Very few really tough questions are ever asked of the Federal Reserve and the Treasury.   Apparently, Bernanke and Geithner feel they only have to answer to the President and Congress.   We are not privy to questions the President might ask them and I don’t feel we should be entitled to invading that privacy.   And as for Congress?    That’s a joke.   Of course, that’s largely open public record and we get to see the Congressional testimony by Geithner and Bernanke on multiple networks (even though I still haven’t seen them swear to tell the truth and nothing but the whole truth).

But what do we ever learn from either the testimony or the “questions”?   If you have ever watched one of those circus acts, you’ll see a lot of political speeches and very little substance.  Usually, you see your representatives showing total ignorance of capitalism, markets, economics, finance, accounting and relevant subjects.  Occasionally, somebody like Rep. Ron Paul or Senator Bunning might have the microphone and show that at least a few of these people have the intelligence to ask insightful and tough questions.   On those occasions, both Bernanke and Geithner (as their predecessors did before them) will seem offended or just look with disdain at someone for daring to stand up for Americans and demand accountability and competence.   The answers are rarely (if ever) insightful or even come close to responding to the actual question.   As for the media, they do a great job lobbing softball questions and making sure they don’t upset the guest so they have a chance at another future useless “interview.”   In the few times somebody like Bloomberg wants to ask real tough questions that the Fed and Treasury don’t want to answer it has to file a FOIA lawsuit and you’ll get appeals from our government all the way to the Supreme Court just to avoid answering them.  So in the end, we get lies and avoidance and incompetence from the people in power.

As for the common American, Bernanke and Geithner are not accountable to us.   But we can at least ask some questions knowing that they will never be answered or answered correctly or answered honestly.   But we should ask them anyway!   I have asked questions of the Fed via their email mechanism and after a long time, got a useless response.   But I asked anyway.   I have asked more than a few painful questions via this blog to put these people on the spot and of course, nothing happened.  But I asked anyway.   It’s important to do that for several reasons.   First, it causes awareness of problems that the politicians would much rather ignore and second, it attempts to preserve one of the few elements left of our previous rights and the representative democracy I used to believe existed in this country - the right of free speech and to question your government.

I’ll keep asking the questions.

When AIG went down, the government made a lot of promises that have not been kept and made deals under powers that they do not have.   At the time, very few questions were asked.   Political leaders just rolled over and let Bernanke and Geithner and Paulson do what they wanted to do.   The media reported the garbage they were fed by the government.  And for the most part, most Americans did nothing other than say they were happy that the government was stepping in to save us.  It is only after the damage is done and we see that AIG is a bottomless pit, that AIG was used to bailout its counterparties, that taxpayers will lose billions of dollars on their AIG investment, that the NY FED led by Geithner asked AIG to withhold the truth, etc. etc. that we finally find out some of what was going on.   Now questions are being asked but after all this time and all that lost money, what will we get out of asking them?   Do you think it will undo the damage?   Do you think it will prevent a similar problem from happening?

In the AIG example, people were outraged about the payouts at 100 cents on the dollar to Goldman and other AIG counterparties.   But the money is gone.  And as Geithner said, it won’t come back.   Remember, that was about $100 billion.

Here’s a few questions on a similar but much, much bigger issue….

1) Of the $1.25 TRILLION the Fed is using to buy Mortgage Backed Securities from “Primary Dealers”, how many cents on the dollar did the Fed purchase them for?

2) Who did the Fed purchase them from exactly? (as in provide a list of names and how “much” was bought and at what price)

They will never answer those questions.   Yet, they are the same kind of questions we are asking now about AIG when that money is already gone.   Given that the Fed is suggesting it will extend and expand its MBS purchase program, wouldn’t it be nice to get the answers?