We confess once again that we are not really economists, we are your loyal government watchdog, and we've been diligently poring through articles, books, and papers, attending seminars, even obtaining non-public CRS reports, all in an effort to comprehend and then explain this massive $700 billion bailout and what it means for the U.S. taxpayer.
Well, silly us! It really doesn't matter what the Emergency Economic Stabilization Act of 2008 (EESA) says, or how the Troubled Asset Relief Program (TARP) was set up. There's no point in trying to suss out the newly created oversight bodies, or all the overlapping reporting requirements, or how many of those reports will be public (only one is required to be), or even what factoids those reports might contain.
None of this really matters because, as it turns out, apparently the only thing that does matter is whether an institution's chieftains have good longstanding relationships with current or incoming Treasury officials.
Exhibit A might be the Washington Post's excellent piece on the “Familiar Trio at Heart of Citi Bailout,” which explains how the Citigroup bailout, the newest example of this ad hoc response to economic meltdown, was put in play “by three men whose professional lives have long been intertwined”: Treasury Secretary Henry Paulson, Citigroup board member and former Treasury Secretary Robert Rubin, and Timothy Geithner, president of the New York Fed and soon-to-be Treasury Secretary. Rubin and Paulson were colleagues at Goldman Sachs. Geithner worked for Rubin at Treasury during the Clinton administration. As head of the Federal Reserve Bank of New York, Geithner has been directly responsible for oversight of Citigroup, and has been closely involved in discussing its rescue with Paulson. Rubin has been on Citigroup's board since 1999.