The Need for a Higher Rate of Increase in Prices: Sebastian Mallaby Is Forty Months Late Department
In Which I Give Up Refereeing the War Over the Treasury: Matthew Yglesias on Neil Barofsky vs Tim Geithner

Jason LInkins Doesn't Like the Fact That Jackie Calmes Doesn't Like Neil Barofsky's "Bailout"

Treasury's handling of home mortages--the HAMP program--was an utter, complete, total disaster. Its extreme disinterest in actually doing its job to rebalance mortgage financing is in my view the single most major count of any indictment of Tim Geithner, a principal cause of why the recovery has been so slow, and why I no longer say: "Geithner has a very hard job, and I'm sure is doing it better than I would in his place".

As Joe Gagnon says:

[O]ne of the biggest goals of QEI was to push down the mortgage rate to spark a refinancing boom to encourage households and enable households to reduce their expenditures and repair their balance sheets and be able to spend again. That worked not quite as well as we hoped because the administration’s program for getting underwater borrowers to borrow didn’t work and I think that’s a true disaster that has no excuse. I have nothing but incredible, there’s just, the blame the administration on not doing this is just incredible. This could have been a huge success. We got the lowest 30-year mortgage rates in history and we couldn’t take advantage of them to the extent that we could. We got about a trillion dollars in refinancing when we should have gotten two or three trillion dollars in refinancing.

The way I have heard the story, however, is that Neil Barofsky at SIGTARP was not part of the solution to HAMP but rather part of the problem: eager to play "gotcha" with any home refinancings that ended up costing the government money, and also eager to leak whatever "gotchas" he could to the highly partisan republican Darrell Issa, Barofsky's advice when taken made HAMP less effective and more bureaucratic.

Jason Linkins:

New York Times 'Bailout' Review Incomprehensible, Dismissive: Calmes' ersatz review in The New York Times… comes off as a lengthy valentine to the Treasury Department officials who are so soundly savaged in Barofsky's book…. Chances are, after all, that Republicans will widely embrace "Bailout" -- their base is so uniquely averse to TARP that Barofsky's critiques make him an ally of convenience. That said, it's not controversial at all to remind you that the GOP remains opposed to the sort of rigorous financial sector oversight that Barofsky champions….

[S]he argues that Barofsky's account contains a series of internal contradictions….

[L]et's take three TARP-related programs that Calmes never mentions by name (despite the fact that the staggering majority of Barofsky's account concerns these programs): the Home Affordable Modification Program, the Term Asset-Backed Securities Loan Facility, and the Public-Private Investment Program. In all three cases, Barofsky contends that the programs were hastily created for the purpose of scoring political points, invited fraud and abuse, and greatly favored Wall Street banks at the expense of taxpayers. Additionally, his concerns about these programs were routinely ignored….

It is honestly galling that Calmes simply dispenses with HAMP by saying, "Mr. Barofsky justifiably spends time on Treasury's failure to get banks to stem home foreclosures"….

But then Linkins doesn't talk at all about the Treasury's handling of the TALF, or about the PPIP at all. And I do not have the impression that the Treasury's neglect of Barofsky's advice (to the extent it was neglected) on TALF and PPIP led to the kinds of fraud that Barofsky was hired to prevent.

I gotta score this for Calmes on points.