The Shine Comes Off Of Goldman Sachs

(AP Photo/David Karp)

The cover of the most recent issue of New York magazine features an illustration of a giant masked man holding a bag of money. The man towers over the tiny people below, who are offering up what appears to be futile resistance.

Across the middle of the page are these words: "Is Goldman Sachs Evil?"

That's the sort of question that was not being asked in polite company before the economic downturn. Back then, Goldman was seen as one of the prime drivers of capitalism, a company staffed by men whose generous compensation was justified by their role in helping power the economy to never before seen levels – something that brought wealth to millions of Americans.

That was then. And this, it seems, is now. Matt Taibbi's began his July "Rolling Stone" story on Goldman by writing that "the world's most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money."

That's just the opener: Taibbi goes on to blame Goldman for essentially creating numerous economic bubbles and busts in service of the greedy ends of its "gangster" employees, who manipulated everything from tech stocks to gas prices with little concern for what effect their reckless speculation might have on the rest of us.

Taibbi's article was knocked in some quarters as na?ve and reactionary –"a joke" written by "the Sarah Palin of journalism" – and some of the criticisms are legitimate. But even if one can quibble with the details, it's undeniable that Taibbi tapped into a populist rage against a company unused to such negative attention. And the fact that the story appeared in a pop-culture magazine – the Jonas Brothers graced the cover – meant that the negative portrayal spread well beyond the business community.

The New York Magazine cover story, by Joe Hagan, is less incendiary than Taibbi's piece, and more narrowly focused. It zeros in on the fact decision to bail out AIG – made in large part by former Goldmanites Hank Paulson and Lloyd Blankfein – was also a decision to bail out Goldman, which got $13 billion from AIG as a result of the bailout. The AIG bailout came on the heels of the decision to let Lehman Brothers, one of Goldman's former competitors, die.

The infusion of taxpayer money meant that Goldman would be able to stay above water instead of potentially being sunk by its ties to AIG. Now Goldman is reaping record profits -- $5.1 billion so far in 2009 -- as many Americans struggle to get by.

Former New York governor and attorney general Eliot Spitzer is also sounding the anti-Goldman bell. Appearing on MSNBC, Spitzer criticized the Federal Reserve for using the AIG bailout to give "tens of billions of dollars that went right through – conduit payments – to the investment banks that are now solvent."

"[Taxpayers] didn't get stock in those banks, they didn't ask what was going on – this begs and cries out for hard, tough examination," he continued, complaining of "a Ponzi scheme, an inside job."

All this has led to more scrutiny of a company that has long been a mystery to most Americans. Because Goldman operates as both a trading house and "a fee-based adviser to the companies being traded," as New York Magazine puts it, some have begun characterizing the company as a player that has essentially gamed the system – an entity that knows "every hand at the table and using that information to enrich itself at the expense of others."

As a result of all this negative attention, Washington has begun to move away from Goldman, at least in public. Here's New York Magazine's Hagan:

Out of political necessity, all of Washington appears to be turning a cold shoulder toward Goldman. A senior Obama-administration official close to Tim Geithner declares that "Goldman has left the building." Onetime Goldman lobbyist and now Treasury chief of staff Mark Patterson has taken a public beating for his connection to the firm. And John Thornton, a former president at Goldman Sachs, was passed over as ambassador to China because his relationship to the firm "concerned" the Obama administration, says a person familiar with the situation. "It used to be if you were a senior Goldman person and you were considered for a position, you'd have an advantage," this person says. "Now it's clearly a disadvantage."

It remains to be seen what effect all this will really have; the Obama administration is still brimming with ex-Goldman staffers and allies of the company, and Hagan writes that Goldman "probably still has the nod and the wink it needs to continue to rake in profits with impunity." But even if the bonuses keep rolling in, Goldman employees seem to have lost much of their reputation as a force for good in the economy – and that's something that can't easily be bought back.

[aNewEraBegins]

We have Stockholm Syndrome and the banks are our captors. Listen to how everyone always kinds of objects to the bailouts and how they actually tell you they didn't want to do it. There is a constant justification for what they know to be an immoral act. It's collective Stockholm Syndrome. You'd see the same kind of thing in Patty Hearst when she was abducted by bank robbers and started working with them. WAKE UP! They're enslaving our children with all their bad loans AND taking a pound of flesh whenever they can.

