Neil Barofsky on the Corrupting 'Elixir of Power'

MAKING SENSE -- August 8, 2012 at 1:42 PM EDT

Neil Barofsky on the Corrupting 'Elixir of Power'

Wednesday we present the second installment of outtakes from my encounters with Neil Barofsky, Special Inspector General for the $700 billion Troubled Asset Relief Program, known in Washington, D.C. as the SIGTARP. (I'm not making this up.) Appointed by President George W. Bush and retained by President Obama, Barofsky became increasingly critical of the government's handling of bailout money. His chief complaint: that the banks were bailed out, not the victims of predatory lending.

The original interview aired on Thursday, Aug. 2. Tuesday we featured the first outtake, on Barofsky's previous experiences prosecuting Colombian drug lords and American housing scam artists. Today, he tells the story with which he led his new tell-all book, "Bailout": his meeting with President Obama's TARP czar, former head of Merrill Lynch and investment firm TIAA-CREF, Herb Allison.

Mr. Allison's only comment, when we contacted him, was: "I'll trust the NewsHour's viewers to interpret Neil Barofsky's comments."

This entry is cross-posted on the Making Sen$e page, where correspondent Paul Solman answers your economic and business questions.

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