The article states:
Fraud charges leveled against the investment bank Goldman, Sachs & Co. center on complex financial dealings. But for President Obama, the accusations against the venerable Wall Street institution offer a chance to revitalize a simple political narrative that he has all but lost in recent months: that he and his party are protecting ordinary Americans victimized by the economic meltdown.
Republicans have been notably successful in mounting populist attacks on the administration, even framing the pending legislation that would increase regulation of Wall Street as a recipe for perpetual bailouts by taxpayers. Now the Goldman case gives the administration a chance to send a countervailing message that government intervention is essential in the face of unregulated trading that favors well-connected insiders.
Treasury officials were all smiles Friday after the Securities and Exchange Commission charges against Goldman Sachs were announced. The SEC, an independent commission, contends that Goldman stacked the deck on billions of dollars in mortgage securities in favor of insiders and against unknowing investors, a charge Goldman denies.
The Goldman case comes along at a time when the Democrats need help. Obama's approval rating is tumbling and independent voters are disillusioned with his leadership. Unemployment is expected to hover near 10% nationally for the rest of the year.
Well, that's some interesting timing. All of a sudden, the SEC is filing a civil lawsuit against them? Hey, I'm not saying they don't DESERVE to have a lawsuit against them, but it is just a little curious, isn't it? (Click HERE to read the rest of this piece.)
Why do I say that? Because during the campaign, Obama and Goldman Sachs were mighty friendly. As in, Goldman Sachs was Obama's biggest corporate contributor. Yes, indeedy. Isn't that curious that he is now railing against them? I think so.
So does Bob Ostretag in this piece, Goldman Sachs, Obama, Money. As they say, follow the money:
When Obama said he wanted bi-partisanship, this is probably not what he had in mind: Democrats and Republicans in Congress speaking in a united voice against corporate executives that have been equally cosy (sic) with Democrats and Republicans.
As in: equally cosy (sic) with Senator John Warner, that bad Republican, and Chris Dodd, who presented himself as a mild progressive in the last Democratic presidential primary.
As in: equally cosy (sic) with the Fed and Treasury under Clinton and Bush. As in: pretty darn cosy (sic) with President Obama himself.
Forget the bonuses at AIG. Chump change. Let's put what Goldman Sachs has been up to in plain English. Goldman Sachs had made a lot of esoteric financial transactions with AIG. Banks were collapsing at the time, leaving their investors with huge losses. When things started looking shaky at AIG, Goldman and other investors started calling in their claims, and pushed AIG off the cliff.
Now ask yourself: with banks collapsing, why would you push the one you had put so much money in to collapse?
Answer: because you had your boys on the inside in Washington, that's why. And your boys got a bail-out package for AIG which actually paid you more than your claims that broke the bank. What investors had demanded from AIG was collateral on debts. But they actually got with the bailout was the whole damn amount, 100 cents on the dollar.
Wow, nice work if you can get it, right? And if you're Goldman Sachs, you did:
To put it even more bluntly: if AIG had managed to not collapse and not require $180 billion in taxpayer money, Goldman Sachs would be sitting today with some very very shaky investments. But since AIG collapsed, the folks at Goldman cleaned up.
Or even more bluntly: Goldman used AIG as a funnel.
That's a nice trick. It's like two guys rolling someone on the street when the first guy comes up on the right and throws a punch after which the guy on the left quietly lifts the mark's wallet. Of course you run the risk that the cops might see you. Then again, if you have the cops in your pocket...
OK, that is a simplification. It is not the whole story. But it is a big part of the story.
But but... wasn't there an election between the AIG bail-out and today? The world changed, didn't it?
Goldman Sachs employees gave just shy of a million dollars to the Obama campaign, ranking second in contributions. Citigroup and JPMorgan ranked sixth and seventh. Goldman Sachs gave Obama four times more than they gave McCain.
This is one big fat ugly chicken that is coming home to roost.
