What do Greece, Hungary, Italy, Niger and the US have in common?

All are included in nations where perceptions of corruption had deteriorated the most. The US fell from 19 to a tie for 22nd on the list, their worst ranking in the 15 year history of the study. The US barely edged out Uruguay for 22nd on the list. Iraq and Afghanistan ranked 175 and 176 respectively out of 178 nations.

I think if this ranking of US corruption was done by US citizens, the US would of fared much worse. For example:

Yves at Naked Capitalism: "Unfortunately, this suggests that Team Obama is proving Joseph Goebbels to have been correct: tell a big enough lie and keep repeating it, and the public will eventually come to believe it. And the lie is the one the Administration has been hawking for some time, that TARP was a success."

Neil Barofsky the government appointed Special Inspector General for the Troubled Assets Relief Program or SIGTARP lashes out at the US Treasury for their misleading statements, obfuscations and fast and loose accounting practices among other things. But before I get into these I want to remind everyone that TARP was sold to the American people as a fund that would buy troubled assets off the balance sheets of banks at a fair market price intended to solve a "liquidity crisis." In a matter of days after TARP was voted on and passed by the US congress then US Treasury Secretary Paulson changed his mind and "loaned" the US taxpayer funds to the TBTF (to big to fail) US financial institutions. The reason Hank did this was that the assets on the banks balance sheets were worth pennies on the dollar at best, worthless at worst. This never was a liquidity crisis, it was and still is an insolvency crisis. On to Mr. Barofsky comments:

"Treasury refuses for more than a year to require TARP recipients to account for the use of TARP funds, or claims that Capital Purchase Program participants were “healthy, viable” institutions knowing full well that some are not, or when it provides hundreds of billions of dollars in TARP assistance to institutions, and then relies on those same institutions to self-report any violations of their obligations to TARP, it damages the public’s trust to a degree that is difficult to repair. Similarly, when the Government promotes programs without meaningful goals or metrics for success, such as its mortgage modification programs, or when it makes critical and far-reaching decisions without taking an even modestly broad view of their impact... the potential for devastating job losses, or when it fails to negotiate robustly on behalf of the taxpayer, as it did when agreeing to compensate American International Group, Inc.’s (“AIG”) counterparties 100 cents on the dollar for securities worth less than half that amount, the Government invites public anger, hostility, and mistrust."

SIGTARP Barofsky continues: "
Treasury’s most recent estimate of a $5 billion loss on its AIG investment also represents a dramatic shift from the $45 billion loss that Treasury had projected in its AIG investment just six months earlier. While AIG’s fortunes may have indeed improved during the course of those six months, there is a serious question over how much of this decrease comes from a change in Treasury’s methodology for calculating the loss as opposed to AIG’s improved prospects. All of Treasury’s prior loss estimates for AIG under TARP, including the March 31, 2010, estimate of
$45.2 billion, were conducted in accordance with its published “Methodology to calculate Estimated TARP Costs” (“Methodology”), which describes how Treasury values all of its investments, including its preferred shares of stock in AIG. Consistent with that document, Treasury’s previous loss estimate for AIG, as with its estimates of other TARP investments in preferred shares of stock, accounts for a broad range of factors that might affect the value of Treasury’s holdings. The Retrospective, however, abandoned the published Methodology, instead estimating a $5 billion loss based solely on the recent market closing price of AIG’s common stock, on the assumption that the recapitalization plan will go exactly as planned and result in Treasury receiving approximately 1.1 billion common shares of AIG stock in return for its current preferred interests. While Treasury did describe its new methodology in the Retrospective, it did not disclose that this methodology differed from that used previously and from what is set forth in its published Methodology. The Retrospective also failed to disclose that its common-stock-based valuation would not and could not be used in Treasury’s fiscal year 2010. TARP financial statements, which will be published in November and which will continue to use the auditor-approved methodology that has characterized every other Treasury estimate of loss on its AIG investment."
Barofsky lists the effect on the real economy post-TARP:

Unemployment continues to hold at roughly 9.6%, 3% higher than at the start of the program.

The nation’s poverty rate increased from 13.2% in 2008 to 14.3% in 2009.

TARP’s portion of the Administration’s mortgage modification program yielded only approximately 207,000 (out of a total of 467,000) ongoing permanent modifications since TARP’s inception, a number that stands in stark contrast to the 5.5 million homes receiving foreclosure filings and more than 1.7 million homes that have been lost to foreclosure since January 2009.

