Neil Barofsky is being nicknamed the “bailout cop“. His job is to oversee the $700 billion in TARP funds being used to prop up failing companies. I can understand some regulation of TARP funds as we have already seen some instances of abuse such as AIG throwing lavish parties immediately after receiving TARP funds. So I am in agreement that guidelines should be met for the use of taxpayer dollars, but what we are seeing now is complete government regulation of spending and criminal charges being brought against employees.

As an investor, this type of government control is worrisome. This is tip-toeing on nationalization, so why would I put my money in to these companies? I wouldn’t. TARP is designed to keep these companies afloat, but by tightening the governments grip on private companies they are going to see the opposite effect. If people are not confident enough to invest in these companies, they will never recover. But again, this is a catch 22 situation. Without the government regulation, if we hear about any superfluous spending by these companies, the entire nations gets up in arms. So how do you fix this problem? Heck if I know. I’m just glad I’m not the President.