So, to be clear - when Obama claimed to be a man of the people, does he mean Wall Street people? Because that's pretty much how it's looking. And now he is openly turning against them? Oh, this should be fun to watch:
Our political attention span being what it is, we might need reminding that there was actually a big debate over this very thing last year. From my July 1 blog:
When Barack Obama pulled out of public campaign financing, I wrote a column about his money machine, noting that despite all the small Internet donors, his campaign is still mostly funded in the most traditional of ways. Numerous readers taking offense at my characterization of Obama's fundraising as dominated by "fat cats." In light of new details on Obama's fundraising which have become available, now would be a good time to revisit this issue.
I noted that that, by the end of June, Wall Street had already given Obama $9.5 million, that four out of his top five contributors are employees of financial industry giants, with Goldman Sachs at the top of the list. Even conservative New York Times columnist David Brooks was appalled: "Over the past few years, people from Goldman Sachs have assumed control over large parts of the federal government. Over the next few they might just take over the whole darn thing."
The reader response was overwhelmingly negative. The debate was over which was more significant: the half of Obama's money that came in small Internet contributions, or the half that came from big corporate money. I argued that:
adding a layer of small Internet donations (45% of Obama's money) on top of all the traditional campaign money (55% of Obama's money) does not change the game of politics and money. It just adds another layer to the same old cake. To really change the game, one would need to replace all that traditional money with small Internet donations. ... Just think through the basics: if on one side you have over a million people giving you little donations that make up 45% of your budget, and on the other side you have a handful of people giving you big donations that make up 55% of your budget, whose telephone calls are you going to take?
So here we are with the world economy collapsing and the big question is exactly this: whose calls is Obama going to take? Because both sides are calling, big time. I don't have to tell you who is winning so far.
I am just going to guess it is the Big Cats on Wall Street even as Obama and the Democrats are demonizing them in the press. How does he get them to stay quiet while he is doing that, I wonder? I'd say, follow the money, but apparently, I am more cynical than Ostertag is:
But I am more optimistic than I thought I would be at this point. The looting of the US Treasury has not gone as planned. Everything is spiraling out of control. And Americans are actually mad! Bankers are in tears (at least according to their congressional testimony). When Republican congressmen are calling for corporate execs to commit mass suicide, you know the ground has shifted.
Have things changed so dramatically that Obama will have room to dump his biggest campaign contributers (sic) overboard? That question will be answered in the coming weeks.
Now is not the time to be quiet. Now is the time to yell bloody murder. We will soon know whose call comes through the loudest.
Yes, the question will be answered in the coming weeks. My bet is that Obama will continue to rail against the very companies that helped him get into office, just like he did with the insurance companies. The Democrats will try and tie the Republicans to Wall Street, like they are currently doing with Senator Judd Gregg as he urges caution:
"We should not legislate based on anecdotal events," Gregg said. "This is a big piece of legislation, we shouldn't overreact."
The reform bill, one of President Barack Obama's top domestic priorities, is awaiting passage by the Senate. Should it pass, the bill would have to be merged with the House's version approved last year, then it would have passed again by both houses before Obama can sign it.
Ah, yes. The Reform Bill. You will NEVER believe what is in it. Essentially, the Congress is abdicating some of its oversight responsibility, and giving it - GIVING it - to the Executive Branch. Oh, you know I am not making this up:
(If the video doesn't come up, click here.) Remember when we were all worried about crap like this happening with Bush?? Obama seems hellbent on amassing as much power as he possibly can, and unfortunately, this Democratic-heavy Congress is all too willing to hand it to him. So much for those pesky little checks and balances our founders thought were important enough to put into our Constitution. You know, the document the Congress, and the President, swore to uphold? Uh huh. That one. Well, the Democrats have decided not to bother with that whole democracy thing. Whatever...
I guess that's some kind of reform - trying to change three branches of government to only two...
