Wednesday, September 12, 2012

AIG, Yves Smith, Sorkin, Barofsky

Yves Smith correctly points out an uncharacteristically weak piece of reasoning by the usually-insightful NYT reporter Andrew Ross Sorkin.

In question: how much the bailout of AIG did, or did not, cost the U.S. Sorkin busts on the claim by former TARP plan inspector general, Neil Barofsky, that AIG will prove a big loss, if properly accounted for.

In a nutshell, the bailout of AIG cost more than Sorkin says it did. It is unclear why Sorkin chose to try to discredit Barofsky on the matter. Smith is right to point out Sorkin's mistake here.

I read Barofksy's book, Bailout, eagerly this summer, and enjoyed it. Barofsky has an abrasive personality, which comes through in almost everything he does. People may not like him. It is only because he is telling the truth!

I like Sorkin's reporting. He happened to make a mistake here. I wish we had more prosecutors and inspectors willing to take on the kind of thankless tasks that Barofsky did. There is a wiff of politics in this matter, but I think Sorkin, Barofsky, and Smith are all Democrats, or at least, more supportive of Democrats than Republicans. My point is only about the math.