By Stuart Kauffman
Lloyd Blankfein, head of Goldman Sachs' revolving door with the U.S. government, is not alone. "Everyone was doing it." We know more and more of the squalid facts, from fattened Moody's questionable AAA ratings, to dollar per dollar TARP pay-offs to the same UBS that readily seduced U.S citizens to hide their wealth.
Everyone seems to be in bed with everyone "up there" where we ordinary folks don't go. In a previous blog, "Its The Banks Stupid - And Us, And..." I mistakenly said that the financial sector garnered 25% of corporate profits in 2007. According to an Op Ed April 24th by Frank Rich in the New York Times, the right answer is a mere 40%.
Think how obscene this number really is. As we know, they make no mops, are not cops and brazen their funds by inventing bets that will fail, sell them to others and then short their own products.
Is an SEC civil suit against the trillion dollar armor of Goldman Sachs good? Yes. But criminal investigations, Grand Juries, and jail should be widespread in order to break the overweening power of the power that enfolds us now -- fast and unswerving.
Larry Summers on the PBS News Hour recently opined that we need regulation of the banks, but still need banks that are too big to fail to serve our national needs. How utterly coy from a man who made millions consulting for a hedge fund while president of Harvard and now advises our president.
"Small banks failed in the Depression and are not a solution," he observed. How very coy. This is the Larry Summers who dismissed the question of why he opposed Clinton Administration investigation of derivatives with, roughly, "That was then." Well, where was he "then?" Why should we trust him now?
I've been living in Canada for five years until a few months ago. None of their banks are in trouble. Maybe it's the way they pronounce "out." As in "It's a bad idea to run 'out' of reserves." Canadian banks were and are heavily regulated. They were not happy about it in the go-go dancing days of yesteryear. All Canadians are glad now.
Meanwhile we have the putty mouthings of Mitch McConnell as the leading Republican Senator, aching with partisan passion to see a Republican victory in the mid term elections, telling us completely falsely that the Obama bank regulation plan is but an excuse to have tax payers bail out the banks yet again. Has the man no honor?
Anyway, I thought bailing out the banks was the task of the Federal Reserve, with its Fed Window wide open to Goldman, devaluing our dollars as it does so.
The ship is so wreaked, it is canted, reeking on the rocks.