A Busy Week in the Newsroom
For connoisseurs of news and politics, the flurry of activity this week has been thrilling. There have been assassinations in Iran, countries in the EU going bankrupt, and another little scandal brought on by a website called Wikileaks.org. Over the last day and a half, the US has also willingly revealed some rather embarrassing information about the actions of the Federal Reserve Bank over the last few years.
On Wednesday the Federal Reserve revealed new information about the recipients of the money given in 2008 and 2009 in order to bail out businesses and banks under TARP (Troubled Asset Relief Program). The information also indicated dollar amounts the bank has given. According to The Washington Post, the Fed essentially loaned GE $16 billion, Harley Davidson $2.3 billion, and Verizon $1.5 billion. None of this was publicly known prior to Wednesday’s announcement. This new information is serious and troubling, as partly indicated by its placement on the front page of many newspapers and top-red status on the Drudgereport.
This federal candor brings to the surface some serious questions. Why would the government choose to release such scandalous information at this time, when they are already embarrassed by the current leak of information? Further, what do they stand to gain through this level of disclosure? Finally, how could government funds allocated to some of the largest companies in the US, totaling $3.3 trillion go unnoticed by any of the nation’s news outlets until now, and what does that mean about the state of American journalism?
Candor in the Fed
Time almost always clarifies questions such as these, but at this moment Wikileaks appears to be more the impetus behind this Fed announcement than merely tangential to it. Wikileaks has been a constant thorn in the side of the US government over the past several years, as it has revealed increasingly damaging and embarrassing classified information about the government’s secret activities. This week, they began publishing 251,287 classified US diplomatic cables on their website. While this document dump is possibly less damaging than some previous leaks, it is very embarrassing for the US.
But what appears to be even more significant is the website’s claim to be on the verge of releasing information on “a major bank that is still in existence,” according to a Reuters report. Wikileaks founder, Julian Assange has declined to announce the name of this bank. So people are guessing. Prognosticators are placing their money on Bank of America. They might be wrong.
Of course there could be other reasons for The Fed’s recent disclosure, but it appears likely that they are assuming that the next Wikileaks disclosure (set for January) will target the Federal Reserve Bank itself. This would make sense. In order to stay relevant, Wikileaks is under pressure to have increasingly major leaks to share. It is not clear what vendetta the site has against the United States (if it is not simply about freedom of information—which seems doubtful), but it is clear that the site is focused more on government actions than it is on business corruption. Sharing secret bank documents would be somewhat out of the site’s typical MO.
If the Fed assumes that the next leak is to be about them (whether it actually is or not), it would make sense for them to dump this information while there is already so much political embarrassment on the table. The chances that the banking information will get lost in the glut of news are much greater, and it takes away power from Wikileaks disclosures, lessening the impact. If the Fed is wrong on this guess, they will be playing into Assange’s strategy quite nicely, however. The Fed must assume that this information cannot be hidden forever, and now could be as good a time as any to release it while it must compete for front page status.
A Blind Press
One question that doesn’t appear to be answerable at the moment is, how in the world did the entire US free press miss $3.3 trillion in unreported aid sent to major American businesses? That much money does not get hidden very easily, even in an economy the size of the United States. One might understand how money sent to GE, which owns NBC and affiliated news outlets, might have suppressed this inside their newsrooms, but how the news could have escaped every competing outlet and the blogosphere is simply astounding. Perhaps the American free press should be more embarrassed about this disclosure than the Federal Reserve Bank and the US government.
Many answers to these riddles will have to wait until after January. But the American public should expect more self-disclosures by the US, and possibly American banks, and further world tension involving Wikileaks. December and January should be quite exciting. -Ryan