If we would have taken all the money used in the crisis we could have BOUGHT every mortgage and credit card bill in the entire country! Instead we let Paulson extort the money by saying "otherwise the system will crash". NO, No.... Paulson you were a Goldman CEO.... you and your banksters EXTORTED the money from us.

Paulson doesn't even use e-mail. What does that tell you about the man.

Are we debt slaves?

http://www.youtube.com/watch?v=-vzVsxE98ZE

[gunnyh1]

Henry Paulson pulled off the biggest con game in the world's history. He took an oath of office, like anyone that serves in government or military, he violated that oath and should be skewered alive for it. This lump of s^*& makes Madeoff look like a child.

[habu99-2009]

Masters-of-the-universe finance goons may pan Taibbi's Rolling Stone article, but the fundamentals of his assertions are sound: GS enjoys a special status with so many of its alumni now in government making monetary policy decisions, while simultaneously still holding stock in GS. I don't want to hear Wall Street whine anymore about how the housing bubble bursting caught them by surprise...it's an outright lie, and GS now feeds from the government trough while simultaneously recouping its losses from outfits like AIG who still owe them billions. All of this coupled with massive bonuses to people who in any other sector of the economy should be happy just to still be employed after screwing the pooch so bad. If there were any justice in the world, these swine would be stripped of all of their assets to pay for their malfeasance. But instead, it's business as usual, new jets and homes in the Hamptons while so many others worry about paying the mortgage.

[ucjb]

Goldman Sachs is the evil empire. Goldman's former employees have infiltrated the U.S. finances. The AIG bailout was a Goldman bailout by proxy. What a deal Goldman got, they bundled-up these worthless securities (they knew they were worthless) bought insurance from AIG because Goldman knew they needed the insurance. AIG could not meet it's obligations so to save Goldman, Paulson saved AIG so AIG could repay Goldman in full with our tax dollars. Now, the Goldman banksters having taken the American public for a ride, will pay out billions in bonuses after driving up oil prices and the markets in general. Goldman has 2 advantages, they can manipulate the markets and people on the inside who will protect them. U.S. Treasury? and Federal Reserve? are registered trademarks of Goldman Sachs? and wholly owned and operated by Goldman Sachs?

[PacificGatePost]

Isn't it time the system went in for some much needed repair???Due diligence and oversight long ago slid out the window. No one was watching.??

A dramatic change swept through all of North America's boardrooms over the past 30 years. It is one of the underlying causes of the headache the economy is now feeling, but more importantly, it has resulted in the general feeling of "disconnect" by most Americans from the billions in bonuses being paid to too many on Wall Street who produce absolutely Nothing.??

Time to send them a letter .....??

http://pacificgatepost.blogspot.com/2008/03/letter-to-ceos-of-fortune-1000-cos.html

??...... been there, done that, it's Really needed.

[Lingo2]

And we stand and watch as the President and congress gives these fools more billions to squander.

