Banks owed no privacy when using tax dollars

Freedom New Mexico

Can you imagine lending a relative several thousand dollars and then being told it’s none of your business whether that relative spent the money doing as promised (to pay off debts and get his fiscal house in order) or whether he blew the cash on fancy vacations and jewelry?

Well, as The Associated Press reported, the banks and financial institutions that received hundreds of billions of dollars in taxpayer cash to maintain their solvency have essentially told the public it’s none of their business what they are doing with the cash. Did these financial welfare queens spend money on lavish bonuses and perks, or invest the money in other companies or sock it away in their accounts? Who knows?

“After receiving billions in aid from U.S. taxpayers, the nation’s largest banks say they can’t track exactly how they’re spending it,” AP reported, after contacting the 21 banks that received $1 billion or more in government money and asking them what they did with it.

In fact, the various bank spokespeople were rather cagey in their responses to the news agency. “We’re choosing not to disclose that,” said one. “We have not disclosed that to the public. We’re declining to,” said another.

AP reported that some of the banks said they don’t actually know what they did with the taxpayer-provided billions in recovery funds.

This is astounding, especially given that the federal government already has burned through about half of the $700 billion bailout money Congress approved. Some members of Congress are outraged at the waste, potential abuse and arrogant response of the financial sector. But what else would one expect?

President George W. Bush and his supporters in both parties told us there was no time to build sufficient accountability and oversight into the system. So in a state of hysteria, with the stock market falling, Congress wrote a giant blank check to the Treasury Department and it obliterated even the most modest accounting rules and checks and balances for the use of that money.

Transparency plays a key role in a free society. The public needs to be able to review how government officials spend money, and how those private firms who receive that money spend it also. Otherwise, there’s every chance it will be squandered.

After all, this is tax money — dollars taken by force by the government from those who earned it. Without transparency, we get foolhardy decisions and corruption.

Expect stories to emerge in the coming months and years of corporate executives who did some odd things with the cash. The president and Congress gave them money with no strings attached, so how could it play out any other way?

There’s still time for Congress to intervene and add some restrictions on the new funds, or better yet, perhaps Congress should keep the money in the Treasury and let the free market sort things out.