Posts Tagged ‘Treasury Department’

Why no transparency? Here’s the answer

April 6, 2009

Last month I posted about a conversation Terry Gross had with Gretchen Morgenson, a business editor for the New York Times about why the Treasury Department under Obama, in the new era of transparency, is doing the opposite, stonewalling on information about how bailout money is being used.  At that time I posed the question, why?  My first quess was because the government was afraid people would panic if they knew the truth. 

Now William Black, a regulator involved in the saving and loan situation back in the late eighties, affirms my guess in an interview with Bill Moyers.

WILLIAM K. BLACK: Absolutely, because they are scared to death. All right? They’re scared to death of a collapse. They’re afraid that if they admit the truth, that many of the large banks are insolvent. They think Americans are a bunch of cowards, and that we’ll run screaming to the exits. And we won’t rely on deposit insurance. And, by the way, you can rely on deposit insurance. And it’s foolishness. All right? Now, it may be worse than that. You can impute more cynical motives. But I think they are sincerely just panicked about, “We just can’t let the big banks fail.” That’s wrong.

Transcript

Why not transparency?

March 20, 2009

The other day I listened to Terry Gross of Fresh Air talking to Gretchen Morgenson, a business editor for the New York Times about the bailouts and how the Treasury Department has been reluctant to disclose or report on many metrics about how the money is being dispersed and how the banks are spending the money.  While Morgenson did a good job explaining how bad it is for the Treasury to stonewall, she and Terry failed to address the obvious question; why aren’t they revealing this information? 

To me, that’s the interesting question because Obama has made transparency a huge issue so you would think they would have no incentive not to disclose information.  So why are they dragging their feet?  The reason(s)  may go to the heart of what’s wrong with our financial system.  Here are some of my guesses:

*If people knew how bad the situation was, they would panic.

*The culture of “we know best” is inherent in the Treasury department no matter who is President.

*Incompetence: the Federal Government is very slow to change its ways and create new systems.

*The financial industry doesn’t want to be forced to reveal this kind of information and the government is complicit because of a similar mentality and huge campaign contributions meant to guarantee special treatment.

Feel free to come up with more of your own.

DHL pull-out creates domino effect

December 13, 2008

Wilmington Ohio braces for more job losses as ABX Air announced today layoffs of 1,900 because DHL terminates its contract with the company as of Jan.4th.   ABX operated planes and transport services for DHL in Wilmington Ohio where 1,000 of ABX jobs will be lost.

Its too late to bail out DHL and stop them from leaving the U.S. but in looking at candidates for bailouts, DHL acts as a model.  It is a company that acts as an economic hub where its failure cascades more failure through out an industry sector and such companies should be considered candidates for federal money if one of the goals of the bailout is to insure the continued basic functioning of the economy.

Listening to Elizabeth Warren who heads the Congressional bailout oversight panel on “Fresh Air” yesterday, its unclear the Treasury Department has a bailout strategy but given the likelihood of more sectors failing throughout the economy in the coming weeks and months, they had better come up with one.

Article on ABX layoffs