How’s the Wall Street bailout going? If you’re on Wall Street, it’s going really well. For the rest of us? Here’s the assessment of Neil Barofsky, the special inspector general managing the Troubled Asset Relief Program:
“These banks that were too big to fail are now bigger,” Barofsky said. “Government has sponsored and supported several mergers that made them larger and that guarantee, that implicit guarantee of moral hazard, the idea that the government is not going to let these banks fail, which was implicit a year ago, is now explicit, we’ve said it. So if anything, not only have there not been any meaningful regulatory reform to make it less likely, in a lot of ways, the government has made such problems more likely.
“Potentially we could be in more danger now than we were a year ago,” he added.
This is what happens when you don’t create checks and balances in the economy.
For more infuriatingly depressing details, see the Inspector General’s latest quarterly report.
