When Secretary of the Treasury Henry Paulson stood before Congress and said, "Give me $700 billion in unmarked bills or the economy gets it!" Congress at first responded with a "get outta town" NO! vote.

The very next day, they changed their tune. White-faced and looking more than a little terrified, Congress responded to the threat of global economic collapse by rolling over once again for the shock and awe tactics of the Bush administration. The only safeguard built into the program was the idea to cut the dole in half: $350 billion now, $350 billion if the Treasury manages the first $350 billion correctly.

The first $350 billion is gone, the second on its way, and Paulson has done not one thing he promised to do. As if that weren't bad enough, Paulson has consistently refused to submit what he did do with the money to Congressional oversight and review. Consumer advocate Elizabeth Warner, named a day late and a dollar short to oversee the Troubled Asset Relief Program (TARP) and make sure it is being managed efficiently and as promised, is still trying to get the most basic of basic questions answered, without a lot of success.

Question: Where has the money gone so far?

Answer: We don't know. We don't have to tell you anyway.

Question: What is the plan going forward?

Answer: We don't know. We don't have to tell you anyway.

Question: Has busniness and consumer credit loosened up?

Answer: Stop rushing us. We don't have to tell you anyway.

Question: Have any troubled assets been purchased as originally promised?

Answer: Piss off.

Starting today we have a new President and a new administration in place in the United States. It's past time for the wholesale looting of the American taxpayer to stop.

So where did all that money go?

When Paulson got the first $350 billion, what he noticed first was that banks were in way worse shape than they were when he first asked for the money, and they were deteriorating fast.

The Federal Deposit Insurance Corporation (FDIC) was set up to protect people who keep their money in banks by insuring their deposits up to $100,000 per person. FDIC was set up after the Great Depression to prevent the bank runs that followed the stock market crash of 1929.

FDIC is capable of insuring deposits only if the economic system is basically healthy and if FDIC is only having to seize individual banks of a smallish to medium size on an fairly infrequent basis. It cannot insure your deposit if all the banks in the country are in deep trouble. The average person never thinks about this, but Henry Paulson, Ben Bernanke, the CEOs of major banks, George Bush, and all the good people at the FDIC know this all too well.

When Paulson got the TARP money, he started to use it to broker the sales of failing banks so that a wave of FDIC seizures, (which tend to freak people out), would not occur. So, say Bank A asks for $50 million in TARP funds and Bank B asks for $50 million, but Bank A is closer to failure than Bank B. Paulson gave B $100 million on the condition it had to use the TARP funds to buy out the closer-to-failure Bank A, thus concealing the failure and keeping FDIC funds intact and FDIC seizure off the evening news.

Paulson also poured TARP money as cash infusions directly onto the balance sheets of giant banks. If you include ALL the money that the Federal Reserve AND TARP have just given to banks in the last couple of months, it comes to well over ONE TRILLION DOLLARS, not $350 billion. The reason for that is that in addition to TARP, the Fed has the power to just print up more money and loan (sic:give) it to failing banks.

Well, at least those CEOs are not getting golden parachutes, right?

At least we showed those guys.

Wrong.

Since the banks that were bought up in this way did not technically receive any TARP money (the other bank, the one that did the forced buying got the TARP money), the conditions restricting CEO pay and golden parachutes do not legally apply to the CEOs of the defunct bank. When the bank I used to work for was sold to another bank using TARP funds (to prevent FDIC seizure), the top 6 executives were given retirement packages totalling over $100 million--for their excellent work in ruining the bank. The employees? Most of them have been let go, the rest will be unemployed shortly.

Paulson's defense usually runs something like, "Yeah but you don't know how bad it would have been if I DIDN'T do this." Apart from being totally lame, even if true, that answer skirts the issue of transparency and full disclosure. It may be true, it may not be true, we can't really know. One thing we DO know for sure: We, the taxpayers, are providing the money to these banks, but we, the taxpayers, aren't being included in the decision making. We aren't even being given all the facts.

The Troubled Asset Relief Program was pitched by Paulson as a last ditch effort to unfreeze credit markets by buying up mortgage-backed securities that the banks were keeping on their books at inflated values, thus causing a loss of confidence in their solvency. The idea was that the U.S. government would buy up these crappy investment vehicles, which over time would (hopefully) appreciate, thus erasing the insecurity and getting money to flow again.

The program as first presented would have been similar to a program that successfully solved the Savings and Loan crisis of decades past. Government buys the bad assets, government holds the bad assets, government eventually sells the bad assets at a profit and recoups most of the initial investment.

