Andy Kroll

Andy Kroll

Senior Reporter

Andy Kroll is Mother Jones' Dark Money reporter. He is based in the DC bureau. His work has also appeared at the Wall Street Journal, the Detroit News, the Guardian, the American Prospect, and TomDispatch.com, where he's an associate editor. Email him at akroll (at) motherjones (dot) com. He tweets at @AndrewKroll.

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This Is the TARP That Never Ends...

| Mon Nov. 2, 2009 4:00 AM PST

It was a tall order last fall when then-Treasury Secretary Hank Paulson Jr. asked Congress for $700 billion and nearly unilateral power over how to spend it. With the nation on the precipice of economic Armageddon, Paulson's request was granted. But now, as financial reform legislation makes its way through Congress, some lawmakers are worried that Paulson's replacment, Timothy Geithner, may be attempting another Paulson-like power play.

Currently circulating on Capitol Hill is a draft of the House financial services committee's "Financial Stability Improvement Act," a wide-ranging effort to rein in too-big-to-fail institutions and bolster oversight of the financial-services industry. The legislation, spearheaded by Rep. Barney Frank (D-Mass.), the committee's chairman, and Secretary Geithner, who helped to craft the bill, would also create an oversight council staffed by government financial regulators, and would abolish the Office of Thrift Supervision, an agency faulted for its flimsy regulation before the crisis. (The Wall Street Journal has a good run-down of the legislation here.)

The legislation is meeting stiff oppostion, though, from members of both parties. What has lawmakers like Rep. Brad Sherman (D-Calif.) and Rep. Spencer Bachus (R-Alab.) riled up is a provision in the bill they say gives the White House and Treasury unchecked authority to spend taxpayer money, without Congressional approval, to bail out any too-big-to-fail bank that's poised to topple the economy. Sherman calls the provision "TARP on steroids," writing in The Hill:

Geithner's proposal reminds me of the Troubled Asset Relief Program (TARP), the $700 billion Wall Street bailout adopted last year, but the TARP was limited to two years, and to a maximum of $700 billion. Section 1204 is unlimited in dollar amount and is a permanent grant of power to the executive branch. TARP contained some limits on executive compensation and an array of special oversight authorities. Section 1204 contains absolutely no limits on executive compensation and no special oversight.

Disconcerting, indeed. The economy reached the point of near collapse, in large part, due to a gross absence of oversight. And the TARP as well has been marred by a lack of transparency and oversight: As bailout watchdogs have consistently pointed out, we still know very little about how TARP money was spent by institutions that received billions in bailout cash. With that in mind, do we want financial regulation that institutionalizes this opacity?

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Music Monday: Kerouac's Big Sur Inspires Indie Collaboration

| Mon Oct. 26, 2009 2:15 PM PDT

In writing the music for Death Cab for Cutie's "Narrow Stairs" (2008), singer/songwriter Ben Gibbard holed up in a cabin in Big Sur, California, that was once owned by the poet Lawrence Ferlinghetti—and the place where Jack Kerouac wrote his lesser-known 1962 novel Big Sur. Kerouac's pull evidently lingered with Gibbard. His latest project, released last week, is a soft, melodic collaboration with alt-country rocker Jay Farrar titled "One Fast Move or I’m Gone: Kerouac’s Big Sur."

Far more melancholic than On the Road or The Dharma Bums, Big Sur describes a fictionalized (though clearly autobiographical) Jack; his flight from fame to the West, his alcoholism, and his ensuing breakdown. Musically speaking, Farrar and Gibbard's interpretation is lighter than that, even as it pulls various lyrics straight from the text. And while the artists meld well in songs like "There Roads Don’t Move" and "Sea Engines," the overall album feels like the work of two distinct artists.

McKibben's Case for a Climate Treaty

| Fri Oct. 23, 2009 9:19 AM PDT

After yet another climate conference (this time in Bangkok, ending earlier this month) in which world leaders failed to make any headway on the planet's most pressing problem, the prospect of a climate treaty in December, when 192 nations meet in Copenhagen, looks bleaker than an Arctic winter.

Then again, as Mother Jones contributing writer and author Bill McKibben writes in his most recent story, "Copenhagen: Too Hot to Handle," those Arctic winters might not be so bleak after all if our leaders leave climate change unchecked by failing to reach an agreement at Copenhagen. Indeed, the consequences of an unsuccessful Copenhagen conference, as McKibben describes, would be disastrous.

Already the planet is changing before our eyes as a result of climate change. Glaciers are melting at a rapid pace. Dengue fever is spreading to new regions. Drought could turn the American Southwest into a new dust bowl. Climate change even threatens to wipe entire nations, like the Maldives, off the map. Mohamed Nasheed, the Maldives' bold new president, has even started setting aside part of his country's budget to buy a new homeland.

So needless to say, the stakes are high for December's climate conference. McKibben's piece—an absolute must-read for anyone with even the slightest interest in climate change—puts the looming negottiations into context, and offers a clear-eyed assessment about what we, and our leaders, need to do to make a treaty happen—and what we should expect if they don't.

TARP: The Pyrrhic Bailout?

| Wed Oct. 21, 2009 12:42 PM PDT

In his office's most recent quarterly report, Neil Barofsky, the Special Inspector General for TARP, reminds readers of the overall bailout funding at risk in the Treasury's TARP rescue so far—as much as $2.9 trillion, a staggering, unimaginable sum. But the SIGTARP's report doesn't dwell entirely on dollars and cents. Instead, Barofsky focuses on TARP's cost to the federal government's credibility in the eyes of the wary public.

The report, in assessing TARP's effectiveness, begins by saying what most of us already figured—that the bailout went a long way toward stabilizing the economy. It propped up financial institutions that, for good or ill, were integral to the financial markets, and brought "the system back from the brink of collapse." But beyond the financial markets, the report continues, many of TARP's programs have sputtered, including its homeowner relief initiatives (read: the HAMP program), and its effort to remove the threat of ticking-time-bomb toxic assets from the books of financial institutions. In short, TARP has largely succeeded in its chief aim—to avert complete financial meltdown—but struggled elsewhere.

But how pyrrhic was that victory? For one, as the SIGTARP report points out, Wall Street is already reverting back to the over-leveraged, risky, even reckless behaviors that helped bring on the crisis—and the government is egging them on. "The firms that were 'too big to fail' last October are in many cases bigger still, many as a result of Government-supported and -sponsored mergers and acquisitions," the report states. "Absent meaningful regulatory reform, TARP runs the risk of merely re-animating markets that had collapsed under the weight of reckless behavior."

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