I confess that I'm a bottom line person. What, I ask myself, has really happened to break up this bank, or reduce its influence?
Nothing, so far as I can see.
The constant refrain is that the public "doesn't know." The idea is that when "the people" do get to know, "something will happen."
I'm not so certain.
Goldman Sachs has had a bad reputation among many traders for years. That's when I first ran into evidence of its corruption - back in 2004. As early as the 1990s,Anne Williamson, an intrepid Wall Street journalisttestified to Congressabout the role of the US Treasury, the banks, Harvard economists and the IMF in the collapse of the Russian economy. She mentions Goldman Sachs. Numbers of other people since have written and documented Goldman's involvement in corrupt practices.
If therecent bustof Raj Rajaratnam, the founder of the hedge-fund Galleon Group, is anything to go by, the federal government is using wiretaps for its investigations. It's treating Wall Street as it's only treated mobsters and racketeers so far.
But I have a question. Is this zeal going to be across the board, or selectively? If selectively, there is the danger that the federal government will be using its clout solely or mainly to dispose of the rivals of its own prefered companies.
That's what I argued in this piece("The Paulson Putsch"),on September 25, 2008, when the bail-out was first being considered.
"Isn't the recent ban by the SEC intended only to protect the financial sector from market forces? Doesn't this encourage malinvestment and doesn't it unnaturally bolster the value of the financial industry at the expense of other industries, something that artificially low interest rates over twenty years have also encouraged?"
"Which means that however you cut it, the bail-out of the giants of finance is not so much a bail-out of the economy...or of the banking system....
It's not even a bail-out.
It's an evisceration of some banks by others...a cannibalistic binge billed to the tax-payer. "
But despite this perception now being common knowledge, things don't seem to have changed, as this piece, written only 6 months after the Paulson "putsch," notes:
"None of this seriously threatens Goldman’s status on Wall Street, of course. It’s still the place to be — perhaps now more than ever, given the carnage in investment banking.
"The people they recruit have never lost anything,” Mr. Ellis told the news service."They have always won. That is the kind of person Goldman wants to hire.”
That's from a piece at theNew York Times, published six months ago, on February 17, 2009 ("A Rare Tarnish on Goldman's Reputation").
Now, a lot of things have happened since then and maybe we'll see an end to the "revolving door" between Goldman Sachs and public office.
But if recent appointments are anything to go by, it's still business as usual.
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