In his interview with Business Insider, Barofsky touched on everything from yesterday's announcement that Americans holding Fannie and Freddie mortgages would not get a principal write downs, to the general culture in Washington.

Bottom line: Barofsky said the incentive structure in our nation's capitol is all wrong. There's a revolving door between bureaucrats in Washington and Wall Street banks, and politicians just want to keep their jobs.

For regulators it's something like this:

"You can play ball and good things can happen to you get a big pot of gold at the end of the Wall Street rainbow or you can do your job be aggressive and face personal ruin...We really need to rethink how we govern and how regulate," Barofsky said.

Read more: http://www.businessinsider.com/neil-barofsky-2012-8#ixzz22KaPiPvu 

4:27 video interview