You Promised Transparency

14 November 2008



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Boehner Demands Fed ID Loan Recipients

House Republican Leader John Boehner of Ohio has issued a prepared statement demanding that the Federal Reserve disclose just who got how much of the almost $2 trillion in emergency loans. Mr. Boehner is quite a ways to the right, and this journal finds much of his political platform too reactionary for polite dinner conversation. In this matter, however, he is as close to perfect in his views as is humanly possible.

Mr. Boehner is growing concerned that the government's actions in fixing America's broken financial system are experiencing mission-creep, moving into areas Congress never intended the Treasury and the Fed to get into when it passed the the $700 billion bailout bill. In fact, conservatives warned that this could happen, and it was promises of transparency and openness that got a few of them to go along. Liberals, for their part, always insisted that the bailout had to be properly regulated, or Wall Street would just throw it away. Right met Left headed the same direction.

Congressman Boehner said, “During the bipartisan negotiations between Congress and the administration, members of both parties made clear that Congress must have meaningful oversight over the use of taxpayer dollars. Transparency is even more important now, given that the program appears to have been implemented in some ways that were given little to no discussion as Congress was being urged to pass the rescue plan.”

In the Senate, Republican John Cornyn of Texas echoed his sentiments, “There cannot be accountability in government and in our financial institutions without transparency. Many of the financial problems we are facing today are the direct result of too much secrecy and too little accountability.''

The argument against revealing who got what loans rests on the correct assumption that those who would be named would have their financial soundness come into question – do they need to borrow more, and if so, will they get it? Were that to happen, they might face further trouble with investors pulling out their money and counter-parties walking away from deals for fear that the deal would collapse at the other end. This probably would happen.

So, the choice is an unpleasant one. Either a few more institutions face even greater difficulties and run the risk of failure, or the US taxpayers take the government and the financial community at their word that everything is just fine. One has heard that before, and the feeling one gets at hearing it again makes one most uncomfortable. Transparency is a virtue.

© Copyright 2008 by The Kensington Review, Jeff Myhre, PhD, Editor. No part of this publication may be reproduced without written consent. Produced using Fedora Linux.

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