IG-Gate Update: The Garter Belt Bailout?

While AmeriCorps IG Gerald Walpin made headlines Friday with his lawsuit, this week the IG spotlight is on SIGTARPNeil Barofsky, the special inspector general for the Wall Street bailout rushed through Congress last October. Monday, Barofsky issued a report accusing Treasury Secretary Timothy Geithner of “rejecting ‘common sense’ by not requiring banks receiving billions of dollars in government money to say how they are using the money.”

Unlike Walpin and two other ex-IGs whose cases are involved in the smoldering scandal known as “IG-Gate,” SIGTARP is still on the job. However, last month, Sen. Chuck Grassley (R-Iowa) sent Geithner a stern letter asking about “a dispute over certain Treasury documents that were being withheld from SIGTARP auditors on a specious claim of attorney-client privilege.”

Clearly, Barofsky’s office is experiencing the same kind of obstructions and pressures that other IGs have encountered since the Obama administration brought “The Chicago Way” to Washington. With Democrats on a deficit spending spree, watchdogs like Barofsky are the last line of defense against wholesale fraud and corruption in the use of taxpayer dollars. As I explained Monday morning:

The Democrats just want to shovel money out the door and don’t care who gets it, except to be sure their well-connected friends get their share.
According to the liberal neo-Keynesian economic gospel, as long as the federal government does X-billion dollars of deficit spending, that will produce X-plus-Y amount of stimulus value (where Y = Magic Government Spending Multiplier Effect) without regard to whether the money ends up feeding orphans or supplying the mistresses of Goldman Sachs executives with bustiers and garter belts
Unfortunately for liberals, the stupid taxpayers can never seem to comprehend the nuances of neo-Keynesian theory the way Nobel Prize-winning genius Paul Krugman does.
No matter how many times they’re lectured about this “stimulus”/bailout brilliance, the idiots who pay the taxes get a little miffed to discover that their great-grandchildren’s future has been hocked to pay for new wallpaper and wainscoting in the executive lavatory of a giant banking conglomerate which — as every expert in Washington explained last fall — was so frantically in need of cash that the branch managers were sending tellers to sell plasma to the blood bank, merely to prevent a complete catastrophic meltdown in the global finance system. . . .

Please read the whole thing. Also please check out my American Spectator special report on what’s going on behind the scenes of the IG investigation on Capitol Hill.

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