From the opening of this latest book on the government’s (mis)handling of the 2008-09 financial crisis, Neil Barofsky establishes his populist narrative from his two-plus years as the “TARP cop” overseeing the US$700 billion big-bank bailout officially known as the Troubled Asset Relief Program.
Barofsky, a former New York City prosecutor, is the idealistic alien sent in an emergency to Planet Washington, where he does battle with the self-important, self-serving powers entrenched there or simply taking a spin through its revolving door to Wall Street. He is SIGTARP (in Washington-speak, the Special Inspector General for TARP). But ultimately he is outmatched, and evil triumphs over good.
In the preface to Bailout: An Inside Account of How Washington Abandoned Main Street While Rescuing Wall Street, it is April 2010, and after more than a year on the job, Barofsky is meeting for a clear-the-air drink with one of his nemeses, Herbert Allison, the former head of the financial giants Merrill Lynch, TIAA-CREF and Fannie Mae, who came out of retirement to run the bank-rescue program for the Treasury Department. Barofsky, wearing an unseasonal wool suit at odds with a “Washington-appropriate wardrobe,” is poised to let the hostess seat them at a front table of her choosing, but Allison insists on a private table in the rear. Then he gets down to business.
“Have you thought at all about what you’ll be doing next?” Allison asks Barofsky, soon adding, “Out there in the market, there are consequences for some of the things that you’re saying and the way that you’re saying them.”
“Allison was essentially threatening me with lifelong unemployment,” Barofsky concludes, and alternatively suggesting a plum government appointment some day if Barofsky would simply “change your tone.”
When Barofsky tells his deputy of the exchange, the deputy says, “It was the gold or the lead,” resorting to the lingo of their joint experience prosecuting Latin American drug kingpins in New York: Cooperate and share the riches, or don’t and get plugged. (With such frequent asides between the two buddies, Barofsky seeks to lighten what is by definition his otherwise numbingly complicated subject.)
Yet Barofsky goes on to say that he did not really think that Allison was threatening him; in fact, Allison “was, in a very Washington way, sincerely trying to be helpful.” This introductory episode not only sets the book’s tone, but it also embodies the contradictions and inconsistencies throughout Barofsky’s account.
He writes early on that “I had no idea that the US government had been captured by the banks,” and at another point describes his strategy to use the press to get the attention of Congress, and by extension an obstreperous Treasury: “Our message was simple: Treasury’s desperate attempt to bail out Wall Street was setting the country up for potentially catastrophic losses.”
Yet despite such repeated condemnations of the decision-making process in both the Bush and Obama administrations, Barofsky never really concedes that the predicted losses did not occur.
He refers throughout to the US$700 billion bailout, never clarifying that less than US$300 billion of that amount went out the door by the time TARP expired; that not a penny went to banks during the Obama administration; and that the big banks repaid taxpayers with interest.
As ugly and flawed as the rescue process was, and as galling as Wall Street’s revived bravado and bonuses can be to most Americans, the fact remains that an economic collapse was averted, and that Main Street is recovering: slowly, but typically so for recessions brought on by credit crises. As Europe’s crisis persists for a fourth year, commentators around the globe have suggested that the Continent should have followed America’s example.
To the extent that Barofsky acknowledges that neither big losses nor big fraud cases occurred, he credits the anti-fraud measures he pressed Treasury to include in programs and contracts. Yet his book is a chronicle of complaints that Treasury undercut, blindsided and ignored him. Perhaps the biggest criticism of Treasury Secretary Timothy F. Geithner suggested by Barofsky’s account is that Geithner should have been a lot more conciliatory toward this zealous inspector general, if only to avoid becoming the biggest villain in Barofsky’s morality tale.
Geithner does not fully enter the story until its midpoint. The headline grabber is a recounting of an October 2009 meeting at which Geithner erupts when Barofsky tells him that TARP’s unpopularity and the public’s perception of Treasury as subservient to big banks is because of Geithner’s lack of transparency about the department’s dealings.
“‘Neil, I have been the most [expletive] transparent secretary of the Treasury in this country’s entire [expletive] history!’ he boomed, moving forward in his chair. ‘No one has ever made the banks disclose the type of [expletive] that I made them disclose after the stress tests. No one!”’
