The boss is a massive narcissist
Readers of this book may be surprised by the animosity between Barofsky, a registered Democrat, and Geithner. Geithner, who never embraced the principle of oversight for TARP, is portrayed as a profane bully who surreptitiously sought to undermine efforts at greater transparency for all of the various programs.
Barofsky is relentless in building his case against Geithner. He describes the Treasury Secretary’s Financial Stability program as “an unprecedented trillion-dollar playground for fraud and self-dealing.” And he notes that Geithner’s Treasury Department showered billions on Wall Street banks, while “the terms delivered by the government seemed to border on being corrupt.”
Barofsky is at his most critical of Geithner when he’s discussing the $170 billion that taxpayers put up to “keep AIG‘s collapse from precipitating a meltdown of the financial system.” While heading up the New York Fed, Geithner oversaw the payment of $60 billion to AIG’s counterparties to buy bonds that were worth considerably less than that amount. Ultimately, Barofsky never learned why Geithner didn’t try to get a better deal for the taxpayer.
One final anecdote about Geithner illustrates exactly how Barofsky felt about him. One of Barofsky’s colleagues believed that Geithner suffered from narcissism, which meant that it wasn’t psychologically possible for him to admit a mistake. And that diagnosis seemed dead on, when Geithner answered a question about errors he may have made in administering TARP by answering: “The only real mistake that I can think of was that there were times when we were unnecessarily unsure of ourselves. We should have realized at the time just how right each of our decisions were.” Really? That was the only real mistake?
A heartbreaking work of staggering genius
Of all the major books I’ve read on the financial crisis, this one is the very best at showing the dysfunctional inner workings of the unholy alliance between Wall Street and Washington, D.C. As a result of the unprecedented destructiveness of the financial crisis, we actually had a once-in-a-century opportunity to reform our seriously flawed financial system, while also assisting ordinary Americans who suffered tremendously as a result of the disaster. Neil Barofsky shows us exactly how and why we missed this incredible reform opportunity. It’s a very sad, depressing tale.
The article Why Ordinary Americans Should Be Really Angry About the Wall Street Bailout originally appeared on Fool.com.
John Reeves has no position in any stocks mentioned. The Motley Fool recommends AIG and Goldman Sachs, owns shares of AIG, and has options on AIG.
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