I've been working on this nice little post about BEA data showing 2009 to be pretty much the most awesomely magnificent fall in auto sales since, like, the Pony Express, when I read the latest Bloomberg piece on the ongoing saga of the drip-drip-drip of revelations surrounding the AIG/Fed/Goldman/et al scandal. So, cars now have to wait for the weekend.
This story exemplifies the problems with secrecy. It makes for bad policy and bad politics. On the policy side, a lack of transparency makes it easier for actors to ignore the best interests of the public, while on the politics side, it means that the bad news slowly leaks out over a protracted period of time.
We are at the bizarre point now where situations that should be case studies for everything that's wrong with the crony capitalism of the Reagan-Bush era are being turned into defend-the-ramparts or remember-the-Alamo entrenchment by Democratic leaders.
Our party (theoretically) values things like open government, the reality-based world, public opinion, and the common good. Supply side economics and trickle down theory are things we chuckle about, not embrace. The GOP is supposed to be the party of Big Business. Yet, it would be difficult to try to concoct conduct over the past 18 months or so that would make Democrats more responsible for the failures in our system than the actions Democrats have actually pursued.
As posted at BusinessWeek in the very first paragraph (the whole article is worth reading)
The Federal Reserve Bank of New York, then led by Timothy Geithner, told American International Group Inc. (AIG) to withhold details from the public about the bailed-out insurer's payments to banks during the depths of the financial crisis, e-mails between the company and its regulator show.
Now, there's nothing really surprising there. You can read my opinions on our lovely flirtation with privatized gains and socialized losses, or you can do five seconds of The Google and read others' opinions. The main point I want to explore here is that the very nature of the secrecy itself is causing unnecessary problems. Why drag this out? The longer scandals drag on, the worse it is for the people in power. Right now, that's us. We couldn't do more to make ourselves look bad even if we tried.
Just take a look at where this latest round of information came from.
The e-mails were obtained by Representative Darrell Issa, ranking member of the House Oversight and Government Reform Committee.
As MeteorBlades aptly summarized this afternoon
You won't hear any applause in this corner for the obstructionist, ultra-wealthy Darrell Issa. His self-funded recall petition encumbered us Californians with Arnold Schwarzenegger in the governorship, a position Issa himself hoped to capture. His support for English-Only laws, right-wing attacks on ACORN, dissing of the 9/11 widows and other antics since his self-funded campaign put him in Congress epitomize the politics progressives are duty-bound to grind into dust.
There are basically two positions on how the particulars of the AIG bailouts were handled in the second half of 2008. Some people believe that it was a necessary course of action undertaken by people operating in a lot of uncertainty to avert a cataclysmic breakdown of our financial system, an emergency that would cascade throughout the rest of our society were it left unchecked. Some people believe that the actors involved, after a period of negligence where they failed to prevent the problems, basically engaged in a conspiracy to defraud the American public rather than addressing the real issues. I'm quite passionately in the latter camp.
But transparency is something that adherents of both perspectives should embrace, not just those of us who think the conduct was improper. The reason is that scandals which have an impact are those that fester, forcing the alignment of defenders and attackers to shift from disputes centered on issues to disputes centered on party politics. If the actors in the Fed, AIG, investment banks, and Bush Administration really acted in good faith, trying to do their best to tackle a difficult problem, then it's in everyone's best interests to get all the details out into the open as fast as possible. If they didn't act in good faith it's in our best interest to figure that out and get them out of a Democratic Administration.
Politically speaking, it's absolutely insane that Republicans are grumbling about corporate friendly behavior of the past several years. They're responsible for it. Instead of capitalizing on that distinction, we're trying to blur it into non-existence. Just from a crass, purely political perspective, having key Administration officials who share personal responsibility for the systemic failures of the past couple decades is a huge political liability. Congressional Democratic leaders should be at the forefront of demanding answers.
If we don't clean house, if we don't change the kinds of advisors, policies, and pronouncements we embrace in the Democratic Party, eventually, we're going to blur the distinction so much with the GOP as to erase a massive demographic tidal wave of disgust with Republican governance.
I asked a while back for someone to explain even one reason for how people like Geithner, Emanuel, Summers, and Bernanke help the political strength of the Administration, and why corporate leaders in the financial industry who mismanaged us into the crisis continue running the same firms today.
I would love to hear economic, political, or any other valid reasons why
1. this was the best policy response and/or
2. why it's in the best interests of the Administration to keep these people and/or
3. why it's in the best interests of the Democratic Party to keep these people and/or
4. why it's in the best interests of the country to keep these people.
This newest bit of the ongoing saga seems an opportune time to renew the request for a reason, any reason, that justifies having people who personify the failures of our system continue serving in key positions of power.
Crossposted at The Seminal at FDL.