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The Spectacle Blog
The Treasury Secretary Timothy Geithner's war against SIGTARP -- Neil Barofsky, special inspector general for the Trouble Assert Relief Program bailout -- continues escalating steadily. Barofsky's estimate that the total cost of TARP could reach more than $23 trillion (that's "trillion," with a "t") was criticized last week by Geithner's spokesman:
The Treasury Department disputed Mr. Barofsky's estimate as "inflated." Treasury spokesman Andrew Williams said Mr. Barofsky's estimate "does not take into account the assets that offset the risk in these programs" and also doesn't reflect "fees and other charges that compensate the U.S. taxpayer for the risks incurred."
Saturday, ABC's Jake Tapper published an interview with the man tasked with watchdogging the bailout cash, who defended his numbers:
"I think that the Treasury Department ought to read the report before they make comments, at least the spokesperson's office," Barofsky said. "Our methodology is laid out in black and white in the report. ... As far as the numbers being inflated, where do you think we got the numbers from? We got it from the Treasury Department, we got it from the Federal Reserve. ... If these numbers are inflated, it's because they inflated them when they put them out in the public, not because of us."
The inspector general defended the numbers outlined in his report, saying that all his team has done is to "gather the 50 programs, put them in one place, and told the American people what the government has said about the maximum of each of these programs."
"Perhaps their criticism is that we dare to do math," he said. He added that his team tried to convince the Treasury that they were wrong, and that recipients should be required to report on how they use the federal funds, and those should be shown to the American people so that they know it's "not being thrown into a black hole."
(Hat-tip: Hot Air; more blog reaction at Memeorandum.) There are important political factors involved in this battle over SIGTARP, which began when Iowa Sen. Chuck Grassley started asking questions about Treasury's attempt to withhold documents from Barofsky's investigators. As I noted earlier, Barofsky's testimony Tuesday before the House Oversight Committee unleashed a bipartisan firestorm about the lack of transparency:
"The taxpayers now have a $700 billion spending program that's being run under the philosophy of 'don't ask, don't tell,' " Rep. Edolphus Towns, (D-N.Y.) said during a hearing on the Troubled Assets Relief Program, or TARP.
Rep. Darrell Issa (R-Calif.) went as far as to compare the Treasury's refusal to provide regular updates on how TARP money is being spent to the way convicted Ponzi scheme mastermind Bernard L. Madoff misled his clients. . . .
The Wall Street bailout has been unpopular from its inception. Sen. John McCain's outspoken support of the bailout was the decisive factor in his landslide defeat in last fall's presidential election. Now, we see unemployment soaring (more than 15% in Michigan, near 12% in California) and consumer confidence falling, while the stock market surges upward. You can't blame people for suspecting that massive taxpayer-funded assistance to financial giants like AIG, Goldman Sachs and Bank of America might have something to do with this widening chasm between prosperity on Wall Street and misery on Main Street.
Saturday, after giving a speech at the "Liberty 101" event in Richmond, Virginia, I had a conversation with a local businesswoman who has owned a travel agency for 24 years. Like many other small business owners in this economy, she's fighting hard just to hang on.
Polls indicate a growing perception that the Obama administration is mismanaging the economy, with special favors for politically connected Wall Street fat cats at the expense of ordinary American taxpayers. When you talk face-to-face with the people like that travel agency owner -- people whose livelihoods are threatened with annihilation by the economic blundering of President Obama, Secretary Geithner and Federal Reserve Chairman Ben Bernanke -- you realize that poll numbers can't begin to capture the pain and anger many people are now feeling.
With another approaching crisis in banking and forecasts that unemployment will continue rising for months to come, Obama will eventually start looking for a scapegoat. Though once hailed as an economic savior, the nominee who was "too big to fail," Geithner is now odds-on favorite to win the Scapegoat Sweepstakes. SIGTARP Barofsky's watchdogging of the bailout "black hole" may be enough to push Geithner across the finish line.
NEIL BAROFSKY: DOCUMENT DUMP
- Copy of SIGTARP Quarterly Report (PDF)
- Text of Barofsky testimony to House Oversight Committee (PDF)
- Text of closing statement by Oversight Chairman Rep. Edolphus Towns (D-N.Y.)
- Press Release From Oversight Ranking Member Rep. Darrell Issa (R-Calif.)
- Text of Issa statement (PDF)
- Sen. Chuck Grassley Pressures Treasury on TARP (July 22)
- Grassley Press Release About SIGTARP (June 18)
- Grassley Letter (PDF) to Secretary Geithner (June 17)
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More Blog Posts by Robert Stacy McCain
http://spectator.org/blog/2009/07/26/sigtarp-neil-barofsky-vs-geith
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JP| 7.26.09 @ 10:42AM
As early as last summer (July 2008), Wall St analysts warned about the destructive Mark to Market accounting rules Congress forced on Wall St firms. M2M forced banks and mortgage comapanies to mark down thier assets based on daily valuations, not the assesed worth of the asset. Even during the Oct-Nov meltdown, when huge losses were piling up on the bank ledgers, and it was apparent that M2M was driving the Wall St crash, Congress still refused to lift M2M. By the time Obama won the Presidency, trillions in "toxic assests" (marked down assests) were on the verge of destroying Wall St. Yet, Congress still refused to lift M2M. Instead, they instituted TARP, and allocated eventually $700 billion for the Treas to buy off all those toxic assets.
