Mrs Smith Reads Bailout: An Inside Account of How Washington Abandoned Main Street While Rescuing Wall Street, #CBR5, Review #4

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Remember TARP? The Auto Bailouts? Neil Barofsky has written an enlightening book about his time as a presidentially-appointed and congressionally-approved Special Inspector General for the TARP program. Told that he was to work “independently” within the Treasury Department to root out potential for fraud and malfeasance within the TARP program and the receiving banks, Barofsky received a veritable baptism of fire in the first weeks of his appointment as he quickly ascertained that no one in Washington is truly an independent investigator and the only way to keep a job in DC is to keep quiet, not ruffle any feathers and by no means ever actually produce any documented work that is openly critical of anyone. Ever.

Luckily for us, Barofsky decided his next job wasn’t as important as the one he had just been assigned to do and his account of the 19 months he toiled as head of SIGTARP gives readers an insightful narrative into the incredible machinations, contrivances and outright duplicity the Treasury Department—lead first by Hank Paulson, then Timothy Geithner—got up to in their efforts to convince American taxpayers that giving massive bailout funds to the banks with almost no oversight as to how those funds would be used, was the best, most honest way to improve the economy.

“The further we dug into the way TARP was being administered, the more obvious it became that Treasury applied a consistent double standard. In the late fall of 2009, as I began receiving the results of two of our most important audits, the contradiction couldn’t have been more glaring. When providing the largest financial institutions with bailout money, Treasury made almost no effort to hold them accountable, and the bounteous terms delivered by the government seemed to border on being corrupt. For those institutions, no effort was spared, with government officials often defending their generosity by kneeling at the altar of the “sanctity of contracts.” Meanwhile, an entirely different set of rules applied for home-owners and businesses that were most assuredly small enough to fail.”—Neil Barofsky in Bailout

Mrs Smith Reads Bailout by Neil Barofsky