Many ordinary people mistakenly thought that what TARP would do was buy up subprime mortgages and make the U.S. government hold those bad loans. So immediately lots of self-righteous types got into irrelevant 'moral hazard' arguments about individual homeowners, bragging about how they pay THEIR bills on time and now they have to carry people who don't pay theirs and it isn't fair. They focused on imaginary individual people and the imaginary irresponsible behavior of those scapegoats. It got personal, fast. Yet it was never about individual people and their individual mortgage payments.

If only it was that simple! They seriously misunderstood the problem, and still do. And banks and the U.S. Treasury are all too happy to encourage that misunderstanding. That keeps us fighting amongst ourselves, and keeps our attention off of the subterfuge of the Treasury and the mismanagement of TARP funds.

What happened was this: Wall Street took all those bad mortgages, chopped them up, mixed them with good mortgages, then sold them as investment vehicles that even Harvard grads can't decipher, then sold them again, and again, and again.The problem was not the individual loans--which were unwise but did NOT bring down the entire financial system--the problem was what Wall Street did with these bad loans, which was criminal or bordering on it.

If only we could address real property, we could get a handle on it right now.

The Savings and Loan Crisis was about real property. The U.S. government bought up real property, resold it, then recouped most of the initial investment. This crisis was kicked off by Wall Street creating "investment vehicles" (AKA pieces of paper) that were supposedly backed by valuable property, then crafting those pieces of paper in such a way that no one could figure out which pieces of real property backed them, where the properties were, who held the mortgages, and so forth. The pieces of paper were incorrectly valued as great investments, and banks put them on their books as worth way more than they ever were or ever will be.

So what the Treasury proposed to do with the $700 billion in TARP money was buy up, not real property or even real mortgages, but rather those pieces of confusing paper that banks were listing as worth a lot, even though the rest of the world was catching on that the pieces of paper were nearly worthless.

That was the original plan.

Paulson, by scaring the bejesus out of Congress and the country, was granted the money. As soon as he got it, he changed the whole plan, on his own, and no one stopped him. He changed it again and again, on a weekly, sometimes hourly basis. So no troubled assets have been bought by the U.S., and now, even if we did buy those worthless pieces of paper, it wouldn't stop some of the biggest banks in the world from going belly up.

Why not? Because the assets are on the books for, say $100 billion, and are worth, say $10 million. (I'm making these numbers up for illustration purposes.) If the U.S. buys the assets for, say, $20 million, that immediately puts the bank at a shortage of $100 billion (minus the $20 million payment).

The government has the worthless assets. The bank fails anyway.

But that plan is old news.

We are so past that now.

Now Citibank and Bank of America, two of the largest retail banks in the world, are near failure, and the original crisis--the bad mortgages at the bottom of this pyramid--have still not been touched. People are still losing homes in record numbers. The FBI still doesn't have even a fraction of the staff it needs to investigate all the mortgage fraud perpetrated in the U.S. at the height of the bubble, and no one has one clue of what to do about all of it.

When I say mortgage fraud, I'm not talking about individual people who bought homes they couldn't afford. I'm talking about real estate speculators who bought as many as 50 to 100 slum properties each by taking out subprime mortgages with out of state brokers, then cashing out the 'equity' on the inflated values of their vacant properties. You do this in league with a crooked appraiser who certifies that the crappy vacant house is worth many times its actualy value, then defaulting on all the mortgages, sticking the banks with the debt and the problem properties too. This kind of fraud was rampant during the feeding frenzy that fueled the housing bubble.

In the small Michigan city where I live, in just this one medium-sized town, two men made several million dollars a piece running this scam in 2005. They still have not been prosecuted. The slum homes they bought are now repo-ed and still vacant, and some of the mortgage brokers are now defunct, but these guys still have their millions.

Why have they not been charged? Because the FBI has a backlog of cases that dates back YEARS. In other words, there are so many of these enterprising thieves out there, we don't have the budget or staff to investigate them all.

We know they did it. They know we know. The FBI knows they know we know.

The FBI can't afford to arrest them right now.

Maybe later.

I think it's time for full disclosure and accountability in our financial institutions, the sooner the better. Open the books. Do it now. Let the chips fall. We can't do anything if we can't even see the books.

The banks are going to fail. Seize them, or let them fail, but quit giving OUR MONEY to the same obscenely rich men who caused this mess.That's my suggestion. It's not complex or profound, it's just a suggestion.I'm just a middleaged grunt worker. No one cares what I think. Barack Obama has not called me to discuss this matter, and I'm not waiting by the phone. But that's my idea, for what it's worth. I think it's the least we all deserve at this point.

The Inauguration was inspiring, and I cried right along with most people in the country. Hooray for us, we elected somone with a brain for a change, the first black President in history. We deserve a moment of celebration.

Now, it's time for some action.

Keep up on the status of the TARP oversight committee and let Director Elizabeth Warren know how you feel about it at the U.S. government website set up for this purpose:

http://cop.senate.gov/