The Teflon Firm, The Golden Ones—Goldman Sachs

A number of well-known financial firms are now under investigation for mortgage practices, among them Merrill Lynch, Morgan Stanley, and Deutsche Bank.

Guess what firm is not on the list? Pick the premier financial firm, the one with the most connections, the one that could be said to be the leading edge of “shock” capitalism. “Goldman Sachs,” you say? Yup, you got it.

Andrew Cuomo, Attorney General of New York, is looking into how all this toxic waste was cleverly bundled in SIV’s, CDO’s….

Now read Ben Stein’s little complaint about Goldman Sachs. Goldman was aggressivly pushing the stuff even as it shorted it! How innovative of them!

The point to bear in mind, as Mr. Sloan brilliant makes clear, is that as Goldman was peddling C.M.O.’s, it was also shorting the junk on a titanic scale through index sales—showing, at least to me, how horrible a product it believed it was selling.

Just as Merrill Lynch once pushed dot.com garbage precisely at the time its analysts were pronouncing it worthless, just as Merrill Lynch is suspected of again doing the same, so Goldman Sachs has done it on a far grander scale.

Now, I do not share Ben Klein’s philosophy—being of a far more liberal bent—but Ben, kudos…an honest conservative. No flies on you. Ben goes further in his complaint:

HERE is a query, as we used to say in law school: Should Henry M. Paulson Jr., who formerly ran a firm that engaged in this kind of conduct, be serving as Treasury secretary?

How does Goldman Sachs do it? Well, there is one answer: Connections work. It is not for naught that Goldman Sachs has sired Secretaries of the Treasury, advisors to Presidents, governors… Read this little primer of Goldman Sachs, appearing in none other than Foxnews.

As the cheery Fox story puts it:

“I think what it does is creates a very strong voice for the role of the worldwide capital marketplace,” Langevoort said.

Oh, my. And, the Fox writer tells us that these altruistic scions of the financial world have gone on to public service because they want to give something back to the world that has been so very generous to them. Why Paulson has given $100 million to an environmental fund! Now, you would think, that should warm my green little heart. It doesn’t. It is all a p.r. game.

Yes, Paulson is “green”; Paulson is in charge of how to rescue the world from the financial toxic waste his former employer diligently spread around the world. Paulson, it is, who replied to Krugman, that perhaps financial innovation got ahead of regulation.

Nonetheless, Paulson would not have it any other way. Slippery slopes make slippery monsters.

And when those monsters are those in charge, those who design the game, play it, win it, and then reset the board with perhaps different rules, then we know we are in trouble. Keep the money rolling. The board will be reset; new rules; new game…but really the old game in a different form.

Why isn’t Goldman Sachs on Cuomo’s agenda? Merrill Lynch is now an easy target, with its CEO now in disgrace with his golden parachute. Deutche Bank, too, is in trouble; so, too, is Morgan Stanley. The rule is: If you lose money, then you are shark bait. Goldman played the game much better: It kept the money rolling in.

Again, why is Goldman Sachs not on Cuomo’s agenda? Because, fuzzy little liberal that he is, Cuomo goes after only guys already hit, already money losers, whose p.r. is now tarnished. It is all part of the game. Besides, teddy bear Cuomo knows where the real power is–and he is not tangling with that monster.

If Cuomo does not add Goldman Sachs to his list, I put Cuomo right up there on the slippery monster dias with Paulson. Let’s call him “Igor.” Goldman Sachs is the premier lobbyist, the granddaddy of them all. Is it any wonder, as Stein implies, that conspiracy theories surround this god of lobbyists?

When will we ever have public servants that actually look after the public’s interest?