A fight has been shaping up in congress over whether it will release the next $350 billion in TARP money, with Obama saying the money is needed to keep the economy afloat, and legislators balking at sending another $350 down the proverbial toilet of bad deals that reward incompetent banks while not doing what they're supposed to do for the economy.
Hopefully, this clash will not devolve into a false choice between doing nothing and doing something bad. Robert Reich has some good ideas.
Reich makes a strong case, for releasing the money, but with huge strings attached to make sure that the money isn't as poorly spent as the first $350 billion was.
Reich points out that one huge problem is that we don't even know where are the money went, but that our best evidence points to ineffective measures that reward incompetence, such as dividend increases, money to buyout crappier banks, and stock purchases.
Reich rightly points out that measures must be put in place to insure the lion's share of the cash is actually loaned - i.e., it is used to increase liquidity in the financial system, the way that it was actually supposed to. Otherwise, banks simply shouldn't get any money.
Reich also speaks about the need to avoid the "troubled asset" sinkhole and to make sure the cash doesn't get pocketed by bank executives.
The fact is, liquidity is critical to jumpstarting our economy. But throwing money into a black hole is worse than doing nothing. Obama's team wants the cash, naturally thinking that they'll do a better job with the next $350 billion. But Geithner's record of oversight (he was responsible for the oversight of Citibank) is not encouraging. Let's make our voices heard and make sure that this money doesn't just reward the same crooks and fools that got us into this mess.
With everything happening in the world and our nation, and with the Stimulus plan being the news du jour, it's easy to forget about that annoying TARP program. But having that $350 billion spent wisely or not at all is critical to our recovery. Make your voices heard - Progressive input has improved the stimulus package. It can do so here as well.