Transparency Indeed

For weeks, there has been a drum beat complaining about the lack of transparency in implementing the financial bailout. These complaints have insinuated that banks are using TARP money for "inappropriate" purposes, such as making acquisitions or paying bonuses, rather than "appropriate uses" such as lending.

As one of my previous columns makes clear, this is a completely incorrect reading of the economics of the situation. But the Wall Street Journal highlights what is the genuine problem with a lack of transparency in the financial bailout: Congressmen and other politicians are pressuring regulators to direct bailout money to certain banks.

How about that. What a shock that where there is a pot of money, Congress will get their hands in the middle of it. This type of political pressure will only raise the cost of the bailout, as banks that otherwise wouldn't get funds do so.

Sounds like extensive hearings and media pressure should be brought to bear on these shenanigans. But since Barney Frank is one of those who have applied pressure to help a favored bank, don't count on hearings any time soon.