More on Goldman Sachs

This is a followup on the Goldman Sachs post seen below. Good conversation on the Goldman "conspiracy theory" at Balloon Juice.

Scott Alloway

Goldman Sachs: Running the Country Since 1999

Ten months after an election that purportedly would usher in a major reversal of our national priorities, beginning with a financial empire in free-fall, the New York Times this (Sunday) morning presents an "expose" on the cozy relationship between the federal government and Wall Street's biggest power broker and the one closest to U.S. monetary policy since the late 1990s - - Goldman Sachs. Today's Inquirer editorial page also wades into this morass of insider dealings and using the largest expenditure of taxpayer money to prop up one industry in world history. Where were the Times' crack investigative reporters when this was first announced in the back pages of the national press last September? - - and even worse where were they as the Obama administration took this major scam on the citizenry to new heights?

Please skip whatever you are doing this morning, open this NY Times news story on Goldman Sachs/Treasury Secy Paulson, and then follow the rest of the trail as I tell you larger story.

These questions about former Treasury Secretary Paulson's relationship with Goldman Sachs and the bailouts surfaced when crises was unfolding, but now, almost eight months after a new administration is in place, we have a post-mortem article of this type finally making public what could have and should have been on front and financial pages while the deals were being done.

For the first time we learn that a long-term Republican representative, Cliff Stearns of Florida (frequent critic of his own party's policies) questioned the insider deal then. Would you not think that would have been a major story at the time, particularly with the conflict of interest issue widely known inside the financial sector?

Of course things were happening very fast from September to election day, but two months later a new president from the opposition party, and an entirely new administration were about to be installed to deal with these world-wide financial problems. Why not put this type of situation front and center and let a new broom really sweep clean?

But you see the Obama administration not only did nothing to reverse the involvement of Goldman Sachs types in the bailout process, as both direct and indirect recipients of the public money, they recruited more Goldman Sachs executives to run virtually every newly-created financial department that would oversee the distribution and direct of all those billions; pardon me trillions!

The New York Times newspaper, lapdog for the Obama administration and Democratic Party public relations tool, could not possibly run such a story then, as the public might learn that those very insider Wall Street types that Obama was appointing and delegating were not only some of the same ones the Bush administration used, but even more of them from the same institution were installed in key positions where they still serve. Investigative journalism, with timing when it counts, is no longer performed at the New York Times.

I think the Bush administration was largely a failure on many fronts, so don't jump to any conclusions about my point here. What you must know, and again only reported parenthetically at the time, is that the Obama election campaign received more private funding than any candidate in political history, and the largest bloc came from Wall Street. He was and is only returning the favor - - quid pro quo!

But you see Goldman Sachs has a long history in running our government as it began when another Goldman alumnus was Treasury Secretary. Robert Rubin, whom Clinton appointed was the mastermind of the financial deregulation bill that he and Clinton supported enthusiastically, with the full unquestioned participation of both parties in the congress in the form of the Graham-Leech bill. The Bill that undid all the safeguards on banking and speculation put in place during the Roosevelt years. Don't let the phony news stories fool you, deregulation of commercial enterprises begun during Regan years had nothing to do with financial deregulation. That came much, much later and was the brainchild of Rubin and Clinton after massive campaign contributions came from Wall Street insiders like Sanford Weil of Citibank; another Rubin creation.

For you see, the Democratic and Republican parties are identical in what they really do, and who they really answer to. There are as many fat-cat Democratic business leaders today as Republicans. What you witness daily is a smoke-screen that keeps the illusion alive that there is a dime's worth of difference between them when it comes down to it. If anything the Republicans are less hypocritical, as they make it clear that government money helping industry and management at the top will "trickle down" and benefit everyone. The Democrats claim to fund the needs of the people directly, but in point of fact, they are also using a "trickle down" program as they piss on your shoes.

Jim Foster
Publisher,
Germantown Newspapers Inc.
5275 Germantown Avenue
Philadelphia, Pa. 19144
215-438-4000

Trickle Down Economics, Obama Style

The major irony in what the Obama administration has done with the financial world is that its the ultimate in "Trickle Down Economics." I guess Ronald Reagan would be proud.

The major difference between the financial rescue programs of Roosevelt "New Deal" economists is in who were the intended beneficiaries and what the spent government money would create.

The New Dealers did not bail out the bankers and the banks wholesale as Obama did, just the opposite, they gave security to the bank's depositors in federal insurance on their money, not the bank's capital. They gave credibility back to banks by making sure no one confused an insured bank with an uninsured stockbroker, or insurance company. Now, some may not have agreed with the approach, but the Democrats in those days did target the common folks first, not the big players.