4 comments:
Hey Rev, I had to laugh when I read this: ”…he [Obama] and his party are protecting ordinary Americans victimized by the economic meltdown." As if he and his party had NOTHING to do with the economic meltdown to begin with!
Call me paranoid, call me a conspiracy theorist, but there’s something mighty fishy going on here. Obama’s so-called railing against Wall Street has as much substance as his railing against insurance companies, who stand to make a fortune when millions of people are forced to buy insurance from them. Of course, when they all go under because people can’t afford to purchase insurance, and the government steps in to create the public option, Obama will be long gone from the picture and won’t need the insurance companies any more anyway.
But he still needs Wall Street. So, something’s going on. Notice it’s a civil suit, not a criminal suit, so no one is going to jail. And it’s all “alleged” still, so who knows what will unfold. It’s more the whole media brouhaha that’s giving Obama and his thieves the momentum. I hope people don’t fall for it.
What I really don’t understand is the Republicans accepting giving complete control to the executive branch. Charles Krauthammer:
I think what is so interesting about the bill that is now proposed is that it is Congress once again voluntarily emasculating itself.
The bailout as proposed in the bill would allow the executive branch on its own, without appropriation from Congress, any approval from Congress, to seize, essentially seize a firm it designates again unilaterally as systematically risky, take it over, have the treasury back all of the bad loans, and then have the Fed print the money to pay them off.
... That means you get a few powerful people in Washington, secretary of the treasury, head of the FDIC. You walk into a large institution and say we might designate you systematically risky. We want you to do "x," "y" and "z." I can assure you they will do "x," "y" and "z."
And that's what happens in Putin's Russia when he takes over oil....
How is that not a bailout? How is that not giving government control of Wall Street? This country is systematically being taken over by the government, and the f’ing progressives (at least the ones around here) just nod and smile and think how great it is.
It’s getting to the point that I don’t care if I live in a cardboard box in Montserrat, but if we don’t get out of here soon, the government may not allow us to get out!!
SF, what a brilliant comment! Yes, absolutely yes, you are right on all counts. It is LAUGHABLE for Obama to rail against the very corporations that helped get him into office! And why do they put up with it? Because they'll get bailed out by the gov't - again. No mater what.
But why would Congress give up its power?? To me, that is a fundamental question. When these people fight to get there, work to amass power while in there, WHY would they then roll over and just give it away?
It is very telling indeed that it is only a civil lawsuit against GS. I think it is to give the appearance of being tough on Wall Street without having to BE tough on them...
I hear you - I want to go visit Montserrat soon, though honestly - a house near the ocean, who cannot make that work, you know?
I truly don't know why Congress would give up its power. It makes no sense at all. The only thing that makes sense is they're pretty sure they'll win back the presidency in 2012, which will give their party all the power. But the damage that will be done before then!
Greta Van Susteren made a good point. She said if the existing regulatory agency was supposed to provide oversight but the people just weren't doing their jobs, rather than create a new agency to the tune of millions of dollars, why not just fire the people who weren't doing their jobs and bring in competent people! Makes sense to me.
On another note, did you read Pundita's blog about the 40,000+ stranded American citizens who were being ignored by their own government? http://pundita.blogspot.com/2010/04/iceland-volcano-ash-us-military.html
And yes, we can certainly figure out a way to get that house on the beach in Montserrat! Dare I say it... Yes We Can!
SF, Greta nailed it- if the people aren't doing their jobs, you FIRE them, not let them keep them, and spend OUR money creating a whole other entity! WTH kind of logic IS that, anyway???? Sheesh!
I haven't read Pundita's post yet, but will. The short answer is - I am not the least bit surprised that we are dragging our feet getting them out. Hey - Obama has more important things to do, like stump for Barbara!! Ahem.
ROTFLMAO - I sure Hope we can Change our address to Montserrat. Yes, we can, Yes we can!! :-D
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