From January 2010 through September 2010, close to 2.7 million homes have been subject to foreclosure notices. At that pace, foreclosure notices will have been sent to more than 3.5 million homes by the end of the year, an increase of 26% over the 2.8 million homes in 2009 and nearly five times the comparable 2006 number

Barofsky's not finished:
“The American people have a right for full and complete disclosure about their investment in A.I.G., and the U.S. government has an obligation, when they’re describing potential losses, to give complete information.”

SIGTARP Barofsky is speaking to the fact that the United States Treasury concealed $40 billion in likely taxpayer losses on the bailout of the AIG earlier this month, when it abandoned its usual method for valuing investments. To which the probable new Chairman of the House Committee on Oversight and Government Reform, Rep. Darrell Issa (R-Ca.) adds “If a private company filed information with the government that was just as misleading and disingenuous as what Treasury has done here, you’d better believe there would be calls for an investigation from the S.E.C. and others,”

Though the Obama administration and more specifically Treasury Secretary Geithner have claimed the TARP program is over and therefore so is the need for SIGTARP Barofsky. Barofsky has a different take: "As of October 3, $178.4 billion in TARP funds were still outstanding, and although no new TARP obligations can be made, money already obligated to existing programs may still be expended. Indeed, with more than $80 billion still obligated and available for spending, it is likely that far more TARP funds will be expended after October 3, 2010." Barofsky is saying it ain't over until it's over, until every last dime is accounted for.



On to a related subject known here in the US as "Foreclosuregate." Related due to the fact that what we now know are basically worthless US mortgages are what then Treasury Secretary Hank Paulson, former CEO of Goldman Sachs, decided not to buy from the banks at pennies on the dollar at the peak of the financial crisis. Mr. Paulson decided not to buy these assets because his friends, peers would of been wiped out due to the losses on the paper due to fraud and corruption. Paulson then allowed Fed Chairman to act as a coward thief in the night (hat tip Willem Buiter) and pay 100 cents on the dollar for the same assets shielded from public view by the secrecy rules that exist for the Federal Reserve.

William Black, Associate Professor of Economics and Law at the University of Missouri-Kansas City has been an outspoken critic of the handling, or lack there of, of the financial crisis. Mr. Black commonly uses terms such as fraud, corruption and criminal behavior to describe the reasons behind the financial crisis. Mr. Black knows of what he speaks. Professor Black is the author of the 2005 best seller "The Best Way to Rob a Bank is to Own One." Also, Professor Black was the Deputy Director of the Federal Savings and Loan Insurance Corporation in the 1980's during the savings and loan crisis. Professor Black prevailed in showdowns with the powerful Democratic Speaker of the House, Jim Wright, and helped identify the infamous Keating Five, a group of U.S. senators, including 2008 republican candidate for president John McCain, who tried to quash his attempt to close Charles Keating's Lincoln Savings & Loan. Wright eventually resigned amid unrelated ethics charges, and the senators were reprimanded for poor judgment. Keating went to jail for securities fraud. During his tenure at the FSLIC, Mr. Black's efforts helped lead to over 1,000 convictions of senior insiders for fraud, perjury and other crimes.

In the following video, Professor Black speaks to "Foreclosuregate." Mr. Black calls for the firing of Attorney General Holder, Treasury Secretary Geithner and Fed Chairman Bernanke. The Professor's comment start at approximately 6 minutes into the video but, the entire 12 minute video is worthy of your time: http://market-ticker.org/akcs-www?post=170265

Here's an interview of Black from 2009 by Barron's magazine:http://online.barrons.com/article/SB123940701204709985.html#articleTabs_panel_article%3D1

An April 2009 interview by Bill Moyers: http://www.pbs.org/moyers/journal/04032009/profile.html

PBS interview from February 2010:http://www.pbs.org/newshour/bb/business/jan-june10/solman_02-17.html

A poll released maybe 6 months ago showed that only 20% of Americans had the belief that the US government is acting in the best interests of their citizens. For the last half of the 20th century that poll number held steady at 80%. A poll out today by the Harris group, http://www.harrisinteractive.com/Hi_assets/TopHitPageNews.html shows Obama's approvals at 37% which is noticably higher than the 11% approval of the US congress found in the poll.
 From the Iraq war, torture, Abu Ghirab, Guantanamo, Financial crisis to the fraud, criminal behavior behind the current housing scandal to record domestic outflows from US equities, lack of trading volume and approximately 70% of all trades on the US stock exchanges being done by co-located high frequency tradings behind the curtain, at home and abroad, America's credibility is dying on the vine. The credibility of and the belief in the idea of democracy is it's strongest suit. America's strongest suit is very weak. The country is on the brink.