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