> 545 People
> By Charlie Reese --
> Politicians are the only people in the world who create
> problems and then campaign against them.
>
> Have you ever wondered why, if both the Democrats and
> the Republicans are against deficits, we have deficits?
>
> Have you ever wondered why, if all the politicians are
> against inflation and high taxes, we have inflation and
> high taxes?
>
> You and I don't propose a federal budget. The
> president
> does.
>
> You and I don't have the Constitutional authority to
> vote on appropriations. The House of Representatives does.
>
> You and I don't write the tax code, Congress does.
>
> You and I don't set fiscal policy, Congress does.
>
> You and I don't control monetary policy, the Federal
> Reserve Bank does.
>
> One hundred senators, 435 congressmen, one president,
> and nine Supreme Court justices -- 545 human beings out of
> the 300
> million -- are directly, legally, morally, and
> individually responsible
> for the domestic problems that plague this country.
>
> I excluded the members of the Federal Reserve Board
> because that problem was created by the Congress. In 1913,
> Congress
> delegated its Constitutional duty to provide a sound
> currency to a
> federally chartered, but private, central bank.
>
> I excluded all the special interests and lobbyists for a
> sound reason. They have no legal authority. They have no
> ability to
> coerce a senator, a congressman, or a president to do one
> cotton-
> picking thing. I don't care if they offer a politician
> $1 million
> dollars in cash. The politician has the power to accept or
> reject it.
> No matter what the lobbyist promises, it is the
> legislator's
> responsibility to determine how he votes.
>
> Those 545 human beings spend much of their energy
> convincing you that what they did is not their fault. They
> cooperate in
> this common con regardless of party.
>
> What separates a politician from a normal human being is
> an excessive amount of gall. No normal human being would
> have the gall
> of a Speaker, who stood up and criticized the President for
> creating
> deficits. The president can only propose a budget. He
> cannot force the
> Congress to accept it.
>
> The Constitution, which is the supreme law of the land,
> gives sole responsibility to the House of Representatives
> for
> originating and approving appropriations and taxes. Who is
> the speaker
> of the House? She is the leader of the majority party. She
> and fellow
> House members, not the president, can approve any budget
> they want. If
> the president vetoes it, they can pass it over his veto if
> they agree
> to.
>
> It seems inconceivable to me that a nation of 300
> million can not replace 545 people who stand convicted --
> by present
> facts -- of incompetence and irresponsibility. I can't
> think of a single
> domestic problem that is not traceable directly to those
> 545 people.
> When you fully grasp the plain truth that 545 people
> exercise the power
> of the federal government, then it must follow that what
> exists is what
> they want to exist.
>
> If the tax code is unfair, it's because they want it
> unfair.
>
> If the budget is in the red, it's because they want
> it
> in the red.
>
> If the Marines are in IRAQ, it's because they want
> them
> in IRAQ.
>
> If they do not receive social security but are on an
> elite retirement plan not available to the people,
> it's because they
> want it that way.
>
> There are no insoluble government problems.
>
> Do not let these 545 people shift the blame to
> bureaucrats, whom they hire and whose jobs they can
> abolish; to
> lobbyists, whose gifts and advice they can reject; to
> regulators, to
> whom they give the power to regulate and from whom they
> can take this
> power. Above all, do not let them con you into the belief
> that there
> exists disembodied mystical forces like "the
> economy," "inflation," or
> "politics" that prevent them from doing what they
> take an oath to do.
>
> Those 545 people, and they alone, are responsible.
>
> They, and they alone, have the power.
>
> They, and they alone, should be held accountable by the
> people who are their bosses -- provided the voters have
> the gumption to
> manage their own employees.
>
> We should vote all of them out of office and clean up
> their mess!
>
> AMEN !!!
> _______________________________________________

[sjc_1]

Ex Goldman CEO and former Treasury Secretary Paulson made sure they got a windfall. He has stock and options worth $400 million in Goldman and he used tax payer money to make sure it stayed worth that much. We should never allow a public official do this, but he did and no one said a thing.

[vuenbelvue]

Perfect example of the Golden Rule. Those that have the gold make the rule. The real wonder I have with BOA lobbying Capital Hill with $1.5 million is that "That is all it takes" to re-coup up to $45 billion. The congressman maybe should be charging more and putting anything over $10,000 back into the treasury. Don't give it away for free.

[broadwayphi]

CEOs and other fat cats gobble up 1/3 of US pay:

Highly paid employees received nearly $2.1 trillion of the $6.4 trillion in total U.S. pay in 2007, the latest figures available. The compensation numbers don?t include incentive stock options, unexercised stock options, unvested restricted stock units and certain benefits.

The Wall Street Journal based its analysis on Social Security Administration data, which doesn?t count billions of dollars more in pay that remain off federal radar screens that measure wages and salaries.

Next, it turns out that Bank of America, which received $45 billion in taxpayer-funded bailout support, has spent more than $1.5 million lobbying on Capitol Hill.

[azure13]

Good thing McCain suspended his campaign in order to push the bailout through for his buddies.

[pattielou]

In 2008 Goldman Sachs gave 75% of their political donations to Democrats.