in which, according to CNN Money, the SIGTARP said that "officials painted an overly rosy picture, creating 'unrealistic expectations' when they called the first bailout banks 'healthy' institutions that would be able to lend more with government help."
What an understatement. As I discussed earlier, Bernanke and Paulson intentionally mislead the American Public regarding the true financial conditions of the banks, preferring to shore up a failed system rather than allow banks to come clean about the nature of their assets and allow individuals to protect themselves. They are criminals who strong-armed and colluded with banks to conceal the truth in violation of the securities laws. Now, adding insult to injury, the Fed continues to fight a court disclosure order, with the "You can't handle the truth!" argument.
The SIGTARP Report concludes with the following statement:
It is apparent … that senior government officials had affirmative concerns, at the time the nine institutions were selected, about the health of at least some of those institutions: the Federal Reserve had concerns over the financial condition of several of these institutions individually and for all of them collectively absent some governmental action; and former Secretary Paulson noted concern about the potential of an outright failure of one of the institutions. In addition to the basic transparency concern that this inconsistency raises, by stating expressly that the ”healthy” institutions would be able to increase overall lending, Treasury may have created unrealistic expectations about the institutions’ condition and their ability to increase lending. Treasury and the TARP program lost credibility when lending at those institutions did not in fact increase and when subsequent events – the further assistance needed by Citigroup and Bank of America being the most significant examples – demonstrated that at least some of those institutions were not in fact healthy. [In other words, they lied.]Barofsky is wise beyond his years.
It is not our intent to suggest that Government officials should make public their concerns over the financial health of individual institutions, but rather that government officials should be particularly careful, even in a time of crisis, of describing their actions (and the rationales for such actions) in an inaccurate manner. [I.e., they should not lie.] Ultimately, the lesson is straightforward: accuracy and transparency will enhance the credibility of government programs like TARP and restore taxpayer confidence in the policy makers who manage them; inaccurate statements, on the other hand, could have unintended long-term consequences that could damage the trust that the American people have in their government.” [I.e, don't lie; it's stupid.]
In a former life, I had occasion to study the methods of the investigators and prosecutors of white collar crimes. One technique was going after "the highest indictable officer." They would chase the evidence up the chain of command, giving immunity to lesser employees in return for their testimony until they reached the culpable individual in the highest position; and that's who they would charge with the crime. Barofsky is a ninny if he pulls his punches and does not seek indictments of Paulson and Bernanke. Hey, they are Republicans after all.
Barofsky seems to be doing a yeoman's job ferreting out the fraud being perpetrated on the public. Do follow his progress. Other inspectors general have been fired for doing their job. If that happens to Barofsky, you will know, for sure, that - Republican and Democrat - your government is corrupt to the core; and you should run for cover and protect your own.