Where's that TARP oversight?

As we're all only too well aware, the $700 billion financial services industry bailout plan was sold to us with a thick layer of Steak Sauce regarding the unprecedented levels of oversight that would be in place to protect this massive "investment" in our American financial system the worldwide economic infrastructure.

The bill built in three new layers of overlapping oversight authority -- plus the already existing Government Accountability Office (GAO), which says it's ready to report as required -- apparently to guarantee us some foolproof oversight mechanisms. A welcome development, given that just about everything the Bush-Cheney "administration" has touched over the past eight years has ended up in the crapper, and apparently has done so to nearly universal surprise, no one ever having been "able to foresee" it happening. A lack of oversight, it seems, has been at the root of everything that's gone wrong. But that's nobody's fault in particular, because we need to look ahead to the future, and not play "The Blame Game."

So how're we doin'?

Layer one: the Special Inspector General to oversee the bailout plan, as personally promised on the Senate floor by Max Baucus (D-MT):

For the taxpayers' sake, I also wrote a provision creating a special watchdog to track and protect taxpayers' dollars. I have said that American resources must be used wisely and efficiently. This bill includes my proposal to create an independent Inspector General to oversee this effort. This effort and nothing else. Solely designed [sic] on this problem. I designed the office of this Inspector General to be truly independent, with the necessary resources to fight for every taxpayer dollar. I designed this Inspector General to be accountable only to the Congress and to the American taxpayer. It will be my personal ambition to make sure that this watchdog does his or her job. I want this Inspector General on the ground, in New York, inside the firms that facilitate Treasury auctions, watching every dollar that comes and goes. This investigator will hear from the Finance Committee as we work to protect the American people's interest in this effort.

Status: Not happening.

Layer two: the "Congressional Oversight Panel" -- a five-member board appointed by Congressional leadership and charged with monitoring Treasury Secretary Henry Paulson's use of the sweeping authority granted to him as part of the package.

Status: missed deadline on first "mandatory" report; one of the five members, Sen. Judd Gregg (R-NH), has already quit.

Layer three: the "Financial Stability Oversight Board," yet another five-member panel, this one consisting of Secretary Paulson, Fed Chairman Ben Bernanke, SEC Chair Chris Cox, Federal Housing Finance Agency Director James Lockhart and HUD Secretary Steve Preston.

Status: WaPo sums it up this way:

[I]t has no staff of its own, and few expect that policymakers can conduct oversight of themselves. "It's sort of a joke in terms of oversight," a congressional aide said.

So is it any wonder that today's NYT header reads like this?

Bailout Monitor Sees Lack of a Coherent Plan

The good news here is that the chair of the remaining 80% of the Congressional Oversight Panel does correctly see that there's no coherent plan.

I don't think anybody needed three semi-to-non-functional oversight authorities to tell us that, but I can take some comfort in it. Less so in the fact that there are three semi-to-non-functional oversight authorities.

There may be little doubt that at least some of the three oversight authorities will one day be fully functional, and that's great. But it's not really the point, which was that this emergency measure was being sold to us on the strength of the guarantees of the legislators who passed it that there would be robust -- indeed, unprecedented -- oversight, and it was pretty clearly insinuated that this was to considered virtually a precondition to approval of the program. More realistic observers probably knew as it was happening that the Congress wouldn't be able to deliver on the oversight promises nearly as quickly as it was moving to deliver on the funding. But that never entered into the Beltway conversation, did it?

Now, here we are sixty days from enactment, at the point where "virtually all of the first $350 billion tranche is spent", and not a single one of the promised three new oversight authorities fully functional.

With the auto industry bailout now also on the horizon, you have some idea of how big a grain of salt you'll need to have on hand if Congress starts promising you it'll all be OK on account of all the oversight they're building into the program.