1. The Obama TARP fiasco Romney can’t use:
If the dynamics of the presidential campaign were different, a book called Bailout by Neil Barofsky would be getting a lot more attention. Barofsky left a post in late 2008 as a top federal financial fraud prosecutor in New York to become the special inspector general overseeing the $700 billion TARP bailout program. He’s written a Mr. Smith-Goes-to-Washington-like account of how even after TARP was turned over to a Democratic administration – in fact more so after the Democrats took over – TARP money was dispensed and TARP rules were written almost completely for the benefit of the bankers who drove America into a ditch.
For example, there’s Barofsky’s blow-by-blow description of how the rules written by the Obama administration for its much-heralded $50 billion program to help homeowners whose mortgages were underwater were so tilted in favor of the banks and against homeowners actually being able to get relief that only $1.4 billion of the $50 billion was dispensed, with few homeowners getting any help. And Barofsky is not writing about compromises the Obama administration had to make with banker-sympathetic Republicans in Congress; this is all about internal decisions that unfailingly seemed to put the needs and mindset of Wall Street above those of Main Street consumers.
A presidential campaign that wanted to call out the Obama administration for being too friendly to Wall Street and the banks at the expense of Main Street would be using Bailout as the cheat sheet that keeps on giving. But with the Romney campaign’s attack coming from the opposite direction – that the president and his team have killed the economy by shackling Wall Street – and with Romney on record in favor of allowing the mortgage crisis to “bottom out” with no government intervention, the former Massachusetts governor and his team have no use for Bailout.
That doesn’t mean reporters covering Wall Street and financial regulation shouldn’t be digging in, if not now, then after the voting. I want to read a story challenging officials, such as Treasury Secretary Timothy Geithner, to offer their response to Barofsky’s detailed and convincing indictment.
Did Geithner really refuse repeatedly to meet with Barofsky and try time and again to torpedo his investigations into fraud at TARP or his efforts to write rules that would prevent fraud? Did the Obama White House and the Treasury Department really argue to Barofsky that implementing what seem to me to be commonsense reporting and auditing rules for those accepting TARP money would scare off the banks from taking these handouts?