An Inside Account of How Washington Abandoned Main Street While Rescuing Wall Street
From the Special Inspector General charged first by the Bush administration and then by the Obama administration with oversight of the TARP bailouts a bracing, news-making account of his tow-and-a-half years fighting to assure the money helped Main Street and not only Wall Street. The book is an irrefutable indictment of the handling of the bailouts and offers rare inside proof of the extreme degree to which the US government officials serve the interests of Wall Street firms at the expense of the broader public.
He recounts in lively blow-by-blow how Hank Paulson’s team at Treasury worked aggressively against his efforts to hold the banks accountable for how they were spending the money and against significant proposals to put in place protections against fraud and crime. His high hopes for a dramatic change of pace once the Obama administration takes over are immediately dashed as Geithner, now the Treasury Secretary, and his new team express even stronger hostility towards many of his proposals for ways to make the banks accountable and to guard against fraud. As he launches investigations into how the bailout money is being spent he discovers that an appalling Wall Street friendly double-standard is being applied.
As Barofsky issues a series of hard-hitting reports about these failures, and a series of misleading claims made by Geithner’s team about the success of the bailouts, and testifies to Congress about them, a battle is waged against him by the Treasury team, which tries to get his office –set up by Congress as an entirely independent agency -- put under Geithner’s authority, and begins to make a series of disparaging accusations about him to the press, revealing the methods by which warfare is waged in Washington. Ultimately the White House itself engages in this campaign, even as the Obama team refuses to hold Geithner accountable for the failures of his department to effectively stop either fraud against homeowners or abuses by the banks, with the massive wave of foreclosures continuing.
The book ends with Barofsky’s resignation from the position, having concluded that he could no longer effectively exercise any positive influence over the bailouts or reform of the banking system, and that the most important contribution he could make would be to tell this deeply troubling story of the corruption and dysfunction in Washington that he had a unique perspective on.
Neil Barofsky is currently a Senior Fellow/adjunct professor at NYU Law School. From December 2008 until March 2011, he was the Special Inspector General in charge of oversight of the Troubled Asset Relief Program (TARP). Before that he was an Assistant U.S. Attorney for the Southern District of New York. This is his first book.