Neil Barofsky, the former regulator tasked with policing banker bailouts in the Bush administration’s Troubled Asset Relief Program (TARP) told talk show host Bill Moyers another major banking crash is now “inevitable” because neither of the political parties have the stomach to end “too big to fail.”
I trust what this man is saying, and I admire his honesty and integrity. He tells us how it is on the inside with the big money players and government. He was frustrated in trying to do the job he was hired to do when so many government officials were telling him not to rock the boat in taking his job too seriously.
Reprinted from The Raw Story. Images selected and added by Ray
“This was the government policy created by the architects, Ben Bernanke who is chair of Federal Reserve, Tim Geithner, who was then the president of the New York Fed before becoming Treasury Secretary, and Hank Paulson,” he explained, describing the Bush administration’s actions during the 2008 economic crisis. “Their solution originally was to further concentrate the industry, to make the too big to fail banks bigger.”
That’s a policy the Obama administration has mostly continued, placing only modest limits on the debt load financial institutions are allowed carry, but neglecting broader reforms like restoring the long-standing firewall between checking and savings accounts and the big banks’ more risky ventures on Wall Street.
It’s not as if there isn’t some support for restoring that firewall either, which effectively lets banks risk their investors’ money while keeping deposits safe from major swings in the markets. It used to be the law, but that law was repealed during the Clinton administration, in legislation created with the help of former Citigroup CEO Sanford I. Weill. In the wake of the crisis, however, Weill admitted in July that the time has come to restore the division between investment and consumer banking, which would essentially ban the “financial supermarket” model he created that’s led to institutions becoming “too big to fail.”
Barofsky added that the consolidation of over-leveraged banks like Merrill Lynch into somewhat more healthy institutions like Bank of America ultimately put the markets on a more dangerous path than the nation’s top financial regulators realize. That’s because “you have institutions now that are just monstrous in size, over $2 trillion in assets by certain measures, close to $4 trillion by other measures,” he said, calling the reality in today’s markets “terrifying.”
“The idea that any of these institutions could ever be allowed to fail is pure fantasy, at this point,” Barofsky lamented.
That’s when Moyers cut right to the chase: “Are you suggesting that we could have another crash?”
“I think it’s inevitable,” he replied.
And Judgment is turned away backward, and Justice stands afar off:
for TRUTH is fallen in the street, and EQUITY cannot enter.
Yea, Truth fails; and he that departs from evil makes himself a
prey: and the LORD saw it, and it displeased him that there was no Judgment.
No servant can serve two masters: for either he will hate the one, and love the other; or else he will hold to the one, and despise the other. You cannot serve God and money.
On a scale of significance and importance to the Future well being of America and the World, this report and Testimony of Mr. Barofsky should be the #1 issue in this election campaign and shouted from the rooftops!
Watching from CanaDa, this American election is an exercise in Fraud, deception and manipulation. It doesn’t really matter who wins the Presidency. For those who think Romney can turn things around in less time than Obama had, think again! Hard Times are ahead.
Mr. Barofsky confirms what most people already suspected. “The rich bankers will sell their souls for a few points of profit.” Jesus chased them out of the Jewish Temple, saying the House of My Father is a House of Prayer for ALL NATIONS and you have made it a Den of thieves. Is there anything new under the Sun?
This honest realism of Mr. Barofshy with his inside experience is so refreshing to see in this election campaign of lies and misleading half-truths. The mainline news media don’t have any Integrity left in investigating and reporting the Truth in my opinion.