The Opposite of Transparent

The NYT had a good piece about this week's biggest bailout - the $800 bil for consumer and mortgage loans. It notes that "the most troublesome unknowns are how the maze of protections for investors and consumers will change economic and political behavior in the future."

The lack of transparency is a political issue, since public money is being used with no transparency or accountability to prop up private interests, nearly all of whom were active agents in causing the problems for which they are being bailed out. The injustice is plain. Peter Cohan at Blogging Stocks offers the best short take on secrecy's motives.

Others are noting that the feds are letting banks do whatever they want with the money, which doesn't include actually lending it to people. So the failure of the bailout to set lending standards and write rules for bankers explains why the financial handouts are not helping the real economy, where housing prices continue to fall as credit stays hard to find.

An even smaller number of commentators are making an equally crucial point: the deliberate concealment of bailout distributions is not maintaining confidence, as the feds claim secrecy does, but keeping investors and bankers in states of fear and doubt. We have no idea which banks are getting what, "we have no idea what banks are doing with the money being loaned to them," as Bloomberg's Editor in Chief Matt Winkler noted a couple of weeks ago." He concluded that "without transparency the market is going to have difficulty recovering."

Not only is transparency just and democratic - it would also be more effective at saving the real economy from enormous pain.