Bailout Bullshit Update

Radley Balko writes:

Last week, I noted that despite assurances from Treasury officials that the bailout largess would be distributed in a transparent, accountable manner, one of the first big contracts awarded by the federal government, to the Bank of New York Mellon, had the actual amount of money to be paid to the bank redacted before the contract was made public.

The new website BailoutSleuth now reports that subsequent bailout contracts to PriceWaterhouseCoopers, Ernst & Young, and the law firm Simpson, Thatcher & Bartlett were also posted with significant information redacted.

No matter what happens to the economy, it looks like business and finance journalists will have plenty of job security over the next couple of years, if for no other reason than to track how the government spends all of this money. I'd expect debacles at least on par with the awarding of contracts in Iraq and after Hurricane Katrina.

But, regardless of whatever abuses might be going on, something still had to be done right? Maybe not.

Matt Welch writes:

Three scholars associated with the Federal Reserve Bank of Minneapolis decided to do a little quick fact-checking of "widely held claims about the nature of the [financial] crisis and the associated spillovers to the rest of the economy," and put their findings in a new working paper [PDF]. What'd they learn?

The financial press and policymakers have made the following four claims about the nature of the crisis.

1. Bank lending to nonfinancial corporations and individuals has declined sharply.

2. Interbank lending is essentially nonexistent.

3. Commercial paper issuance by nonfinancial corporations has declined sharply, and rates have risen to unprecedented levels.

4. Banks play a large role in channeling funds from savers to borrowers.

Here we examine these claims using data from the Federal Reserve Board. Our argument that all four claims are false is based on data up until October 8, 2008.

Whole thing, well worth a read (and probably a drink), here.

This is one of those times when, given how awful all of this is, being able to say I told you so doesn't cheer me up whatsoever.

One of the first things Obama does after he's sworn in should be to make all of the bailout's details public. Thankfully, he has a record of championing governmental transparency. In any case, it may be the first real test to see whether he lives up to any of his campaign's hype.

Update:

And here comes the auto industry bailout. But what the hell? What's another $10 billion?