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The Wall Street Bailout: An Insider’s View

Robert Rhodes edited Imperialism and Underdevelopment: A Reader (Monthly Review Press, 1970), a best seller that was widely used in graduate level courses. Today he is a political activist in Ramapo, New York.

Neil Barofsky, Bailout: An Inside Account of How Washington Abandoned Main Street While Rescuing Wall Street (New York: Free Press, 2012), 288 pages, $26, hardback.

Many readers of Monthly Review were undoubtedly both surprised and delighted by Neil Barofsky’s blistering essay in the New York Times written just after he left his position as the Special Inspector General in charge of oversight at TARP (Troubled Asset Relief Program).

Neil Barofsky was that truly rare government “bureaucrat,” a true believer in government by the people and for the people. Now he has written a book that should shock our nation: Bailout: An Inside Account of How Washington Abandoned Main Street While Rescuing Wall Street.

A short quote from the conclusion of the first chapter “Fraud 101” is a succinct summary of his basic thesis:

I had no idea that the U.S. government had been captured by the banks and that those running the bailout program I’d be charged with overseeing would come from the very same institutions that had both helped cause the crisis and then become the beneficiaries of the generous terms of their bailout. And despite my experience with DOJ, I couldn’t have imagined the ugliness of the Washington that I’d experience as someone who went against the grain by challenging powerful government officials and the Wall Street powerhouses.

The Marxist literature has often contained a discussion of the relationship between finance and industrial capital. It is not a criticism of this book to note that his essay should once again raise this question: Why has our corporate elite failed so completely to confront the evils of finance capital? Has this something to do with the problem of chronic stagnation under capitalism? I leave our discussion to theorists better trained than I am.