Why Are the Media More Interested in Blago Than in Unraveling the Bailout Mystery?

Have you heard what's going on with the government's almost
trillion-dollar bailout and how your money is being spent? Do you know
all you need to know about who's managing all that taxpayer money --
and how effectively it's being used?

Not if you're getting your news from cable TV. Judging by where the
media are focusing their attention, you'd think the Blago/Burris/Reid
and Kennedy/Paterson/Cuomo soap operas are the biggest issues facing
the nation -- and that little thing about the potential collapse of the
world's largest economy is just a sideshow.

Why have the media shown such relatively little interest in the
utter lack of transparency about the bailout. Is it because they are
still in campaign mode -- addicted to small bore, quick burn-out
stories?

The time has come to recalibrate. As Obama transitions to governing
mode, so should the press. Admittedly, governing stories aren't usually
as sexy as campaign stories -- but the reason we cared so much about
the campaign in the first place was to get to the governing.

On top of it, the bailout is a fascinating story. Not so much a
whodunit as a who's-doing-it. This mystery is unfolding right in front
of us, and the size of the victim pool could very well depend on
whether we unravel the mystery in flashback or while it's still in
progress.

Like most good mysteries, this one has a huge cast of characters --
like the Dickensianly named Neel Kashkari, the young Goldman banker put
in charge of the bailout at the Treasury Department, the sharp-tongued
Barney Frank, and the earnest and increasingly bewildered Hank Paulson,
who started off the bailout process by romantically getting down on one
knee in front of Nancy Pelosi and proposing to make the whole thing
official.

But what we know is clearly dwarfed by what we don't know, because
at every point in this story, the government has chosen to draw the
curtains.

Just last week, four firms -- Goldman, Blackrock, Wellington and
PIMCO -- were selected to manage the $500 billion account of
mortgage-backed securities for the Fed. But how they were selected,
what they're getting paid, and what they plan on doing with the money
is all under wraps. "The selection of these managers seems incredibly
opaque," Jeffrey Gundlach, an expert in mortgage-backed securities, told TPMmuckraker.

The head of one of the firms, Bill Gross of PIMCO, assured CNBC
last month that "PIMCO would be the leader here in suggesting to the
Treasury that we would work for no fee." So is Gross holding to his no
fee pledge? We don't know - and the government isn't in any rush to
tell us.

As a GAO report last month dryly concluded:
"The rapid pace of implementation and evolving nature of the program
have hampered efforts to put a comprehensive system of internal control
in place. Until such a system is fully developed and implemented, there
is heightened risk that the interests of the government and taxpayers
may not be adequately protected and that the program objectives may not
be achieved in an efficient and effective manner." In other words, the
money is flying out the door but no one is watching where it's going.

The report also noted that the government still isn't able to say
what the banks did with the first infusion of bailout money. In a
response letter, Kashkari wouldn't say, but noted that the Fed has a
"different perspective" on judging what the banks are doing with the
money. And just what is this "perspective"? He wouldn't say. His
perspective is that we can't know his perspective.

Of course, a lack of oversight was a key reason why Paulson's
original bailout proposal was shot down. So some controls were written
into the legislation so it could pass. And then what happened to the
controls? Did they evaporate? Did they disappear up David Blaine's
sleeve? Were they too toothless to begin with? We don't really know. As
Eric Thorson, the Treasury's inspector general said,
six weeks after the bill passed, "It's a mess. I don't think anyone
understands right now how we're going to do proper oversight of this
thing."

If the media don't go after this story with the same passion they
went after morsels from the campaign trail, or with the same intensity
they are going after every Blago/Burris nugget, and allow the
government and its cronies to disperse a huge pot of taxpayer money
behind closed doors, we know what's going to happen. And that's because
we've seen this same scenario played out before -- in Iraq. In a
devastating Rolling Stone piece, Naomi Klein details
"the many worrying parallels between the administration's approach to
the financial crisis and its approach to the Iraq War." She writes that
"under cover of an emergency, Treasury is rapidly turning into an
economic Green Zone, overrun with private companies collecting
lucrative contracts." If the reconstruction of our economy follows the
path of the reconstruction of Iraq, we are in for a very long, very
hard -- and very painful -- economic slog.

There is an all-too-real economic drama playing out behind the drawn
curtain -- a mystery waiting to be unraveled. And journalistic careers
to be made by those doing the unraveling. So what are the media waiting
for?