How’s the bailout going? U.S. panel issues reality check

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The watchdog panel named to oversee the financial-system rescue issued its six-month progress report on Tuesday, calling results of the Treasury’s efforts ‘mixed.’

And the five-member panel couldn’t even agree on that conclusion: The vote was 3-2 to adopt and issue the report.

The Congressional Oversight Panel, chaired by Harvard University Prof. Elizabeth Warren, said the report aimed to ‘return the panel’s inquiry to a central question raised in its first report: What is Treasury’s strategy?’

And if the current multi-trillion-dollar rescue program doesn’t work, then what?

‘While there is disagreement among panel members about whether it is appropriate to present alternatives to Treasury’s strategy at this time, this report also examines potential policy alternatives available to Treasury, in the event such alternatives become necessary,’ the panel says in its executive summary.

Reviewing other government-led financial rescues back to the Great Depression, the report says it’s crucial for policymakers to wield an axe when necessary -- including at bankers’ heads. It calls for ‘an assertive government response to failing financial institutions and a willingness to hold management accountable, including replacement of key officials when necessary.’

The report also stresses that ‘clear, consistent communications to the public of the government’s goals, strategy and progress in achieving its objectives -- expressed in terms the broad public can understand -- will continue to be critical to sustained support for the current efforts from American taxpayers.’

Dissenters John E. Sununu and Rep. Jeb Hensarling issued their own views in a separate section of the report.

The full report is available here.

-- Tom Petruno