The Watchdog Barks!

This morning the Senate Finance Committee is meeting to review the extent of the progress of recovery from the economic crisis inherited by the Obama Administration. Testimony is expected from Elizabeth Warren, who chairs a Congressional oversight panel and has not been shy in accusing the general Washington establishment (and Congress in particular) of being the primary impediments to economic recovery. Warren will be joined by Neil Barofsky, who is serving as Special Inspector General for the effectiveness of the bailout bill.

According to a report this morning by James Politi for the Financial Times, today Barofsky may be a greater thorn in the side of the Senate than Warren has been in the past:

The Obama administration’s signature programme to help troubled homeowners is struggling to meet its objectives and suffers from a lack of “transparency and accountability”, according to a scathing assessment by the special inspector-general for the financial bail-out.

The watchdog, which has previously been critical of the Treasury department’s Home Affordable Modification Programme (Hamp), upped its criticism ahead of a Senate finance committee hearing scheduled for Wednesday morning on the progress of the 2008 bail-out, which included more than $50bn to aid the stricken US housing market.

The report charges that more than a year after Hamp began, the programme has not made an “appreciable dent” in foreclosure filings. The quarterly report also slammed the Treasury department for not providing realistic benchmarks for success of the programme, accusing it of “clinging” to a “meaningless” goal of helping 3m-4m Americans in making trial modifications to their mortgages.

“Treasury’s refusal to provide meaningful goals for this important programme is a fundamental failure of transparency and accountability that makes it far more difficult for the American people and their representatives in Congress to assess whether the programme’s benefits are worth its very substantial cost,” the report said.

All this should reinforce the point Warren has been trying to make since she assumed her post. Over the past year the numbers that are watched by the shareholders have tended to be pretty good; but that is a "good" only from those shareholders' point of view. The real victims of the economic crisis do not signify in the shareholders' worldview; and it is becoming increasingly clear that they do not signify in the worldview of the current Administration, regardless of any promises of "change we can believe in" during the last Presidential Election. This is bad news for the American public, but worse news waits around the corner. Republicans now have yet another stick for beating up on the Obama Administration, but we all know that they will use that stick for their own political gain and that of their supporters who want nothing more than a return to the unregulated madness of the Bush Administration. Neither political party speaks for Main Street, because there is neither political nor financial gain in such speech. Whatever happens on Election Day, November may very well be the prologue to the mother of all winters of discontent.