Rachel Morris
Mother Jones
August 12, 2009
Over at Politics Daily, MoJo’s DC bureau chief, David Corn, points out that all the fuss over death panels and granny-killing government health care has overshadowed some very disturbing economic news. The congressional oversight panel monitoring the bank bailout, or Troubled Assets Relief Program (TARP), released a report Tuesday on the toxic assets that helped suck the country into an economic vortex. And, as David writes, the panel found that "the Treasury Department has not used its TARP billions to purchase this junk—which includes both lousy commercial and residential mortgages and securities based on lousy mortgages—and that billions of dollars of toxic assets remain on the books, threatening the security of numerous financial institutions."
So far, David observes, the news that TARP’s billions have not been used as intended, and that the economy remains at real risk, has barely registered on the media’s radar. Read the rest of the column here.
An Economic Time-Bomb Being Mishandled by the Obama Administration?
David Corn
Politics Daily
August 12, 2009
Is there a ticking time-bomb for the US economy? And is the Obama administration, Congress, and the media not paying it sufficient attention? That seems to be the message of a government report released this week that drew not as much notice as it deserves.
[efoods]This is all about those toxic assets–now euphemistically referred to by the US government as "legacy assets"–that were at the core of the economic meltdown. Though some economic news of late has been not so bad–economic contraction slowing, job losses leveling off, banks passing stress tests–these toxic assets still pollute the nation’s financial system and endanger it.
On Tuesday, the Congressional Oversight Panel, which was set up to monitor the $700 billion Troubled Assets Relief Program (aka the Big Bank Bailout), put out another of its monthly reports, and this one notes that the Treasury Department has not used its TARP billions to purchase this junk–which includes both lousy commercial and residential mortgages and securities based on lousy mortgages–and that billions of dollars of toxic assets remain on the books, threatening the security of numerous financial institutions.
In other words, whoops.
What’s happened is that accounting changes have made it easier for banks to contend with these assets. But this bad stuff hasn’t gone anywhere. It’s literally been papered over. And it still has the potential to wreak havoc.
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