Posts Tagged ‘Goldman Sachs’
Is Goldman Obama’s Enron? No, it’s worse
By J.P. Freire, Washington Examiner, 4/20/2010
Campaign contributions from Goldman Sachs employees to President Obama are nearly seven times as much as President Bush received from Enron workers, according to numbers on OpenSecrets.org.
President Bush’s connections to Enron were well-hyped during the company’s accounting debacle that rippled through the economy. Time magazine even had an article called, “Bush’s Enron Problem.” The Associated Press ran with the headline, “Bush-backing Enron makes big money off crisis.” David Callaway wrote that Enron for Bush was worse than Whitewater for Clinton.
In 2002, the New York Times wrote: “President Bush is seeking to play down his relationship with Enron’s embattled chairman, Kenneth L. Lay. But their ties are broad and deep and go back many years, and the relationship has been beneficial to both.” (h/t Lachlan Markey)
But the mere $151,722.42 (inflation adjusted) in contributions from Enron-affiliated executives, employees, and PACs to Bush hardly add up to Obama’s $1,007,370.85 (inflation adjusted) from Goldman-affiliated executives and employees. That’s also not taking into account how much Goldman contributed to Obama cabinet member Hillary Clinton ($415,595.63 inflation adjusted), which was itself almost three times as much as Bush received as well.
It would be fair to say that the total amount the Obama administration has received from those affiliated with Goldman Sachs is ten times that of what Bush received from Enron.
Republicans Are Losing Their Way On the Bank Bill
by David Horowitz, newsrealblog.com, April 21, 2010
Republicans have backed their way into a corner in opposing the bank bill. The “just say no” to bailouts is totally delusional. If the big bank fail, you do have to bail them out or it really will be a total collapse. That’s why you have to regulate them, which is the lesson we should have learned when Bush bailed out the banks. Michael Barone, usually an astute commentator has missed the boat by a wide margin on this one. The two Republican commissioners on the SEC voted not to prosecute Goldman Sachs for what’s fairly clearly extreme criminal behavior. Goldman is being prosecuted because they marketed and sold a security that was constructed by someone who was shorting the security while clearly misleading the clients about what was going on. This is the equivalent of Ford selling you a new car with the full marketing of its safety features while (with Ford’s complete knowledge) the engineers go to Vegas and bet a billion dollars (yes billion with a b) that all of the cars of that model will explode. The Goldman team should be arrested and prosecuted to the full extent of the law. Here’s a short, but high quality analysis of the situation:
It’s hard for me to understand why the Republicans think these positions make any sense. Here’s a very good article in today’s financial times on regulation by Martin Wolfe. It explains why this is such a serious issue. The Democrats have their share of class warfare items in the bill (most of the consumer protection items) but at least they aren’t sticking their heads in the sand.
From http://www.newsrealblog.com/2010/04/21/republicans-are-losing-their-way-on-the-bank-bill/
Interesting article
Secret AIG Document Shows Goldman Sachs Minted Most Toxic CDOs
by Richard Teitelbaum, Bloomberg, Feb. 23
When a congressional panel convened a hearing on the government rescue of American International Group Inc. in January, the public scolding of Treasury Secretary Timothy F. Geithner got the most attention.
Lawmakers said the former head of the New York Federal Reserve Bank had presided over a backdoor bailout of Wall Street firms and a coverup. Geithner countered that he had acted properly to avert the collapse of the financial system.
A potentially more important development slipped by with less notice, Bloomberg Markets reports in its April issue. Representative Darrell Issa, the ranking Republican on the House Committee on Oversight and Government Reform, placed into the hearing record a five-page document itemizing the mortgage securities on which banks such as Goldman Sachs Group Inc. and Societe Generale SA had bought $62.1 billion in credit-default swaps from AIG.
These were the deals that pushed the insurer to the brink of insolvency — and were eventually paid in full at taxpayer expense. The New York Fed, which secretly engineered the bailout, prevented the full publication of the document for more than a year, even when AIG wanted it released.
That lack of disclosure shows how the government has obstructed a proper accounting of what went wrong in the financial crisis, author and former investment banker William Cohan says. “This secrecy is one more example of how the whole bailout has been done in such a slithering manner,” says Cohan, who wrote “House of Cards” (Doubleday, 2009), about the unraveling of Bear Stearns Cos. “There’s been no accountability.”
–SNIP– “It’s almost too uncanny,” Calacci says. “If these banks had insight into the underlying loans because they had relationships with banks, originators or servicers, that’s at the least unethical.”
Read more at http://www.bloomberg.com/apps/news?pid=20601109&sid=ax3yON_uNe7I&pos=11
Down With Big Business
by Congressman Paul Ryan, Forbes Magazine, December 11, 2009
How the government is smothering dreams and stifling growth.
In 1979, Robert Bartley’s editorial writing at the Wall Street Journal not only garnered a Pulitzer Prize, but also exposed a pernicious threat to free enterprise. In a piece titled “Down With Big Business,” which focused on how General Motors was using its muscle and government connections to squeeze out competitors, Bartley concludes we ought not rely on big business to defend free markets. It’s up to the American people–innovators and entrepreneurs, small business owners, Bartley’s “XYZ Bumperlight Lens Company”–to take a stand.
Thirty years later, this crony capitalism is back with a vengeance, accelerated by an aggressive program by President Obama and the Democratic congressional leadership. It is wreaking havoc on economic recovery and fueling continued resentment among the American people.
The actions taken at the height of the financial panic last fall, with credit markets frozen, succeeded in preventing a systemic–and catastrophic–collapse. Since bringing us back from the precipice however, the Troubled Asset Relief Program [TARP] has morphed into crony capitalism at its worst. Abandoning its original purpose providing targeted assistance to unlock credit markets, TARP has evolved into an ad hoc, opaque slush fund for large institutions that are able to influence the Treasury Department’s investment decisions behind-the-scenes. No longer concerned with preserving overall financial market stability, Treasury’s walking around money continues to be deployed to reward the market’s Goliaths while letting its Davids suffer.
Read more at http://www.forbes.com/2009/12/11/business-government-politics-reform-opinions-contributors-paul-ryan.html