A letter to the editor last week suggested that Obama is now experiencing his “Katrina Moment.” Frank Rich seems to dismiss this but admits that Obama needs to follow-through on his promise of transparency:
To get ahead of the anger, Obama must do what he has repeatedly promised but not always done: make everything about his economic policies transparent and hold every player accountable. His administration must start actually answering the questions that officials like Geithner and Summers routinely duck.
Inquiring Americans have the right to know why it took six months for us to learn (some of) what A.I.G. did with our money. We need to understand why some of that money was used to bail out foreign banks. And why Goldman, which declared that its potential losses with A.I.G. were “immaterial,” nonetheless got the largest-known A.I.G. handout of taxpayers’ cash ($12.9 billion) while also receiving a TARP bailout. We need to be told why retention bonuses went to some 50 bankers who not only were in the toxic A.I.G. unit but who left despite the “retention” jackpots. We must be told why taxpayers have so little control of the bailed-out financial institutions that we now own some or most of. And where are the M.R.I.’s from those “stress tests” the Treasury Department is giving those banks?
Another compelling question connects all of the above: why has there been so little transparency and so much evasiveness so far? The answer, I fear, is that too many of the administration’s officials are too marinated in the insiders’ culture to police it, reform it or own up to their own past complicity with it.
The “dirty little secret,” Obama told Leno on Thursday, is that “most of the stuff that got us into trouble was perfectly legal.” An even dirtier secret is that a prime mover in keeping that stuff legal was Summers, who helped torpedo the regulation of derivatives while in the Clinton administration. His mentor Robert Rubin, no less, wrote in his 2003 memoir that Summers underestimated how the risk of derivatives might multiply “under extraordinary circumstances.”
CNN’s Campbell Brown also weighed-in on the yet-to-materialize transparency. She cited the testimony of Earl Devaney, Obama’s hand-picked chair of the Recovery Accountability and Transparency (yes, RAT) board. Devaney said that Recovery.gov is currently getting 4,000 hits a second but that they don’t even have control of the website yet. Devaney:
The board is still trying to acquire staff, get our equipment … phones, computers … trying to acquire space, which we haven’t managed to get yet and just trying to get our heads above water and make sure the board fulfills its responsibilities under the Recovery Act. Our first official board meeting will actually be held next week.
Tell me you oversee a budget of $787 billion dollars but that you don’t have a computer or an office yet to oversee that $787 billion dollars and I’ll say, “You must work for the Federal government.”
Devaney also warned against unreasonable expectations:
I’m concerned that there may be a naïve impression that given the amount of transparency and accountability called for in this act, little or no fraud or waste will occur. I’m afraid that my 38 years of federal enforcement experience informs me that some level of waste or fraud is, regrettably, inevitable.
Campbell Brown notes:
Devaney told The Wall Street Journal that on average, fraud in business adds up to about 7 percent. Apply that to the $787 billion Recovery Act and that’s a jaw-dropping $55 billion in waste and fraud — $55 billion! Kind of makes those AIG bonuses pale in comparison.
I think I need a hope infusion.