Today in "the government is an awful capital allocator" news, trillions of dollars in stimulus money has apparently been doled out with little to no oversight. At the same time, politicians on both sides of the aisle are scrambling to establish order in the form of various oversight panels and inspectors general, according to Bloomberg.
In fact, it was found that some of the oversight bodies responsible for tracking the money are "barely functional". This comes after $2 trillion in stimulus cash has been doled out. Many, including Peter Schiff, predicted months ago that printing and distributing such a vast amount of money would inevitably lead to fraud and misuse due to the government's inability to track the money.
Now that's exactly what's taking place. Meanwhile, a special inspector general, Brian Miller, has only been sworn in recently and is already facing questions from Democrats about his ability to be independent.
Senator Elizabeth Warren noted that funds are already going to the wrong place: “We’ve seen giant public companies scoop up relief meant for small businesses, an inspector general fired, promises made to muzzle independent oversight.”
Sherrod Brown of Ohio called Miller "evasive" and "unwilling to condemn" Trump for removing other agency inspectors general ahead of the stimulus being sent out.
Miller is tasked with trying to prove to both sides of the aisle that he can be independent, fair and a person of consequence when he releases his first report, which is due in August.
Neil Barofsky, the first special inspector general who oversaw TARP, said: “Your first report is to amplify what you’ve found. That really defined what we would be. There is always going to be tension between a good IG and the agency.”
But some business leaders are worried that the "oversight" is going to turn into a political sideshow (as everything tends to do). Neil Bradley, chief policy officer at the Chamber of Commerce said: “There’s already growing concern that congressional oversight will in part focus on companies or sectors that various elected officials will view as unworthy of assistance, irrespective of whether they qualify under the terms of the programs in question.”
At the same time, Nancy Pelosi and Mitch McConnell have been unable to agree on a chairman for the Congressional Oversight Commission, which is designed to be a bi-partisan entity. The commission has produced one report so far and has another due on Wednesday.
A similar panel in 2008 took months to assemble. Kenneth Troske, a member of the panel led by Warren before she became a senator said: “There is no such thing as nonpartisan. It’s an inherent challenge of that type of work.”
Another panel, the Pandemic Response Accountability Committee, saw its head Glenn Fine ousted by Trump in April. It was the first of five dismissals of inspectors general that Trump made.
Cynthia Schnedar, who has served as deputy inspector general and acting inspector general at the Justice Department said: “I don’t think the firings are going to scare most IGs. They will do their jobs, but he can pick them off one by one.”
The panel reported last Wednesday that there was "grant fraud" that included the Paycheck Protection Program loans.
“Increased loan volume, loan amounts, and expedited loan processing time frames may make it more difficult for SBA to identify red flags in loan applications,” the report said.
We'd make a joke about this being your tax dollars at work, but tax revenue no longer matters. This is the Fed's money printing funding big government at work. And as we can see, two wrongs don't make a right.