This isn’t all that surprising. Fox News reports that SIGTARP Neil Barofski issued a report which concludes the Fed’s lied about last year’s bailout of banks.
The credibility of the government’s $700 billion financial rescue program was damaged by claims a year ago that all of the initial banks receiving support were healthy, a new report contends.Special Inspector General Neil Barofsky generally found that the government had acted properly in October 2008 as it scrambled to implement the Troubled Asset Relief Program to avert the collapse of the U.S. financial system.
But the report said that then-Treasury Secretary Henry Paulson and other officials were wrong to contend at an Oct. 14 press conference that all nine institutions receiving the first round of support — $125 billion — were sound.
“These are healthy institutions, and they have taken this step for the good of the economy,” Paulson had declared at the time.
Barofsky said that the fact that Citigroup Inc. and Bank of America Corp. soon required billions in additional assistance highlighted the inaccuracy of that claim and raised questions about the whole effort. In addition, Merrill Lynch, which was also in the original nine, was in the process of being acquired by Bank of America because of its weakening financial position.
Mr. Barofsky’s report should lend credence to the call to cancel the TARP program and return any unused money to the Treasury to pay off debt. The question is whether $330 billion in unspent funds will be too big a temptation for the big spending democrats to resist.
