Neil Barofsky: Washington's Ties to Wall Street Caused TARP's Failure

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Appointed by the Bush Administration as Special Inspector General in charge of the Troubled Asset Relief Program (TARP), Neil Barofsky assumed his position in the wake of the 2008 financial crisis when Americans households collectively lost $19.2 trillion.

As chronicled in his new book, "Bailout: An Inside Account of How Washington Abandoned Main Street While Rescuing Wall Street," Barofsky thought the Bush and Obama Administrations wanted a tough regulator, an inspector general who would aggressively oversee the hundreds of billions of dollars loaned to the banks, the institutions that helped cause the immense financial crisis.

As Barofsky tells it, he couldn't have been more wrong. "Within the culture of the Treasury Department, and in Washington in general, there is this deference, and almost a deification, of the executives at these large financial institutions," he tells The Takeaway. He explains that he thought his job was to insure that the banks didn't take advantage of the TARP program and its taxpayer dollars, but both the Obama and Bush Administrations told him not to worry about loopholes in TARP because big banks wouldn't risk their reputations just to profit off of taxpayers.