Would greater transparency have helped stave off the current financial crisis? There's more and more evidence that it might have, and more and more voices calling for a new approach moving forward.
Journalists have an opportunity, right now, to ask questions we need answered -- and they should be asking again and again, and again. Taxpayers (or rather our children and grandchildren, who'll pay for this) are forking over $700 billion to bail out financial institutions, the first installment of trillions we're collectively spending to try to save American capitalism itself. Yet we aren't allowed to know how the money is being spent. This isn't merely opaque; it's the blackest of boxes, and occasional queries from journalists aren't helping to make it transparent. Congress is the most culpable party in this case; as usual, lawmakers have dodged their responsibility, but an insistent journalistic campaign wouldn't hurt and might actually help dislodge some facts.
Once upon a time, news people went on campaigns when they saw the need. Sometimes this led to yellow journalism, as when newspaper owners used their publications to stir up the populace in dangerous ways. At other times, however, old-fashioned press campaigns led to change for the better; back when editorial pages had more influence in communities, a few courageous newspaper editors in the South campaigned for school integration, and made an enormous difference.
Journalistic activism -- precisely what we need despite most journalists' disdain for the idea -- won't save newspapers that are suffering from a perfect storm of dwindling leadership and advertising losses. But as Online Journalism Review's Robert Niles recently wrote, journalists should "accept the responsibility to demand action" based on what they learn when they do their jobs right.
Transparency International -- the world's most-respected anti-corruption NGO -- goes farther, saying that at its very root, the financial crisis is "a betrayal of the public trust," and arguing that the very first steps taken ought to be about ripping open closed doors and restoring public oversight to public money:
1) Regulation and supervision: Secure greater transparency and public accountability in order to restore public trust and adopt a far more consistent and internationally coordinated framework for regulation and supervision of all financial institutions.
2) Rescue measures: Ensure effective safeguards with transparency and accountability at the forefront, in all aspects of public management of taxpayers’ funds, in support of efforts to restore the sound functioning of financial institutions and markets.
3) Offshore havens: Halt evasion of all tax and financial regulations and the facilitation of illicit activities through use of “offshore havens” and ensure that these centres cooperate fully with other national and international authorities on the exchange of information.
4) Governance: Build strong corporate governance, including board accountability, with emphasis on executive compensation, risk management and disclosure on financial products.
5) Conflicts of Interest: Take measures to prevent conflicts of interest in the activities of credit rating agencies, auditing firms, and in relationships between financial firms and the public sector.
6) Investigations and Sanctions: Pursue appropriate criminal investigations in compliance with existing laws and regulations, and impose strong sanctions where corruption, insider trading and other abuses are found.
7) Aid: Take urgent action to address rising global poverty resulting from the current crisis by increasing official development assistance, with particular emphasis on those in greatest need and with the necessary accountability mechanisms.
Any bright green future will, of necessity be a far more transparent future. Openness is a quality of resilience and sustainability.
I agree, and would add accountability to the list. I was just reading a piece by Zarah Patriana on Change.org's blog network. Patriana had this to say about transparency:
I was listening to Jim Hightower the other morning and he was discussing how Wall Street is refusing to tell the public exactly how they're spending "the billions of dollars Washington has thrown them". JPMorgan, we gave you $25 million dollars. What are you doing with it?
"We have not disclosed that to the public. We’re declining to."
Morgan Stanley. You walked away with $10 billion. Where's it going?
"We’re going to decline to comment."
Sun Trust Banks. You snagged $3.5 billion from the bailout. What next? Disneyland? Resort Vacation, AIG-Exec style?
"We’re not providing dollar-in, dollar-out tracking."
I think it would be worthwhile to make every government action from now on more transparent, and to go back and shine some light on the past as well. (Not because we should dwell on it, but because it will no doubt affect the future.) But who will make sure people who receive government funds, for example, remain accountable to transparency? Are online tools like SourceWatch good enough, or would we want something more formal, something like a Department of Transparency?
One potential benefit of nationalization: the Freedom of Information Act could apply to bank activities (of the organization, not individuals of course). Wouldn't that be great?