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Treasury Facing More HR Problems On Bailout?
Earlier today we noted that the Treasury Department had hired staff with the specific attributes needed to carry out its original plan for the bailout -- buying banks' bad assets -- only to then decide that it would change its approach by directly injecting capital. That news raised questions as to whether the department has the right people in place for what's an extremely complex and crucial task.
And a report in today's Wall Street Journal sheds a bit more light on the hiring issues that have plagued Treasury's response to the crisis. It reveals that the department is struggling to bring on enough people to handle the glut of applications for assistance that are flooding in from troubled financial institutions.
Neel Kashkari, the man running the TARP program, said at a recent at a luncheon before a housing organization that the department's Office of Financial Stability is operating at half-staff, with about 40 full-time employees. Kashkari said he hopes to double that number by the time the Obama administration takes over on January 20th.
(And by the way, granted Kashkari needs to keep the pubic informed on what he's doing, but doesn't he have more pressing matters to attend to right now than attending luncheons?)
The Journal adds, not exactly reassuringly:
In the past month, the Treasury has been scrambling to make major policy decisions while at the same time conducting the nuts-and-bolts tasks of finding a permanent staff. Decisions have largely been left up to interim staff members, many from other federal banking regulators, who are temporarily at Treasury but are expected to eventually return to their previous positions.
Part of the manpower problem here may be caused by the impending transition. According to Wayne Abernathy, an executive at the American Bankers Association, many Treasury staffers may be headed for the door in advance of the changeover, making it especially hard to keep the department fully-staffed.
Abernathy also suggests, intriguingly, that it may have been in part because of this very problem that Treasury switched from the asset-buying approach to the capital-injection approach. "I don't think that was a small part of why Treasury in the end abandoned the asset-purchase program," he told the paper. "It's very people-intensive."
But it doesn't appear that the switch has entirely solved the problem. And if, in addition to having too few people, Treasury also has the wrong people, as was suggested by that earlier report we noted, that would hardly help the situation.
This may have more to do with a desperate and extraordinary situation than with any deliberate malevolence or even incompetence, but given the stakes, the Treasury's personnel problems are worth keeping an eye on nonetheless.
Josh
Zachary
This has the makings a cluster****.
-- Cris
My site: Obama Wallpaper Archive
November 28, 2008 2:48 PM | Reply | Permalink
Bush is a cluster**** has been for 7 years!
Can you name just one project that he started that ended up successful? I can't.
November 28, 2008 3:13 PM | Reply | Permalink
Congress should not release another dime until Bush and Paulson are out of office. That includes any money to Detroit. I beleive all this crap is nothing more than a parting gift from Bush to his business cronies. He has been raiding the treasury in one form or another for eight years. Pelosi and Reid need to strap on a pair and just say "NO" for two more months.
November 28, 2008 2:51 PM | Reply | Permalink
This bailout, and the way it is being administered, only makes sense if it is believed that the goal of the Bush Administration is to bankrupt the US Treasury. They have been competent at this and even have the support of the Democrats in Congress.
November 30, 2008 8:54 PM | Reply | Permalink
November 28, 2008 3:11 PM | Reply | Permalink
(And by the way, granted Kashkari needs to keep the pubic informed on what he's doing, but doesn't he have more pressing matters to attend to right now than attending luncheons?)
==
FWIW the thing that attracted me to TPM years ago was informed comment. Lately I've been reading more and more of this type of thoughtless snark here. It's not smart, it's lazy cynicism disguised as wisdom and I can get that anywhere on the Internet.
Put it this way: if Kashkari did not attend any of these functions you'd bust him for not making time to meet with major housing organizations. (BTW, the fact that you think industry organization luncheons are anything but work tells me you've never been to one. They are horribly un-fun.)
If you have an intelligent, non-kneejerk, fact-based comment to make, do it. Otherwise save the snark for your personal blog.
