The thefts on Wall Street have robbed this nation of much of its wealth. Pension funds were wiped out. Yet the thieves show no remorse. Someones should go to jail. Also, the Republicans who did away with the regulations should be exposed and held accountable. Instead, several have moved on to the private sector to deliver the goods. Major deregulator, former Congressman Dick Armey, is now heading up the Astro-Turf Freedom Works Campaign. Madoff went to jail as have a few others but bay and large, these corporate criminals walk. Likewise, the Gulf of Mexico oil disaster, we are told, was the rsult of the Bush administration deregulation. It is at least rumored that the Cheney secret meeting is what produced the argeement with BP, avoiding the state of art off shore rig installation. Without accountability, criminal accountability there is no deterence for those in power to not betray the public trust. They should be made examples of. RGN
‘God, What a Piece of Crap’By Robert Scheer
Posted on Apr 28, 2010
It was the Perry Mason moment in the unraveling of what was left of Goldman Sachs’ reputation. Only in this case, it involved a grizzled former prosecutor, Sen. Carl Levin, rather than a genial defense attorney. The case was broken and the truth about the depth of Goldman’s corruption revealed in his startling cross-examination of Goldman Chief Financial Officer David Viniar.
The Michigan Democrat, citing the language of the internal e-mails of Goldman traders concerning the deceptive products they were selling, asked: “And when you heard that your own employees in these e-mails are looking at these deals said `God what a shitty deal. God, what a piece of crap,’ when you hear your own employees and read about those e-mails, do you feel anything?”
Viniar’s answer told us all we need to know about the banal but profound immorality of Goldman’s business culture: “I think that’s very unfortunate to have on e-mail.”
A flabbergasted Levin cut in with “On e-mail? How about feeling that way?” and Viniar, apparently moved by jeers of ridicule from the audience, conceded “I think it is very unfortunate for anyone to have said that in any form.” Pressed further by Levin asking, “How about to believe that and sell them?” the CFO finally conceded, “I think that’s unfortunate as well.” To which Levin responded, “That’s what you should have started with.”
But Goldman’s executives didn’t start with any such moral qualms or end with them, as was made clear in the testimony of Goldman Chief Executive Officer Lloyd Blankfein that followed. Blankfein basically pleaded ignorance about the company’s scams, making it clear that offering the details of such products was below his pay scale. That would be $68 million in 2007, the highest in Wall Street history, when Goldman’s bets against its customers paid off so handsomely. What was clear is that his job was to ensure the company’s immense year-end profitability with no questions asked about the methods used. “I did not know” he replied when asked about the details of the company’s trades, and at another point he added, “We’re not that smart.” Then there was “I don’t have any knowledge” on selling short, and finally, “We did not know what subsequently occurred in the housing market.”
What he did know is that the scoundrels in his mortgage betting rooms were, as with that high-flying London operation that got AIG so much loot before it exploded, raking in enormous profits. Such ignorance is bliss for a Goldman CEO who apparently is rewarded in inverse proportion to what he knows of the operation as long as he pays attention to the bottom line.
That was certainly the case for the man whom Blankfein succeeded the year before, Henry Paulson, when Paulson went off to serve as George W. Bush’s treasury secretary. As Paulson admits in his memoir, he was unaware that suspect mortgages were at the heart of the banking meltdown, even though he was head of Goldman when those toxic mortgage securities were developed.
And then there is that other Goldman-honcho-turned-public-servant Robert Rubin, who was a Goldman vice chairman before serving as Bill Clinton’s treasury secretary. In that Cabinet job, Rubin pushed through the Financial Services Modernization Act, which demolished the wall between investment and commercial banking. Ironically, that reversal of the New Deal regulations that had operated successfully for 60 years, the Glass-Steagall Act, was referenced by Blankfein in his Tuesday testimony explaining how Goldman and other firms spun out of control.
When asked by Sen. Ted Kaufman, D-Del., how Goldman had morphed from a traditional investment bank backing sound business ventures to a market gambler in fanciful products, Blankfein attributed it, somewhat forlornly, to “a change in the sociology of the business that took place over the last 15 to 20 years.” He added, “I’m not sure that it was precipitated by the fall of Glass-Steagall or it caused Glass-Steagall to fall. …”
Of course there was nothing inevitable about the fall of Glass-Steagall in 1999, since it was the result of decades of lobbying by the financial industry. That change was followed by the total deregulation of financial derivatives by the Commodity Futures Modernization Act, which Rubin had pushed and which President Clinton signed into law.
Clinton recently conceded that he got bad advice from Rubin on derivatives regulation, but he still holds to the notion that the reversal of Glass-Steagall was not harmful. No one listening carefully to the day of testimony by the various Goldman executives could accept the idea that these folks can function decently without strict boundaries
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