Goldman Parachutes

There's been a lot of talk on the net about Goldman Sachs, especially since Matt Tabbi's Rolling Stone article following the shadowy firm through every major Wall Street boom and bust cycle. Amazingly, Goldman always seems to come out on top. In our most recent crisis, leveraged up to their eyeballs in bad securities and ineligible for government bailouts because they were not a bank, presto-chango, Goldman morphs into a bank holding company overnight and gets a nice fat bailout check. Then, when the firm stood to loose big on a failing AIG, the massive US bailout of the insurance company saw another $13 billion quietly funneled to Goldman to pay of its securities at 100 cents on the dollar. The rich never take losses.

It's a strange formula. Wealthy men take enormous risks, they lose big, and poor men make good the losses by giving the rich free money. And since the rich own the media and pay off the politicians, they have cemented the idea in the public's mind that all this is "for our good." Meanwhile, Goldman announces a $2 billion quarterly profit, setting aside a cool $18 billion for future bonuses and employee compensation. How tactful of them. And this news comes on the heels of a cloak and dagger spy heist of proprietary Goldman trading code where Goldman representatives admitted that anyone who got their hands on it could "manipulate the market in an unfair way." Did anyone ever stop to consider what Goldman employees were doing with the code all along? Matt Tabbi has.

Ilargi over at Automatic Earth talked about the futility of getting to the bottom of a power center like this that seems to have its operatives placed at the very highest levels of the US government. "In the case of Goldman, if you would want to really go after the firm and its people, if you would want to dissect to the bone the books and transactions, the links, liaisons, and connections, the trades taking place on a daily basis over, on and under tables and counters, ... That is, if you hunt Goldman down, all the way down, you will wind up without a US government."

The NY Times cemented this point in an article where they showed how Goldman alumni leave the company, migrate to high government posts that set economic policy, then migrate back to the private sector again. Washington's Blog laid out the current list this way:

"The Times points out that Goldman alums include:

* Former treasury secretary Hank Paulson

* Paulson's bailout chief Neel Kashkari

* Interim Treasury investment officer Reuben Jeffrey

* Key Treasury players Dan Jester, Steve Shafran, Edward C. Forst, and Robert K. Steel

* Key New York Federal Reserve players Stephen Friedman (head of the New York Fed board of governors, who sat on Goldman's board and owned a substantial stake in Goldman while he was making official decisions), William C. Dudley (head of the New York Fed's unit that buys and sells government securities), and E. Gerald Corrigan (charged with convening a group to analyze risk on Wall Street)

And there are many more Goldman alums who have been - or are soon to be - appointed. For example, Obama has named Gary Gensler to head the Commodity Futures Trading Commission. And Geithner named Mark Patterson as his top aide last January."

And here you thought Barak Obama was running the show.