The young man from New Mexico who came to replace our air conditioning unit last week had a simple explanation for the baffling goings-on in Washington DC. “It’s the street gangs,” he said. “They’re all members of different street gangs, but when they get that high up they wear jackets and ties.”
When I mentioned the remark to my neighbor, Ricky, he nodded in agreement.”It’s not the left or the right that matters (in politics),” he said. “It’s the politicians’ employers.”
Ricky’s comment resonated with me because I had expressed similar suspicions to my wife, Sandra. She was understandably indignant. Was I nuts? This is America, the land of her birth. The cradle of democracy. The hope of the free world. I was abashed. After all, it was this very vision that had made me adopt America as my home. Long live freedom! Long live liberte, egalite, fraternite!
But how do you reconcile that vision of America with today’s news of Goldman Sachs’ obscene profits?
Already the nation’s most powerful financial company before the credit crisis, the bank (Goldman Sachs) profited handsomely from Wall Street’s rally and the recovering credit markets during the second quarter and distanced itself from the few competitors still standing.
The result was a stunning profit of $2.7 billion — even as the bank repaid $10 billion in federal bailout money. The total blew past what Wall Street analysts were expecting.
Goldman pulled off a remarkably speedy recovery from last fall, when it lost $3.3 billion in four months during the worst of the financial crisis. And it had its best quarter since the end of 2007, when the recession was just beginning.
The results also confirm that despite controversy over everything from its role in the meltdown and the bonuses it pays executives and even the power of its alumni who sit at the highest levels of government, one thing remains constant: Goldman knows how to make money better than anybody else on Wall Street.
I’ve been nattering on in these blogs for months about the billions in taxpayer money that was going to Goldman Sachs and other well connected Wall Street companies. And I was bothered by the fact that Goldman Sachs alumni were running the bailout program.
Here’s an excerpt from an October blog:
Everywhere I look in this murky mess, I see the shadow of Goldman Sachs. That’s where Neel Kashkari – the Treasury Department official who will reportedly have the job of running the $700 billion bailout – used to work, for example. And not only was Treasury Secretary Hank Paulson the firm’s chief executive but his former No. 2, Robert Steel, was vice chairman of Goldman. Another former Goldman Sachs executive, Karthik Ramanathan, serves as director of the government’s Office of Debt Management.
It looks to me as if the $700 billion package might not bail out the financial system, after all, but it will probably bail out Goldman Sachs. The irony is that I think it was someone at Goldman Sachs who started bundling risky mortgages and slicing the bundles into “tranches” that could be sold like stock.
A Huffington Post article by Ann Pettifor, an economist, author and analyst of the global financial system, left no doubt in my mind that hanky-panky was involved.
According to Ms. Pettifor:
The U.S. administration has itself been hijacked, and America is now, effectively, a Bank-Owned State. Democracy has been usurped by what Abraham Lincoln called “the Money Power.”
Thanks to the 2008 heist, $700 billion of Troubled Asset Relief (TARP) funds was siphoned out of taxpayers’ pockets and into bank coffers. The heist was pulled off in classic “Shock and Awe” style, with virtually no questions asked….
I know it’s confusing. And I know the media have stopped trying to find out just where the bailout billions went. And I know that we’ve heard nothing recently about the hundreds of promised prosecutions connected with the mortgage meltdown and subsequent tax bailout. Juicier scandals have emerged to distract the press and the public. But so many questions remain unanswered. Someone should demand answers. We shouldn’t let the street gangs get away with another daring daylight robbery – even if the gangsters are wearing jackets and ties.