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IG-Gate: Connecting the SIGTARP Dots

By Robert Stacy McCain on 7.20.09 @ 7:43PM

The big news on the IG front today was that Neil Barofsky -- SIGTARP, the special inspector general for the Wall Street bailout rushed through Congress last October -- has issued a report accusing Treasury Secretary Timothy Geithner of "rejecting 'common sense' by not requiring banks receiving billions of dollars in government money to say how they are using the money."

The Obama administration's promises of "transparency" are being revealed as lies on the magnitude of "The check's in the mail" and "Sure, I'll respect you tomorrow morning." Avoiding public scrutiny of reckless misappropriation of taxpayer dollars is at least one possible motive for the legislation sponsored by Rep. John Larson (D-Conn.) -- discussed in this morning's American Spectator story about the IG investigations -- that would give President Obama power to fire and replace five IGs at federal financial oversight agencies.

All administrations, Republican and Democrat, have an adversarial relationship with IGs because the job of these watchdogs is to dig up embarrassing mischief with taxapyer dollars that lend themselves to that journalistic classic, the "Your Tax Dollars At Work" story. But big-spending liberal Democrats have more to fear:

The Democrats just want to shovel money out the door and don't care who gets it, except to be sure their well-connected friends get their share.
According to the liberal neo-Keynesian economic gospel, as long as the federal government does X-billion dollars of deficit spending, that will produce X-plus-Y amount of stimulus value (where Y = Magic Government Spending Multiplier Effect) without regard to whether the money ends up feeding orphans or supplying the mistresses of Goldman Sachs executives with bustiers and garter belts.
Unfortunately for liberals, the stupid taxpayers can never seem to comprehend the nuances of neo-Keynesian theory the way Nobel Prize-winning genius Paul Krugman does.
No matter how many times they're lectured about this "stimulus"/bailout brilliance, the idiots who pay the taxes get a little miffed to discover that their great-grandchildren's future has been hocked to pay for new wallpaper and wainscoting in the executive lavatory of a giant banking conglomerate which -- as every expert in Washington explained last fall -- was so frantically in need of cash that the branch managers were sending tellers to sell plasma to the blood bank, merely to prevent a complete catastrophic meltdown in the global finance system. . . .

You can read the whole thing. Meanwhile, it is estimated that the total cost of Obama's bailout agenda could run as high as $23 trillion. (That's "trillion" with a "t.") An effort to muzzle the watchdogs at such a time, given the scandals surrounding certain prominent Democrats, inevitably arouses suspicions among those familiar with "The Chicago Way."