Once TARP was safely funded (by borrowed cash), Congress changed the M2M accounting rules, and BINGO!, all of those toxic assests were not so toxic after-all. Today, with assests valued closer to thier true worth, the banks have either changed thier minds and decided not to auction them to Treasury, or will not sell them off at bargin basement prices.
So, what will Obama do with his nearly $1 trillion slush fund? Why did Congress refuse to lift M2M when it was obvious that M2M was like pouring gasoline on a brush fire?
Trackback| 7.26.09 @ 10:45AM
The American Spectator : SIGTARP Neil Barofsky vs. Geithner's 'Black Hole', on PunditKix, links to this page. Here’s an excerpt:
Katherine| 7.26.09 @ 4:58PM
Didn't we do this once already with the S & Ls and junk bonds?
Why do we have to keep doing this particular bit of fiscal insanity?
Katherine
James Raider| 7.26.09 @ 5:02PM
Bernanke, Geithner and their buddies are effectively in charge of taking good care of the largest members of the banking industry. This does not include your pocket book, or your wellbeing. Although Greenspan was vilified, and slapped into anonymity for having completely missed the housing bubble, Bernanke was right there with him promoting almost non-existent interest rates, downplaying obvious dangers of the bloated borrowing, and belittling concerns of inflation.
http://pacificgatepost.blogspot.com/2009/07/bernanke-and-super-fed-say-its-over.html
mad_as_H| 7.26.09 @ 5:51PM
Forget Halliburton - the new player is GOLDMAN SACHS. Look how many people from there have been hired by OBAMA to "run" his enterprises.
And, who has made bundles of money from the misfortune of others? GOLDMAN SACHS!
It's OBAMA'S HALLIBURTON!
Jamie| 7.26.09 @ 6:29PM
Obama is the core of ALL of the corruption. He's the don of the democrat organized crime family.
Old Texican| 7.26.09 @ 7:20PM
Organized crime families are only parasites.
Smart parasites get their drops of blood out of legitimate business...without totally killing those busnesses.
FOLKS..........Obama and crew are not organized crime!
Obama and crew are much more dangerous than that.
(I have dealt with organized crime. You kill their bad boys, they go look for easier targets.)
NO!
Obama and crew are TRAITORS in our midst. Looters at our own campfires. Judas at our own table.
I am now going one step further.
I BELIEVE THEYARE THE EMBODIMENT OF EVIL IN THE WORLD...AT OUR OWN TABLE.
With soft words and lies and smiles, they have suckered a pretty decent nation. "I won" is their motto.
One by one...honest Americans are waking up. The polls prove it.
Soon...there will be an accounting. Most people won't even see it until it is done. Most Americans will be left on the sidelines...nuetral or confused or..."undecided".
In all of history that is how it has worked. I see no difference now.
We shall have the wordy "Liberal Twerps", the grumbling "conservative twerps".....and the hundred million or so Americans who will simply say..."NO!"
Fortunately, we no-sayers are the risk-takers in our country. That was Obama's mis-calculation.
He forgot exactly who his opponents are.
We may lose. (even so Lord, come quickly.)
BUT...in the mean time, we have to act as though the Lord has left it in our hands to create the "right".
God bless us in our efforts.
Jamie| 7.26.09 @ 7:59PM
We need some grumbling Conservatives; we've been suckered for far too long. I remain a skeptic of those who profess to be our leaders.
I want some proof of Conservative bona fides before I vote for a candidate this time.
Jamie| 7.26.09 @ 9:37PM
I am working in a local Tea Party group--that's precisely WHY I am watching our leaders like a hawk. I'm going to hold them accountable this time--you should, too.
Pingback| 7.27.09 @ 12:24AM
Verse-afire » It’s A Long Way To TARPerary links to this page. Here’s an excerpt:
Pingback| 7.27.09 @ 10:34AM
Valerie Jarrett Regards Rezko as “Snake” but Funded Rezmark Housing Projects | Chicag links to this page. Here’s an excerpt:
Pingback| 9.15.09 @ 11:35AM
The Greenroom » Forum Archive » IG-Gate Update: Questions on Capitol Hill links to this page. Here’s an excerpt:
Pingback| 9.24.09 @ 1:38PM
Is this accurate? links to this page. Here’s an excerpt:
Pingback| 10.27.09 @ 5:09AM
Reader's Questions... Where can I find a downloadable copy of Barofsky's July report links to this page. Here’s an excerpt: