This is the second in a series on The Big Bailout and Treasury Secretary Geithner’s meeting with the Congressional Oversight Panel.
This meeting serves as a textbook example of why America’s founders wrote the Constitution to charter a government with a few, limited powers and functions.
Those powers did not – and still do not – include bailing out failed financial institutions. Further, this hearing demonstrates why the attempt to replace liberty with the exercise of vast government power is sure to fail.
Oversight Panel members asked Geithner several questions about TARP policies in dealing with banks and institutions. Each time his answer, phrased several different ways, was that their questions were irrelevant or unanswerable because his job was to restore “the economy as a whole,” rather than consider specific institutions.
For example, panel member Sununu asked what criteria would be used to determine if an individual bank would be permitted to repay the TARP funds it had received:
GEITHNER: They’re going to have to make that judgement.
SUNUNU: Who’s going to have to make that judgment?
GEITHNER: The relevant federal banking regulatory agency will make that judgement…
SUNUNU: We’re going to ask the regulators [government employees trained to interpret banking regulations] to make a subjective judgment about whether or not our national system of credit and lending is working?
GEITHNER: No, I didn’t mean to imply it that way. They’re going to have to make a judgment if it’s tenable or makes sense for that institution. I was just trying to underscore the fact that the basic objective, guiding what we do, is to make sure the system is working as a whole. I understand your concern. Everyone wants clarity and objectivity and because they’re working through this now, I can’t tell you today whether they’re going to meet that test [clarity and objectivity] but you’ll know that relatively soon.
Secretary Geithner finished up his answer by telling Sununu that the bureaucrats who were still trying to work these issues out – Seven months after the start of this program – were:
…careful, thoughtful, pragmatic people and they’ll get it right.
Geithner has disclosed that after seven months and nearly $700 Billion dollars have been handed out, he and the gang of government regulators still do not know what they’re doing, and still have not developed objective criteria or procedures!
Since the only assessment he considers valid is “the economy as a whole” then he is effectively unaccountable, because there is no predetermined standard “the economy as a whole” is supposed to meet. If the economy improves he will take credit, or, if it gets worse he will claim it would have been much worse without his TARP program.
We citizens and taxpayers have no option but to trust Geithner to direct all the major banks and assess the state of the whole economy. There is no competition when government runs things. You can’t take your business elsewhere.
President Obama intends to run the nation’s health care and energy sectors the same way, with government bureaucrats chaotically evolving the rules and procedures as they go along.