From the Washington Post piece today (2/15/11) about TARP inspector general Neil Barofsky's resignation:

"We're fine with critics," said one Treasury official, who spoke on condition of anonymity in order to speak more candidly. "[But] he's been consistently wrong about a lot of big things."

That's a pretty serious charge to level at someone--which is probably why you'd do so anonymously, since then you don't have to back it up.  Why the Post would print it is another matter entirely. The fact that they would refer to this as a "candid" assessment is totally puzzling. Read the rest of the article, though, and you come away with a sense that Barofsky upset the wrong people:

He quickly emerged as an aggressive overseer, viewed as a much-needed cop monitoring for waste and fraud within TARP by some lawmakers and watchdog groups, and, by Treasury officials and financial-industry representatives, as a self-promoter whose overreaching investigations scared some needy banks away from participating in the federal aid program.

In his sometimes scathing reports to Congress, Barofsky showed little reluctance in criticizing administration officials on everything from how their lack of transparency was fueling "anger, cynicism and distrust" to how their foreclosure prevention efforts had fallen well below expectations.

If the Post really believes that Barofsky was "wrong about a lot of big things," it should explain--or get someone else to do so.  Giving a government official--who has presumably been on the receiving end of Barofsky's criticism--a chance to hit back anonymously is poor journalism.

A Tiny Revolution blogger Jonathan Schwarz (7/9/09) has posted a reminder that "back in March Phillip Swagel, who'd been assistant treasury secretary under Hank Paulson, wrote a long article about the TARP bailout called 'The Financial Crisis: An Inside View.'"

Thinking that maybe "it would be news if Swagel had stated that Paulson, Bernanke and Bush's attempts to foment panic to pass the bailout have 'surely' contributed to the current recession," Schwarz lays out some quotes showing that actually "he did": "The way in which the TARP was proposed and eventually enacted surely must have contributed to the lockup in spending," and "they could plainly see that the U.S. political system appeared insufficient to the task of a considered response to the crisis. Surely these circumstances contributed to the economic downturn."

To Schwarz, "this was obvious at the time. Back on September 26, I (among many, many others) asked: 'How have things turned out before when the president, Treasury secretary, Federal Reserve chairman and a leading presidential contender all scream in public constantly about how we're on the verge of a giant financial meltdown?'":

In any case, there are no references to Swagel's statement anywhere online except in the original document.

Likewise, Swagel suggests the mid-September financial situation might have been dealt with without an immediate appropriations bill by Congress: "A counterfactual to consider is that the Treasury and Fed could have acted incrementally, with backstops and a flood of liquidity focused on money markets and commercial paper—but not the TARP."

That too has been mentioned nowhere online. Oh well.

All of which earns Schwarz' scathing headline declaring the corporate media silence "Another Triumph for American Journalism." Read the FAIR magazine Extra!: "Going All Out for Bank Bailout: Media Paint Crisis as Too 'Urgent' for Skepticism" (1/09) by Dean Baker & Kris Warner.

Looking back over how corporate "media abandoned any pretense of objectivity in pushing the original TARP back in the fall," when "they eagerly pushed the story that the economy would collapse if the TARP did not pass," Dean Baker (Beat the Press, 3/28/09) recalls how "media never told the public that the Fed had the ability to takeover the banks in the event of a national emergency and it had plans to do exactly this back in the early '80s debt crisis." Which makes it somewhat unsurprising that "the new line that being pushed to argue that there is no alternative to the Geithner plan is the claim that Obama would need congressional authorization to have the FDIC take over bankrupt banks":

Is that so? It's not clear why. The law authorizes the FDIC to take over bankrupt banks. Under the law passed by Congress, the FDIC is supposed to take over Citigroup, Bank of America and other zombie banks.

It's likely that the FDIC would not have enough money to pay for cleaning up these zombies, especially if it pays off the banks' bondholders. (It has no legal or moral obligation to pay these bondholders, unlike FDIC-insured deposits.)

The Fed could almost certainly lend the FDIC the necessary money, as it is doing under the Geithner plan. The Fed can pretty much do whatever it wants, so it is not clear why anyone would think it could give money to subsidize banks through the Geithner plan, but not to clean up the banks' mess.

Of course, the other story is interesting also. Suppose that the FDIC seized the bankrupt banks and lacked the funds to clean up the mess. Would the Republicans allow the banks' bondholders to get cleaned out? That doesn't seem likely, but it might be fun to watch.

The underreported "fact is that the banks and their political allies have lied to the public continuously throughout this crisis to get more taxpayer money for their pockets. It is irresponsible to take anything these people say at face value at this point." See the FAIR magazine Extra!: "Going All Out for Bank Bailout: Media Paint Crisis as Too 'Urgent' for Skepticism" (1/09) by Dean Baker & Kris Warner