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“Bailout” author Neil Barofsky on his experience as the Inspector General of TARP.
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Well my next guest says the 2008.
Bailout failed to enact effective financial regulation -- could put the country in danger of even bigger problems.
In the months and years ahead joining me now former TARP inspector general bill brought me.
And his brand new book is bailout as you see there.
And inside account of how Washington abandoned main street while rescuing.
Wall Street -- and it would thanks for having -- this is.
It's a terrific book and I in anywhere in the disinterested in the relationship.
Between markets.
The major players in those markets and regulators from the government.
It's a fascinating well -- story I wanna congratulate you.
Let's begin with.
-- the fact that I know I wanna say this at the outset.
-- as a Democrat he was a Republican appointee.
-- it to take over this job.
In you you went to battle -- Democrats and Republicans alike on Capitol Hill allies in the White House in the executive.
And you've emerge from -- Let's find out right now how -- How would you describe where you are now.
And I had a little bit more hair and I got to Washington perhaps.
And -- if you if you -- wrinkles but.
But look I was very grateful for my Tynan and to get the opportunity to serve a -- serve your country at such an important time.
Was a blessing for -- as federal prosecutor for eight years where -- went to Washington and highly successful one you're too modest and say that.
But a highly successful prosecutors -- from -- is -- is a great opportunity.
Although what I did see was very disturbing.
And you know Democrat Republican.
It really didn't fundamentally matter when -- came to the influence of the large banks had over their own bail out I'm over Washington over our economy.
Which so often officials putting their interest but have ahead of everyone else's in almost a matter what party -- -- An issue so vividly.
You write in your -- The fact that this the banking industry itself in desperate trouble save.
What are two of the largest -- desperate trouble.
No conditions.
Put forth for the money that they receive -- -- sent.
Mike what it was an injection of capital.
At risk only to the taxpayer and not the banks or any consequence seemingly.
To the federal government it was it's a remarkable stories.
In mean it was in when I got down there my job was to protect the taxpayers' interest so.
I started asking for conditions.
Are intact brought provisions and the most basic thing of all you would think which is just basic transparency.
What happens in the money where did it go.
And I just I ran into a brick wall there's no other way to describe I was told that my suggestions were stupid.
Of that I was playing politics.
Secretary Geithner eventually curse me out -- for suggesting that the lack of transparency was -- the government.
And the response I got were really disturbing it was this incredible deference I was told that.
We didn't need to have taxpayer protections because we could trust the banks that they would never risk their reputations as -- -- -- heard over and over again.
I putting the interest of their own profit over that of attacks and of the government mean it was a remarkable things that are.
I am I'm amused.
That Timothy Geithner Treasury Secretary says he's deeply offended by the charges -- your -- Particularly that is -- banks you run into a lot of deeply offended you're in your book you talk about her -- outside.
Being deeply offended -- -- It's there are almost a running gag in the book that whenever treasury official didn't like an argument or something they would tell me how deeply offended they Wear.
So is almost perfect -- and secretary Geithner is reaction to the book was to pull that that sort of fake outrage that also sadness.
-- his response.
As you make clear.
The people who should be outrage of the people watching and listening -- right now.
-- we have a housing market that was.
On its back it has -- in many cases on its knees for the last four years.
Yet the government did not move to help literally what at that point.
TARP were talking about a million foreclosures.
Basically a million foreclosures the average price of -- house at that point median price of house.
About 206000.
Dollars or 200 billion with the -- all the foreclosures perhaps.
Perhaps or more saying perhaps.
Provided some support and help to homeowners -- could've avoided much of what ensued rather than.
Taking on these massive banks and propping them.
And it was even worse that because when people need to understand.
Was that this was a choice of where we are now I'm in the grips of an ongoing foreclosure crisis was he conscious -- -- decision by our government.
-- we confronted secretary Geithner on this on this housing program that was supposed to help millions and millions of people stand there comes.
In his response when when pressed on the failure of the program was to defend it and explain that it was all about in his words.
-- the runway for the banks this is the one program in TARP was actually supposed to help main street instead of Wall Street.
But we found out that day.
They really wasn't about that it was about supporting the banks helping to give any soft landing right.
Right on and by extending out the foreclosure crisis so everything we see that's happening today the sluggish recovery that's really one in name only.
You directly goes back to those decisions.
On any of the phone was really the wreckage of the homes and bodies of of homeowners would needlessly foreclosed on costs out of their homes.
Because of decisions and choices made by the government.
And the overall street plays out those choices the the currents that run throughout economic.
All political.
Of the backgrounds of each of the if you will -- and major players in this.
Sometimes tragic -- drama sometimes -- comic.
Is politics confidence.
It's a terrific read -- -- through the book is bailout we thank you for being here come back soon.
And hopefully we will not be the benefit of your experience further in terms of bailouts in this country.
I've got to conclude with one question because we have had the spectacle.
We've had the spectacle of senator while the -- created.
The massive.
Citigroup.
Structure say it's time to break up the banks what say you.
-- -- I never thought I'd actually say the words -- I agree with Sandy -- I'm but on this on this occasion.
You look at the incentives that are built into our financial system.
A lot of it comes from the government implicit guarantee resumption about that still very much alive and well.
Was caused him in part by the way the bailout was run -- with bigger banks bigger problems.
-- -- again the book is.
Bailout thanks for being here.
