Congressman to Bernanke: Where’s the money?

Alan Grayson (Image from Telegraph UK)

Update: This article has been edited to read “$2 trillion in taxpayer money.” The original read “$2 million in taxpayer money.”

This week, Congressman Alan Grayson (D-FL) launched UnMaskTheFed, a website devoted to finding out where the $2 trillion in taxpayer money went during the bailout frenzy. Grayson wants answers before Chairman of the Federal Reserve, Ben Bernanke, is up for confirmation to his second term.

Grayson is the new sweetheart of the left, a man the Wall Street Journal claims is “waging a one-man war against contractor fraud in Iraq,” and who once described the Republicans’ health care plan as “don’t get sick, and if you do get sick…die quickly.” The GOP demanded an apology. They got this remark from Grayson: “I apologize to the dead and their families that we haven’t voted sooner to end this holocaust in America.”

The man doesn’t back down from a fight, so it’s exciting to see him lead this quest. This isn’t the first time Grayson has gone for Bernanke’s jugular. Back in July, Grayson grilled the Fed Chairman over the same question: Where did the money go?

Bernanke’s response: “I don’t know.”

Oh. It seems Chairman of the Federal Reserve is the only occupation where this kind of response is excusable. If a Cardiologist responds, “I don’t know” to a triple bypass question, or a mechanic responds, “I don’t know” to a question about a carburetor, their careers in those respective fields will probably be short-lived.

Refusing to name the financial firms the Fed lent to or disclose the amounts or the assets put up as collateral were only the beginning of Bernanke’s sins. He, along with Treasury Secretary Hank Paulson, also misled the public about the financial weakness of Bank of America and other early recipients of the government’s $700 billion Wall Street bailout, creating “unrealistic expectations” about the companies and damaging the program’s credibility, according to a report by the program’s independent watchdog.

Imagine a Cardiologist who responds “I don’t know” to a question about triple bypass surgery, and then compulsively lies to you about some other kind of heart surgery you should get that ultimately causes your heart to explode. That’s Dr. Bernanke.

Earlier this month, The Washington Times reported that TARP Special Inspector General Neil Barofsky said senior government officials and Wall Street regulators, including Bernanke and Paulson, had “affirmative concerns” that several of the nine institutions were financially shaky, and yet they loaned Bank of America and eight other “healthy” financial institutions a total of $125 billion.

But all of this is unsurprising. It’s also not very shocking that Bernanke answered Grayson’s prying questions with vague answers. The government funneled much of the bailout cash through the Fed precisely because they didn’t want the funds allocated democratically. Operating in total secrecy means that the Fed could give substantial chunks of cash to anyone without public deliberation.

You’ve heard of a “Boys’ club.” Well, this was the “Money club.” All the right players won. As soon as the mortgage bubble popped, money started flying all over the place, quickly. Goldman Sachs fan boy, Timothy Geithner, held secret meetings with the Big Three (Goldman Sachs, Citigroup, JPMorgan Chase) to discuss who would get the biggest slices of the taxpayer money pie. You can be sure Lloyd Blankfein, the CEO at Goldman Sachs Group Inc., wasn’t asking Geithner to gift the funds to schools in South Side Chicago.

The money travelled so far, so fast that taxpayers barely had enough time to figure out what date it was when — BAM! — Chinese carmaker Geely Automotive received a $334m investment from Goldman Sachs to help fund expansion. Huh? Goldman Sachs is investing in foreign cars with what money, exactly? Considering Goldman Sachs said they’d be belly-up without taxpayer cash, we must assume they made said investment with taxpayer cash.

Meanwhile, autoworker unions are going the way of the dinosaurs, and foreign car imports are undercutting the fair wages movement. Want to make a living wage? Tough shit. The corporation can just outsource your labor to a country without civil rights, while Goldman Sachs competes against the few remaining US autoworker jobs — with the taxpayers’ own money. This is rape, new Millennium-style.

This is what happens without transparency laws. It’s impossible to follow the money when these transactions occur behind a curtain of professional jargon. Ask any financial guru “Where is my money?” and they’ll launch into a diatribe about liquidity swaps and derivatives, and when you finally regain consciousness, they’ve run off with $2 trillion.

The Fed busily doled out trillions of dollars, and no one really understood what was happening — not because Americans are too stupid to understand the system of an oligarchy stuffing their peeps’ coffers  – but because the whole process is opaque, and the highest echelons of the financial world have developed a culture that is inaccessible to average Americans. Instead of trying to explain the robbery in clear terms, the media  – the supposed sentinels of the people — opted to interview Geithner, Paulson, and Bernanke about how they felt during their months of pillaging. Are you sore from running around with all those moneybags strapped to your back?

Wall Street practically rolled their eyes when taxpayers demanded to know where all the bailout money was going. Why should they have to explain themselves to the little people? After all, they’re the “serious professionals,” who should totally be trusted even as they continue to either hoard wealth, or lose it on some new hair-brained bubble scheme.

Requesting a clear map of where the money went seems like a reasonable demand, and yet Bernanke has consistently been unwilling to provide it, either because he’s A) Hiding something or B) Incapable of providing an answer. Either answer seems like grounds for dismissal. Oh, failing to predict one of the largest economic catastrophes in the history of the western world should also probably be factored into this whole “second term” business.

But whether Bernanke stays or goes, there needs to be more transparency at the Fed. Grayson’s website is a step in the right direction. If only the Congressman’s colleagues showed as much interest in accountability.