US government goes after Goldman Sachs

Tweet

Goldman Sachs is facing investigation over dodgy deals. This is really big news.

As this commenter says, perhaps a bit optimistically, Obama needs to clear out the Augean stables - but Goldman are all over the Government. The arms of the octopus surround Obama and the US government.

Goldman Sachs might not survive - if a forensic accounting could be done, probably none of the major banks (GS is more like a hedge-fund, even though Geithner gave them a bank charter and access to the Fed's discount window, FDIC insurance and funds at near-zero interest rates) would survive. As Matt Taibi has argued, Goldman has been behind virtually every financial crisis the US has experienced since the Civil War. In John Kenneth Galbraith's "The Great Crash", a chapter that documents Goldman's contributions to the Great Depression is titled "In Goldman We Trust". As the instigator of crises, it has truly earned its reputation.

Obama should start his house cleaning with the Treasury department. Rubin, Summers and protégé Geithner (and his hired hand Mark Patterson, Goldman's lobbyist who became chief of staff of the Treasury) and Hank Paulson should be banned from Washington; and Rattner (former NYT reporter who tried to bribe pensions funds when he worked for the Quadrangle Group and served as Obama's 'car czar' and is now likely to face lawsuits), and Lewis Sachs (senior advisor to Treasury, who helped Tricadia to make bets identical to those made by Magnetar and Goldman), and Stephen Friedman (Goldman senior partner who served as chairman of the NY Fed), and NY Fed president Dudley (former chief US economist at Goldman) must all be sent home. Actually, anyone who ever worked for a financial institution must be banned from Washington until we can reform and downsize and drive a stake through the heart of Wall Street's vampires.

The Obama administration should immediately revoke Goldman's bank charter. Even if the firm is completely cleared of illegal activities, it is not a bank. There is no justification for provision of deposit insurance for a firm that specializes in betting against its clients. Its business model is at best based on deception, if not outright fraud. Why not use the powers of eminent domain to take back Goldman's shiny new government-subsidized headquarters to serve as the offices for 6000 newly hired federal government white collar criminologists tasked with the mission to pursue Wall Street's fraud from the Manhattan citadel of the mighty vampire squid? If Obama is serious about reform, that would be a first step.