying out the door but no one is watching where it’s going.”

As Ms. Huffington points out, the bailout is a poorly-hatched plan that is spiraling wildly out of control. Worse yet, we don’t know anything about it because the government won’t tell us.

That’s where the journalists should come in. You see, the media ought to be America’s watchdog. It’s supposed to represent what Thomas L. Friedman, in The Lexus and the Olive Tree, has coined the “democratization of technology” and the “democratization of information”: innovations in computerization and telecommunications that have made it possible for hundreds of millions of people around the world to get connected and exchange information, news, knowledge, money, etc.

Now, a second news article is reporting that the soon-to-be Obama administration, and senior Democrats, are talking to the current administration about requesting the remaining rescue funds ($350 billion).

According to the article, U.S. Rep. Barney Frank, chairman of the House Financial Service Committee, will soon be proposing legislation that would overhaul the remaining funds.

Here are some important points to the overhaul:

1. Treasury must develop foreclosure relief plans for owner-occupied homes by March 15 and start committing TARP funds to it by April 1. The plans can include government guarantees for modified loans, paying down second liens and outright loan purchases to bring down payments.

2. Toughen executive compensation rules and make some of them retroactive for banks that have already received funds.

3. Give smaller banks access to TARP funds and set benchmarks for institutions to meet in expanding their lending.

Will there be greater oversight and accountability over how the second half of the bailout package is utilized?

Ms. Huffington notes in her post:

“There is an all-too-real economic drama playing out behind the drawn curtain — a mystery waiting to be unraveled. And journalistic careers to be made by those doing the unraveling. So what are the media waiting for?”

Hopefully this post helped to pull the curtain back just a little bit.

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January 10, 2009 - Posted by | Economics, Law, Politics | , , , , , , , , , , , , , , , , ,

5 Comments »

  1. Excellent article. Comes to my mind, that maybe you should be one of the “watchdogs”. You would be doing all of us a favor. Excellent.

    Comment by amc | January 10, 2009 | Reply

  2. One thing is for sure: the more things change the more they stay the same. And this could be most important maxim in politics.
    I shared Naomi Klein (http://www.rollingstone.com/politics/story/24012700/the_new_trough/3)with people I know. The only response/comment I got back was from an intelligent professional (a Physician) which I know is hard core Republican. His response? Naomi is a lefty…a liberal…
    So I have more questions that answers: was Obama correct in accuse of cynical to the people that believe that reconciliation in this country is not possible?, because I see more than one irreconcilable USA: in this case, one that does not care about the corruption and lack of accountability, as long this claim comes from the liberal side of America. Where, at one point did fiscal responsible Republicans lost their soul to the point of ignoring this bailout scam? I’m sorry Barack, there most be more than one America, and you are either naive or a liar. Like Arianna Huffington says, is happening in front of our faces, one of the biggest scams ever to be pulled to Americans, and the media prefer to talk about the egomaniac corrupted bozo Governor of Illinois.
    I thought about asking the person who responded to my email, OK, Naomi is what you say she is. Now, show me one single Republican that brings up the same stinky issue afloat. Ron Paul was one of the few politicians in warning all of us of the danger of bailing out the financial market. He not only advised on not doing it, but also suggested that leaving these institutions to the mercy of the free market was the best thing to do. Look what happen to some of them, I mean, the few that had some potentially good prognosis got acquired by other institutions at a price set by the purchasers [sure, a market value]; no taxpayer money was involved.
    Many books have been written about the obscure way the Federal Reserve was created [by the way, isn’t interesting that most people in America think that because it has the “Federal” name on it, is part of the government? How deceiving and convenient is that!]. Ron Paul advocated during his campaign in abolishing this institution as it only represents the interest of the international banking interests, not the one of the people. So I used to give a little bit of room to the fact that, all this about the Jekyll Island experiment performed by the Morgans et al in 1913, was some conspiracy theory. Now, in the times of instant information, Internet, blackberries, this scam is happening in front of our faces and nobody, nobody in the government is doing a thing to stop it. You know what? I now believe then that everything it was said about the creation of the Fed [secretly formed, no press allowed, no minutes, no transparency] has to be true.
    For the record, I also blame Democrats in Congress for allowing this to happen, for rushing in producing legislation that does not protect taxpayers. How is it possible that there was enough time to specify that workers at the car manufacturers in Michigan will not be able to strike [as a condition to receive billions of dollars for their bailout] but no single clause in the bill for the bank bailout, produced by Congress, specifies a schedule for providing loans to people and business? Look at the terms the British Government negotiated with their banks to ensure that taxpayers get their money back; or the preventions for fat executive compensations. That is why I also blame Congressman Barney Frank, Senator Harry Raid, and Congresswoman Nancy Pelosi for playing along and being part of this infective and corrupted administration. This is really sickening and has nothing to do with the many Americas we are part of it. This has to do with this bankers club members screwing the people of this country and a government doing nothing to prevent it, or how Naomi Klein describes, not the nationalization of the banking industry, but the privatization of the US Government.

    Comment by GR | January 10, 2009 | Reply

  3. Ron Paul’s wise advise on not bailing out the banking industry.

    Comment by GR | January 10, 2009 | Reply

  4. Ron Paul’s on [not] bailing out the banking industry

    Comment by GR | January 10, 2009 | Reply

  5. Written before the auto bailout, this article’s message now seems prophetic. Thank you for sharing it.

    Comment by socialvox | January 11, 2009 | Reply


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