November 28, 2008 3:23 PM | Reply | Permalink
Aaaah geeze hubcap...here's a better way to put it...(I too am kinda mad this staffing issue came out at a luncheon)
Kashkari was mandated to keep Congress and the Taxpayer informed. If Staffing has been an issue for an extended period, such that it may have altered Treasury plans for yours and mine trillion dollar bailout, That shit needed to come out IN FRONT OF CONGRESS then.
Not at some industry only working lunch.
It smacks of a certain disdain for us lowly peasants, that he couldn't be bothered to keep us fully informed...
I think I know where yer coming from, but I also think there are more important battles to be fought.
November 28, 2008 4:39 PM | Reply | Permalink
This bullshit bailout is being run like FEMA after Katrina. Leave the TARP staff deliberately undermanned, rush the paperwork through and nobody will ever figure out exactly who got what.
You can pick up some nifty info if you follow the lunch crowd online. I googled "Neel Kashkari luncheon" and learned the Treasury is planning to bail out private banks
From Kashkari's speech at the 11/10/08 Securities and Financial Markets Association Summit held in NYC:
"A private bank application form is being created; its deadline for application will be extended."
Private banks exist to service wealthy people. Why should the US taxpayer be expected to bail out a private bank?
Will the US taxpayer own equity in these private banks and if so, who is determining the value of that equity? And will the banks stay private?
What are these private banks going to do with their cheap bailout money? Loan it to rich people so they can buy distressed properties at below market price and flip them when the markets recover?
Screw the private banks. Let them all go under. Who cares? Use the bailout money to hire out-of-work private bankers to manage the newly-created taxpayer not-so-private bank that will focus on buying subprime mortgages at below market prices using info picked up at Treasury luncheons.
I think this is the real reason Secretary Paulsen changed course on the troubled asset buyback plan. If private investors are buying up the subprime mortages on the cheap, this bullshit bailout was unnecessary.
In fact, I read a snippet of a news story during the bailout debate about private investors who really had come forward with an offer to buy all of the subprime mortgages but the offer was supposedly dismissed. Maybe it wasn't.
If private investors are now buying up the subprimes, Paulsen had to change course. Otherwise, the Bush administration, Congress and Wall Street wouldn't have a reason to spend hundreds of billions of dollars for the benefit of their families, friends and supporters in the name of saving the economy.
Watch. Any day now, the bloodsucking vampires running credit card companies will suddenly realize they, too, need to be bailed out because their nefarious scheme to seize equity in the homes of customers who default isn't working out as well as they planned. (Remember the bankruptcy reform act?)
I'd like to know why none of the big hedge funds have gone belly up in the last few months. Are they being bailed out on the q.t. or are they trading on insider info from guys like Kashtari?
How much money do Goldman Sachs partners have in hedge funds? How about Paulsen? He in any hedge funds?
The Bullshit Bailout - One of the biggest taxpayer ripoffs in American history
November 29, 2008 10:37 AM | Reply | Permalink
Here's a hot one.
Jefferson County, home to Birmingham, Alabama's largest city, is on the verge of bankruptcy and Governnor Riley has been begging Neel Kashkari for a bailout.
Guess who helped create the financial crisis? Yup, the crooks on Wall Street who pushed derivatives as the answer to the county's financial woes.
I've been complaining about NYS debt for years. I wonder what will happen when NYS taxpayers finally wake up and discover NYS bonds are secured by NY's tax revenue stream, i.e., bondholders get paid before anyone else, and I do mean anyone else, gets paid.
Here's another possible piece of NYS fiscal insanity. The Empire State Development Authority issues bonds for "correctional and youth facilities services" which sounds like NYS is borrowing money to operating its prisons but I've never been able to verify whether that is the case.
Issuing bonds to fund current operating costs is like paying for groceries with a credit card. It means you are in big trouble.
Next up: The State and Local Underfunded Pension Fund Crisis.
I can demonstrate why Palin had to have known as early as 2002 or even 2000 that the state of Alaska's actuarial firm was rigging the unfunded pension liabiity numbers in election years. Hint: Look at Wasilla's unfunded pension liability in 2000, 2001, 2002 and 2003 vs increased payroll costs.
November 29, 2008 11:31 AM | Reply | Permalink