(While Barofsky pointedly describes the Wall Street background of every Washington player who has one, he never notes that Geithner does not fit the theme, having served in the public sector, starting at Treasury a quarter-century ago, despite lucrative offers during the Street’s boom years.)
Barofsky’s book adds little of substance to the mini-library on the worst financial crisis since the Depression, which includes In Fed We Trust, by David Wessel of The Wall Street Journal; Too Big to Fail, by Andrew Ross Sorkin of The New York Times; and another insider account, On the Brink, by Henry M. Paulson Jr., Treasury secretary in the Bush administration.
Barofsky the ex-prosecutor talks of fighting fraud and “Wall Street criminals” and styles his office as a law enforcement agency, complete with guns and badges. Yet the reader should not expect Eliot Ness. Within a week of starting work in December 2008, Barofsky has fights that are mainly of the bureaucratic type as old as Washington. He grouses for page after page about being left out of the loop as arcane policies are developed, consigned to a basement office that literally stinks. What scofflaws he takes credit for helping to nab are far from Wall Street: an Alabama-based bank, a Tennessee man with a US$10 million Ponzi scheme, a San Diego mortgage telemarketer.
Barofsky, now a senior fellow at New York University School of Law, does a good job of describing the complex financial products at the core of the crisis. And he does open windows into how Washington works, though not always those he intended.
For instance, like so many actors in the capital, Barofsky develops backdoor relationships with the offices of friendly Republican lawmakers like Senator Charles E. Grassley of Iowa and Representative Darrell Issa of California, leaking information back and forth to shape news coverage. Then he wonders why Treasury keeps him in the dark?
Barofsky justifiably spends time on Treasury’s failure to get banks to stem home foreclosures. But he charges that Treasury helped give birth to the Tea Party “by rolling out a hurried and poorly thought-out mortgage modification program,” when what actually spawned that movement was conservatives’ opposition to the very idea of bailing out troubled homeowners, which Barofsky so favors.
That his book is being released now, amid the presidential campaign, reflects perhaps the biggest contradiction of all: If Treasury has been making policies exclusively “by Wall Street for Wall Street,” as Barofsky says, why then has a once friendly Wall Street turned so hostile to President Barack Obama’s re-election?
March 24 to March 30 When Yang Bing-yi (楊秉彝) needed a name for his new cooking oil shop in 1958, he first thought of honoring his previous employer, Heng Tai Fung (恆泰豐). The owner, Wang Yi-fu (王伊夫), had taken care of him over the previous 10 years, shortly after the native of Shanxi Province arrived in Taiwan in 1948 as a penniless 21 year old. His oil supplier was called Din Mei (鼎美), so he simply combined the names. Over the next decade, Yang and his wife Lai Pen-mei (賴盆妹) built up a booming business delivering oil to shops and
Indigenous Truku doctor Yuci (Bokeh Kosang), who resents his father for forcing him to learn their traditional way of life, clashes head to head in this film with his younger brother Siring (Umin Boya), who just wants to live off the land like his ancestors did. Hunter Brothers (獵人兄弟) opens with Yuci as the man of the hour as the village celebrates him getting into medical school, but then his father (Nolay Piho) wakes the brothers up in the middle of the night to go hunting. Siring is eager, but Yuci isn’t. Their mother (Ibix Buyang) begs her husband to let
The Taipei Times last week reported that the Control Yuan said it had been “left with no choice” but to ask the Constitutional Court to rule on the constitutionality of the central government budget, which left it without a budget. Lost in the outrage over the cuts to defense and to the Constitutional Court were the cuts to the Control Yuan, whose operating budget was slashed by 96 percent. It is unable even to pay its utility bills, and in the press conference it convened on the issue, said that its department directors were paying out of pocket for gasoline
For the past century, Changhua has existed in Taichung’s shadow. These days, Changhua City has a population of 223,000, compared to well over two million for the urban core of Taichung. For most of the 1684-1895 period, when Taiwan belonged to the Qing Empire, the position was reversed. Changhua County covered much of what’s now Taichung and even part of modern-day Miaoli County. This prominence is why the county seat has one of Taiwan’s most impressive Confucius temples (founded in 1726) and appeals strongly to history enthusiasts. This article looks at a trio of shrines in Changhua City that few sightseers visit.
RSS