BailoutWatch.net continues to track the latest news, events, federal reports, and other useful resources related to the federal bailout. This entry, our fourth "Project Update," highlights some of the work of our Bailout Watch project partners. While the majority of the work reported in the Update is posted on this site as it is released to the public, the "Project Update" makes it easy to keep up with what organizations are doing to research, investigate, and analyze the federal government's actions during the bailout. "Project Updates" are posted once every two months.
BailoutWatch.net is maintained by OpenTheGovernment.org.
Economic Policy Institute (EPI)
EPI has hosted several events on bailout-related issues as part of its Bailout Analysis Project.
- The first forum, titled “Comommunity Banks in the Bailout” explored the bailout’s impact on the nation’s 8,000 community banks. Notable speakers included Christopher Whalen, managing director of Institutional Risk Analytics. Also, Karen Thomas, executive vice-president for governmental affairs for the ICBA as well as William Dunkelberg, professor of economics and co-founder of New Jersey’s Liberty Bell Bank. (See the video here).
- During the second forum, “The Federal Reserve’s Exploding Balance Sheet” panelists examined the Federal Reserve, its history of secrecy, and its expanded role in the financial crisis. With an opening keynote speech by Senator Bernie Sanders, the diverse panel of speakers included former Fed economist Jon Faust, director of National People’s Action, George Goehl, veteran journalist who wrote the classic 1987 book on the Federal Reserve, Secrets of the Temple, William Greider, and CEPRS’s Co-Director, Dean Baker.
- The third forum “What to Do About Too Big to Fail,” featured panel speaker Simon Johnson, MIT Sloan professor and creator of the popular blog, The Baseline Scenario. Other notable speakers included AFL-CIO Associate Counsel member of the Congressional Oversight Panel, Damon Silvers, Federal Reserve Bank of Minneapolis consultant, John H. Boyd, and President of the American Antitrust Institute, Albert A. Foer. (See panel highlights here).
- EPI also co-hosted an event with Demos, The American Prospect, and Americans for Financial Reform. Demos Senior Fellow and former Goldman Sachs Managing Director, Nomi Prins, was invited to discuss her new book, It Takes a Pillage: Behind the Bailouts, Bonuses, and Backroom Deals from Washington to Wall Street. EPI’s Research and Policy Director, John Irons, led a discussion about financial responsibility with President of Public Citizen, Robert Weissman, and Executive Director of Americans for Financial Reform, Heather Booth. (Additional event information here).
Dates and details about future Bailout Analysis Project forums will be posted on the BailoutWatch.net Calendar as they are announced.
Center for Economic Policy Research (CEPR)
In October and November, CEPR continued to raise awareness of the problems that led to the bailout and the implementation of it, as well as how to avoid future bailouts. Some highlights include:
On November 19th, CEPR co-director Dean Baker testified on "The Failures of TARP" at a Congressional Oversight Panel for the TARP hearing, "Taking Stock: Independent Views on TARP's Effectiveness." Key lines from his written testimony are:
The failure to address this [home foreclosures] issue – when it would have been very easy to set conditions on banks receiving TARP money and other special assistance -- has increased the length and severity of the downturn...The other major failing of the TARP was its failure to impose conditions that required the reform of the financial structure itself... The failure to impose serious restrictions on the banks both undermined public confidence in government and also left the conditions in place for further crises.
On October 25th, Dean attended the Showdown in Chicago, a series of protests organized by a number of community groups and labor unions at the American Bankers Association annual convention. Dean helped publicize the Showdown with a Guardian Unlimited column, Won’t You Please Come to Chicago, No One Else Can Take Your Place. His post on the opening day of the Showdown, The American Bankers Association's 15 Minutes of Fame in Chicago, ran in the Huffington Post and on Michael Moore's website.
Dean joined with economists from the Political Economy Research Institute to state that The Federal Reserve Must Counteract Asset Bubbles in order to prevent the need for future bailouts. He continued his critiques of the Federal Reserve and Treasury Department's actions actions during the bailout in posts such as Bernanke Forgot About His Role In Causing the Great Recession, The Financial Crisis: A Failure of Regulators, Not Regulations and Unemployment is Up, But Bernanke Saved the Banks.
Dean commented on on many aspects of financial reform legislation, including efforts to audit the Federal Reserve and impose a financial transactions tax, in The Vampire Banks Rise Again. He connected executive pay caps with the government's implicit support of "Too Big to Fail" banks in another Guardian column, Why Do Bankers Need to Be Paid 1000 Times as Much as Firefighters? And he emphasized the need to break up "Too Big to Fail" banks in order to avoid future bailouts in Financial Reform: Don’t Touch the Banks, Get a Smarter Fed.
OMB Watch has been advocating for financial transparency in government by monitoring developments in the $700 billion bank bailout program, TARP, in congress, at the Treasury Department, and at the Federal Reserve Bank. As part of this effort, OMB Watch has been tracking legislation related to TARP and larger bailout efforts from Congress and compiling the information into a publicly-accessible spreadsheet.
OMB Watch also continues to write about TARP on OMB Watch's blog, The Fine Print, and in OMB Watch's bi-weekly newsletter The Watcher. Through these publications, OMB Watch analyzed a new TARP program, finding significant conflicts of interest (Latest TARP Program Poses Significant Conflict of Interest Issues), and examined TARP lobbying rules (Sunlight Foundation Dissects TARP Lobbying Rules). We have been following Rep. Carolyn Maloney's TARP database bill (House Moves to Give More Access for GAO, SIGTARP, and the Public), which OMB Watch has long supported, as well as credit rating agency reform (Credit Rating Agency Regulation Bill Approved by House Panel). OMB Watch has repeatedly highlighted the Special Inspector General for TARP (SIGTARP) reports (SIGTARP Quarterly Report Highlights Lack of Treasury Action, SIGTARP: Treasury Was Not Significantly Engaged in AIG Oversight, Transparency Precipitates Trust), in an effort to shed light on the lack of transparency and oversight in the program, and help enact SIGTARP's recommendations to Treasury.
Project on Government Oversight (POGO)
POGO recently sent a letter to Congress expressing our objection to a major loophole in the over-the-counter (OTC) derivatives legislation. POGO also joined a wide range of groups from across the political spectrum that are calling on Congress to delay the reappointment of Fed Chairman Ben Bernanke until an audit of the Fed is completed. Finally, POGO issued a press statement on an audit by the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) that examined the full payments made to AIG's counterparties.
In addition, POGO has continued to provide commentary and analysis on its blog on numerous bailout-related issues, including the House's passage of an important bailout transparency bill, the Paul-Grayson amendment to audit the Fed, a GAO report on the auto industry bailout, the SIGTARP's latest quarterly report to Congress, a comprehensive GAO report on the TARP, another potential conflict of interest for bailout asset manger BlackRock, and a SIGTARP audit on the initial disbursement of TARP funds.
Taxpayers for Common Sense (TCS)
Check out TCS' detailed biographies of bailed-out banks. The bank biographies offer a wealth of detailed information on the institutions helped by the Troubled Asset Relief Program (TARP), and are an invaluable resource for journalists, researchers, and citizens.