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Bailout: How Washington Abandoned Main Street While Rescuing Wall Street
Paperback
Published January 1, 2013
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Displaying 1 - 2 of 2 reviews
July 30, 2024
AN INSIGHTFUL AND CHILLING ACCOUNT OF THE TARP PROGRAM
Neil Barofsky was of course the special Inspector General of the TARP program, and this 2012 book is a memoir with commentary on his experiences.
He notes, "The banks realized that they could create the same kind of mortgage-backed securities as the GSEs, only without having to guarantee the payments, by focusing on the types of loans that fell short of the GSEs' requirements. Those were called 'subprime' loans because banks made them to borrowers with lower credit ratings... who had less money for a down payment." (Pg. 82) He adds, "Before long, demand for the [mortgage-backed] bonds became so great that banks were having a hard time scrounging enough mortgages together to buy to make more of them. So mortgage lenders got inventive. They started offering mortgages that required remarkably low payments at first, but which would later reset to a much higher rate that the borrower might no longer be able to afford... a borrower no longer had to prove that he was making a certain salary or even that he had a job... The mortgage broker or loan originator... earned fees based on the number of loans he could generate..." (Pg. 85)
He reports, "the news broke that Treasury had authorized the insurance giant AIG to pay $168 million in 'retention bonuses' to employees in its Financial Services Division, the very unit whose reckless bets had brought down the company... For those on the left, the payments represented more evidence of Treasury's betrayal of the public in administering TARP... For those on the right, the payments encapsulated everything that they saw wrong about the government's policy of 'corporate welfare,' which seemed endlessly to reward failure. They were both right." (Pg. 138)
He notes, "Our strategy was paying off, and by the time I stepped down... we had secured criminal convictions of eighteen individuals for TARP-related crimes, with fifty-four more charged either civilly or criminally as a result of our investigations... we had prevented more than $550 million in taxpayer dollars from being lost to fraud and assisted in the recovery of more than $150 million." (Pg. 209)
Although Barofsky is sometimes a bit "self-promoting," this is an absolutely essential document for anyone studying the 2008 financial crisis and its aftermath.
Neil Barofsky was of course the special Inspector General of the TARP program, and this 2012 book is a memoir with commentary on his experiences.
He notes, "The banks realized that they could create the same kind of mortgage-backed securities as the GSEs, only without having to guarantee the payments, by focusing on the types of loans that fell short of the GSEs' requirements. Those were called 'subprime' loans because banks made them to borrowers with lower credit ratings... who had less money for a down payment." (Pg. 82) He adds, "Before long, demand for the [mortgage-backed] bonds became so great that banks were having a hard time scrounging enough mortgages together to buy to make more of them. So mortgage lenders got inventive. They started offering mortgages that required remarkably low payments at first, but which would later reset to a much higher rate that the borrower might no longer be able to afford... a borrower no longer had to prove that he was making a certain salary or even that he had a job... The mortgage broker or loan originator... earned fees based on the number of loans he could generate..." (Pg. 85)
He reports, "the news broke that Treasury had authorized the insurance giant AIG to pay $168 million in 'retention bonuses' to employees in its Financial Services Division, the very unit whose reckless bets had brought down the company... For those on the left, the payments represented more evidence of Treasury's betrayal of the public in administering TARP... For those on the right, the payments encapsulated everything that they saw wrong about the government's policy of 'corporate welfare,' which seemed endlessly to reward failure. They were both right." (Pg. 138)
He notes, "Our strategy was paying off, and by the time I stepped down... we had secured criminal convictions of eighteen individuals for TARP-related crimes, with fifty-four more charged either civilly or criminally as a result of our investigations... we had prevented more than $550 million in taxpayer dollars from being lost to fraud and assisted in the recovery of more than $150 million." (Pg. 209)
Although Barofsky is sometimes a bit "self-promoting," this is an absolutely essential document for anyone studying the 2008 financial crisis and its aftermath.
October 16, 2024
Ever wonder why Pres Obama meekly followed the 2008 bail out plan that favored the wealthy, as created by George W Bush?
Want to know why the bail out favored the very wall street financial firms that caused the crisis, over the interests of the homeowners who were the victims?
Most importantly -- does Dodd/Frank protect us from a recurrence of the 2008 crisis?
If you ponder these questions, this is the book for you.
It's written by insider Neil Barofsky, who was the Inspector General in Charge of TARP Oversight. Yep, the exact right guy to write an up-close and personal account of what happened during the bail out.
This book is objective, detailed, well-sourced.... and devastating in its conclusions.
If you wonder why millions vote for Trump -- a guy who has promised to wreck the "rigged" system and regularly bashes the political elites of both political parties -- here's your answer.
Want to know why the bail out favored the very wall street financial firms that caused the crisis, over the interests of the homeowners who were the victims?
Most importantly -- does Dodd/Frank protect us from a recurrence of the 2008 crisis?
If you ponder these questions, this is the book for you.
It's written by insider Neil Barofsky, who was the Inspector General in Charge of TARP Oversight. Yep, the exact right guy to write an up-close and personal account of what happened during the bail out.
This book is objective, detailed, well-sourced.... and devastating in its conclusions.
If you wonder why millions vote for Trump -- a guy who has promised to wreck the "rigged" system and regularly bashes the political elites of both political parties -- here's your answer.
Displaying 1 - 2 of 2 reviews