How The Banks Run The Treasury

[Lucky]

“I had no idea that the U.S. government had been captured by the banks,”

So says the man appointed to watch over the US bailout- the Special Inspector general for TARP, Neil Barofsky. Barofsky has written a book about his experience, and he is not kind to Treasurer Timothy Geithner. (NYTimes)

Treasury Secretary Timothy Geithner said he is "deeply offended" by an assertion in a new book that he is too cozy with some of the country's biggest financial institutions and mishandled the $700 billion Troubled Asset Relief Program bailout fund.

Barofsky argues in his book that TARP was supposed to be a program that was to help Main Street and bolster the economy but was ultimately hijacked by the interests of Wall Street.

As President Obama aides designed the financial rescue plan early in the administration, Geithner opposed imposing tough conditions on financial institutions that received bailout funds.

Barofsky charges that Geithner oversaw and shaped a policy that saw the nation's largest banks get bigger and even more powerful. (USA Today)

“Helping banks, not home owners, did in fact seem to be Treasury’s biggest concern,” Barofsky writes in “Bailout: An Inside Account of How Washington Abandoned Main Street While Rescuing Wall Street.” (Politico)

"Prior to coming to Washington to head SIGTARP, Barofsky was a highly regarded prosecutor in the Southern District of New York, where he built big cases against FARC drug traffickers in Colombia and mortgage fraudsters at home. His diligence in pursuing the latter scofflaws put him on the radar of the Bush administration when it came time to establish SIGTARP, an appointment that came despite the fact that Barofsky was a lifelong Democrat and an Obama supporter." (Huffington Post)

Huffington Post's Jason Linkins summarizes the highlights of the book:

IN WASHINGTON, IT IS JUST ASSUMED THAT YOU ASPIRE TO BE A SELL-OUT

IN WASHINGTON, EVERYONE IS OBSESSED WITH THEIR PERKS

WHEN WASHINGTON BUREAUCRATS LEARN OF A WELL-FUNDED OFFICE, THEY START ANGLING FOR THAT CASH

MOST REGULATORS VIEW SUCCESS AS "GETTING ALONG TO GO ALONG"

ON THE OTHER HAND, REGULATORS WHO PURSUE OVERSIGHT WITH DOGGED DETERMINATION ARE DISDAINED

WASHINGTON'S MAIN PASTIME IS USING THE MEDIA TO 'RUIN PEOPLE FOR SPORT'

IN WASHINGTON, THE BIGGEST COCK-UPS NATURALLY BELIEVE THAT THEY ARE QUALIFIED TO FIX THE MESSES THEY CREATED

IN WASHINGTON, REGULATORY CAPTURE IS SEEN AS A CARDINAL VIRTUE

IN WASHINGTON, HIGH-RANKING OFFICIALS ARE TREATED AS DEMIGODS

IN WASHINGTON, THE FIRST RESPONSE TO UNPOPULAR INITIATIVES IS TO 'REBRAND' THEM

IN WASHINGTON, THE SORT OF GOSSIPY BULLSHIT YOU THOUGHT YOU LEFT BEHIND WHEN YOU GRADUATED FROM HIGH SCHOOL IS COMMONPLACE

... AND ON A LONG ENOUGH TIMELINE, EVERYONE IN WASHINGTON EVENTUALLY BECOMES A LITTLE BIT DESPICABLE

Linkins elaborates on these points: http://www.huffingto..._n_1702751.html

[TampaYankee]

Both Geitner and Summers were Obama's biggest fails. I agree with the thrust of the above. These guys were clearly looking out for the banks rather than Main St. I'm sympathetic that we cannot kill the banks. They are essential to the mechanism of a modern economy. But they should have been broken up and Glass-Steagle reimposed. Not treated with a band-aid and allowed to grow even bigger. These guys also screwed up the housing and morgage market recovery by funneling money to the banks without imposing write-downs and selling off of troubled mortgage assets.

Dodd also gets a full share of blame too. They were all 'on the take' in one way or another, contemporaneously or for future consideration. Barney Frank deserves some blame too but less as I believe he saw more clearly the real problems and tried to get as much done as he could , swimming up-stream as he was. He should have blown the whistle. I won't even go into the GOP intransigence, insisting that nothing was wrong but TARP itself, in any form.

Obama was really out of his depth in that crisis and sold a bill of goods that these guys were the fixers. Well, they were but the fix was in on us.

And not a single criminal prosecution of big wigs for what is blatant theft of hundreds of millions of dollars. I suspect Geitner and Summers mutter under their breath "there but for the grace of God go I". They could have been sitting at those CEO desks just as easily in another moment.