Where they did make big deals, the deals were so big and so comprehensive that their was no way they would not have long-term positive effects and benefit the largest possible number with visibility. The dam projects, the TVA, the massive federal buildings and courthouses that are still in use to this day in their original configuration were most often masterpieces of planning and execution and kept many employed for years doing things no one could deny were having a long-run impact on society. In some cases the federal government quietly backed loans to private industry if the project would have enough long-term public use and keep unemployment down in specific areas. The electrification of the Pennsylvania Railroad from New York to Washington and west to Harrisburg was such a private industry project with a public benefit. The Roosevelt administration kept its participation in that one fairly quiet as the Railroad was run by Republicans, the banks whose loans they guaranteed in Philadelphia were run by Republicans, and a significant number of workers who benefited were Republicans, as Philadelphia at that time was blue-collar Republican town.

Obama and his folks gave your big tax money to the reckless bankers and hope it will "trickle down" to John Q Public. They spread stimulus money around in the dark in projects of little permanent significance, and now put Frankford Avenue used car salesmen to shame. "Cash for Clunkers" is the most wrongheaded, environmentally unfriendly, class-demeaning piece of federal nonsense since prohibition.

Jim Foster
Philadelphia, Pa. 19119

Where Are the True Liberals?

Yes, you can still read about the atrocities on the back pages and in sideline reporting in the mainstream media. How many of you know that in the last few days another Russian investigative reporter was found in her apartment elevator with a bullet to the head and another “just to be sure?” This woman had the audacity to write - from personal experience - of atrocities in Chechnya and other probing articles about a Russian government that moves back to the “good old days of Uncle Joe” further and further while we make nice with a robot front man in a country run by a KGB operative who is a true cold war believer.

China still executes political prisoners regularly and often without trial, but just this week another large group of lawyers in China had their licenses to practice law revoked because it was determined by the national leaders that they put too much time into sensitive cases and allowed access to the foreign media. Let’s not forget how uprisings in Chinese provinces get squashed with fatalities and injuries falling into an “undetermined” category. Internet access is government controlled with the primary assistance of U. S. service providers.

Women are stoned to death with regularity in countries who we now think are worthy of “regular dialogue” and inclusion in the larger economic world and Britain is actually considering legalizing the replacement of British Common Law with Sharia Law in communities where the Muslim population is significant.

But none of this is important anymore, for we are now a “global community” and whether the message comes from the political right or left, from our Democratic president or minority Republican leadership, it is “Internationalism Uber Alles” when it comes to both foreign and domestic policy and hundreds of thousands, no millions, can be slaughtered in Africa while a handful of U.N. troops look on with direct orders they are to do nothing and make no calls for reinforcements. It makes no difference that a Marine Expeditionary Force is 20 minutes away by helicopter where the finest trained and equipped troops in the world could have stopped the majority of the bloodshed almost instantly.

The “Liberals,” as a group and the PARTY OF THE PEOPLE who long claimed support and broader concern for humanitarian international issues, now transform those interests to international trade and the movement of money. Prioritizing international human rights and trade with only those who respect them are now anachronisms from the recent past. 400,000 Americans died from my father’s generation creating the government that would lead the world by example. Another 100,000 from mine did so in Korea and Vietnam trying to implement that policy with very mixed results, but we were promised that diplomacy would replace the military approach and a more sophisticated foreign policy would do a much better job and do it without regular loss of life in the process.

INTERNATIONAL MONEY EXCHANGE is the idol now worshiped from all political and government quarters and for the most part the idealistic young activists and true believers of the postwar years have surrendered to the notion that top down power with little true democratic participation and fraudulent excuses for elections will suffice. It is now okay to move the goal posts anytime it avoids tough decisions and rationalizing the terrorist behavior of governments we do business with replaces a philosophy of self-sufficiency and self-determination first and foremost - - and trade and foreign exchange only with those whose actions match their propaganda.

We have been here before. The “Economic Miracle” of Germany 1932-36 got Hitler on the front page of Time, not once but twice. The New York Times worshiped Stalin’s “Five Year Plans” and one of their top journalists got the Pulitzer Prize for his work defending the man who is in a race with Mao for the record of how many millions were slaughtered or starved for not following their party line.

We have come full circle. Do we need to be a world financial center so badly that we will compromise our ability to produce what we need and instead export most of those needs to parts of the world that will use those dollars only to further exactly what we do not stand for? American toys and T-shirts build the Chinese Navy. Our imports fund South American dictators. International oil revenue keeps radical Muslim jihad schools funded worldwide.

Sure, we cannot be the world’s policeman, but we sure can stop the race to fund all the political and social evils we know exist with the earnings of the very same liberal Americans who claimed their philosophy would be the one that would never allow the atrocities of the past a chance at reincarnation.

Jim Foster