When given access to $700 billion to bail out the banking system, Fed Chairman Ben Bernanke and Treasury Secretary Henry Paulson promised Congress transparency. Now we're in a position in which Bloomberg News has been forced to request details under the Freedom of Information Act. Indeed, it has also filed a suit to force disclosure. Further, according to The Wall Street Journal, "Treasury is unlikely to conduct any auctions to purchase bad loans and other troubled assets -- the original intention of the $700 billion rescue plan."
Let's put this in marketing terms. The government has pulled a bait-and-switch on the American taxpayer -- the consumer in this case. Consumers coughed up $700 billion. In exchange, economic crisis would be averted and taxpayers would be told every step of the way where that money was going.
As far as the average consumer knows at this point, the economy is still in crisis, AIG is still holding corporate retreats, and Bernanke and Paulson are handing out sacks of money to their friends and families.
The government's effort to take equity stakes in banks could prove more effective than the original scheme of buying banks' bad debt. But taxpayers deserve to know what's going on.
If a company tried this sort of thing, there would be hell to pay. But the message to companies involved with this mess seems to be: "Throw your lot in with the government, and we'll cover for you. What's the consumer going to do? Demand a refund? Sue us?"
With such huge payouts and minimal responsibility, who can blame the auto industry and others for lining up at the government trough? Maybe the publishing industry will be next in line.
Taxpayers deserve more for their hard-earned money. Perhaps Nancy Pelosi, Harry Reid and President George W. Bush don't care because they figure their record-breaking approval ratings can't get any lower. And the few House Republicans trying to hold their feet to the fire seem like sore losers after the recent electoral thumping.
What the taxpayer needs is a consumer advocate. Mr. Obama, it looks like the job has fallen to you. We wrote a bit last week about rebuilding Brand America. Rebuilding starts at home.