I understand the impulse to cut the Obama Administration and the Democratic Congress some slack — they came into power under circumstances too awful for any government to manage well, given the number of fragile glass balls in the air, and it is a national habit to bolster new executives with high approval numbers until they inevitably use that latitude to mess up. What I want to suggest, especially to fiscal conservatives like Andrew who are inclined to give Obama & company the benefit of various doubts for awhile longer, is that we literally cannot afford to do so.
Consider this breathtaking, terrifying exchange:
Rep. Alan Grayson (D-Fla.): Have you reached any conclusions about the Fed expanding its balance sheet by over a trillion dollars since last September?
Federal Reserve Inspector General Elizabeth Coleman: We have not reached any conclusions.
Grayson: Do you know who received that money?
Coleman: For, the, we’re, we’re in the process right now of doing our review, and, um…
Grayson: Right, but you’re the Inspector General. My question to you specifically is do you know who received that one trillion dollars plus that the Fed extended and put on its balance sheets since last September? Do you know the identity of the recipients?
Coleman: I do not know. We have not looked at that specific area at this particular point on those reviews…
Grayson: Well, I have a copy of the Inspector General Act here in front of me, and it says among other things that it’s your responsibility to conduct and supervise audits and investigations related to the programs and operations of your agency. So I’m asking you if your agency has, in fact, according to Bloomberg, extended $9 trillion in credit—which by the way works to $30,000 for every man, woman, and child in this country. I’d like to know, if you’re not responsible for investigating that, who is?
Coleman: We actually, we have responsibility for the Federal Reserve’s programs and operations, to conduct audits and investigations in that area. Um, in terms of who’s responsible for investigating—would you mind repeating the question one more time?
Grayson: So are you telling me that nobody at the Federal Reserve is keeping track on a regular basis of the losses that it incurs on what is now a $2 trillion portfolio?
Coleman: I don’t know if—you’re mentioning that there’s losses. I’m just saying that we’re not, until we actually look at the program and have the information, we are not in the position to say whether there are losses or to respond in any other way…
Admittedly, I am not entirely conversant in the topic being discussed, but is there any possible gloss on that conversation that isn’t phenomenally troubling? 2 trillion dollars? Oh yeah, I remember hearing something about that. Is it my job to keep track of it? Technically, except, um, well it depends on what you mean by responsible, really. I feel as though I’m watching that scene in It’s a Wonderful Life where well-meaning Uncle Billy wraps the Bailey Brothers Savings and Loan reserve funds in a newspaper, promptly forgets having done so, and hands the town’s fiscal future to the first unscrupulous profiteer he encounters.
As I said, I understand the impulse to cut these folks some slack, but upon reflection I cannot really think of a time when that kind of attitude actually helped the country, though the CW says there’s supposed to be a honeymoon period. Well, okay, can it be over now? The sums of money at stake here are really phenomenal, and safeguarding them really ought to be a priority—if it takes pointed criticism to illuminate the apparent fiscal irresponsibility we’re witnessing, so be it.
So well done, Rep. Alan Grayson (D-Fla.). Now if the press and the blogosphere would do some follow-up on a scale commensurate with what’s at stake…