Sunday, September 2, 2012

Talking The War on Drugs, TARP and Power Centers with Neil Barofsky (Before he becomes too busy to carry on the interview)

Today's Guest is Neil Barofsky

Neil Barofsky

I have always wanted to ask a major league drug fighter about the war on drugs. Barofsky fits the profile of one of those fighters. He took down major league Colombian drug cartel leaders. But when I asked my questions, he failed to answer them.

It didn't get much better when I asked him about his role as the Special United States Treasury Department Inspector General to oversee the Troubled Assets Relief Program.

Finally, he just told me he was too busy to continue the interview and that there was an agreement that the interview was to be for only 20 minutes. Well, the agreement was actually for 30 minutes--Robert Wenzel Show executive producer Chris Rossini has the email.
    Note in this interview, I discuss power centers in two ways. The first manner is the way I normally discuss power centers, which is when I am thinking of government agencies that become power centers because they have the ability to rule and regulate over free market enterprises. In my interview with Barofsky, I also discuss drug cartels as drug distribution organizations that have a ruling "power center" where if the leaders are removed this just results in new drug kingpins stepping into fill the ruling "power center" vacuum.      

    Here's the podcast version.

    Here's the Direct Link

    Did You Miss An Episode? Catch Up:


    1. What I don't understand is how people don't make a simple connection about TARP and the "taxpayer funded" bailouts -- that the US Federal Government had to borrow the money FROM THE VERY BANKS it was bailing out. You don't have money? You go to the bond market. Who are the bond market participants? The primary dealers. The primary dealers ARE the banks that got bailed out. Where did the FDIC get all of this money? Not from deposit insurance premiums. They borrowed it from the Treasury who in turn borrowed the money from the banks.

      A very very very basic question comes to mind: Why did the federal government find it necessary to borrow money from the banks that it was bailing out? If they didn't have the money to fund their outstanding obligations, how would creating more outstanding obligations make the problem any better?

      The answer is because the system ran out of quality assets by which to leverage off of. They created more Treasury bonds because you're always and everywhere capable of using a Treasury bond as collateral in order to leverage. The largest banks needed to back-fill their leverage with quality collateral and used the public balance sheet (treasury bonds) in order to do it.

      I think Neil did a good job of reporting some of the structural problems with Washington and Wall Street. But it would be helpful if he was open to the "where did the Treasury Department get the money?" question.

    2. Thanks a million for these interviews! You have a great ability to get important questions into the conversation even if the cowardly interviewee will not answer. Loved the way the brave hero Barofsky fails to stand firm when he is asked to out his actual masters and now we know that he is part of a "Directed Opposition"! Good work.

    3. Awesome interview. It is fun as hell to listen to these guys get uncomfortable. When I hear guys like this get interviewed on MSM I am always annoyed by the lack of any really good questions being asked. On your show, I never have that issue. Fantastic stuff. Keep it up.

    4. great interview!
      love it when you go after the bad guys/idiots

      my only advice is that you should be nicer, ask the question in a tone that sounds like you're his friend/that you're on the same team. that way you can get a lot deeper and get more out of them and maybe even get them to change their stance.

      as they say: hard on the issues, soft on the person.

      1. Point taken, in most cases you are correct, but he's a former U.S. attorney. I had to smash him.

    5. Robert,

      I really enjoy your site and you have proven yourself to be a top player in the Austrian School - but I agree with Lance that you are almost hostile in your interviews, even when interviewing other libertarians. I think that it does more harm than good - but on the other hand it nice to have the differences between cato, mercatus, and mises pointed out. I really enjoy listening to all of the info they put out even though I am mainly a mises supporter.

    6. Amazing, even as this guy stands in the muck, grime, and slime of the state. He can only bring himself to see it's just the framework of the state, not the edifice itself that is the problem.
      Mr. Barofsky ripping out those rotten timbers will do us no good, since the new ones you install, will only instantaneously rot again. The whole building needs to be blown to smithereens, and scattered to the winds, and nothing ever again built in it's place, but the will of free men.

      On a side note: I love the Barney Milleresque tune you chose to frame your show with. Takes me back to care free days.

    7. What's amazing to me is the perception he has of himself and what he has done. His suggestions were ignored on TARP, so that means government needs reform. However, he wants to reform government to his view of what government should be. It is the wolves guarding the hen house, he just wants to be the head wolf.

      There is never the introspective that it is government that is the problem. Of course, how could it be when you are a US attorney? Your livelihood has been made in government and you have a substantial investment in it in order to promote your success. How can you be unbiased?

      Stopping the drug war is never on the table because 90% of prosecutions would end, and then what would Mr. Barofsky do?

    8. Russ Roberts apparently got Barofsky to stay for a full hour.

      1. Roddis,

        You could even get Barofsky to stay on a show, if you didn't ask him about his personal failure in the drug war.