Apparently, Rolling Stone's Matt Taibbi will not rest until some Goldman Sachs executives are behind bars. He will not rest until the tarnished company's reputation lies in tatters on the floor. These goals are admirable. Give Taibbi an 'A' for effort. Unfortunately, these noble goals, as much as we might hope for their fulfillment, are unachievable.
Taibbi's latest indictment, The People Vs. Goldman Sachs, lays out the case for the prosecution, which comes from the 650-page report of Senator Carl Levin's Senate Subcomittee on Investigations.
The great and powerful Oz of Wall Street was not the only target of Wall Street and the Financial Crisis: Anatomy of a Financial Collapse, the 650-page report just released by the Senate Subcommittee on Investigations, chaired by Democrat Carl Levin of Michigan, alongside Republican Tom Coburn of Oklahoma. Their unusually scathing bipartisan report also includes case studies of Washington Mutual and Deutsche Bank, providing a panoramic portrait of a bubble era that produced the most destructive crime spree in our history — "a million fraud cases a year" is how one former regulator puts it.
But the mountain of evidence collected against Goldman by Levin's small, 15-desk office of investigators — details of gross, baldfaced fraud delivered up in such quantities as to almost serve as a kind of sarcastic challenge to the curiously impassive Justice Department — stands as the most important symbol of Wall Street's aristocratic impunity and prosecutorial immunity produced since the crash of 2008.
Goldman CEO Lloyd Blankfein testifies before the Senate. Unfortunately, it is unlikely that Lloyd will end up in jail, and even if through some cosmic accident he should see some jail-time, he would no doubt serve his time in a country club. Thus, tragically, it is unlikely that anyone will be butt-fucking Lloyd anytime soon.
... Goldman, as the Levin report makes clear, remains an ascendant company precisely because it used its canny perception of an upcoming disaster (one which it helped create, incidentally) as an opportunity to enrich itself, not only at the expense of clients but ultimately, through the bailouts and the collateral damage of the wrecked economy, at the expense of society. The bank seemed to count on the unwillingness or inability of federal regulators to stop them — and when called to Washington last year to explain their behavior, Goldman executives brazenly misled Congress, apparently confident that their perjury would carry no serious consequences.
Thus, while much of the Levin report describes past history, the Goldman section describes an ongoing? crime — a powerful, well-connected firm, with the ear of the president and the Treasury, that appears to have conquered the entire regulatory structure and stands now on the precipice of officially getting away with one of the biggest financial crimes in history.
Unfortunately, Taibbi must admit that lack of past prosecutions does not bode well for the future.
To date, there has been only one successful prosecution of a financial big fish from the mortgage bubble, and that was Lee Farkas, a Florida lender who was just convicted on a smorgasbord of fraud charges and now faces life in prison. But Farkas, sadly, is just an exception proving the rule...
And then Matt goes on to explain that Lee Farkas is not a Big Fish, he is a Small Fish. But the more fundamental problem was described by Michael Lewis, whom I quoted a long time ago in Why I stopped Reading Baseline Scenario. There is a good reason why the bank seemed to count on the unwillingness or inability of federal regulators to stop them. This next quote is from Lewis' Bloomberg commentary Bashing Goldman Sachs Is Simply a Game for Fools, which is written from the point of view of a Goldman insider.
Today, the sheer volume of irresponsible media commentary has forced us [at Goldman] to reconsider our public-relations strategy. With every uptick in our share price it’s grown clearer that we who are inside Goldman Sachs must open a dialogue with you who are not. Not for our benefit, but for yours.
America stands at a crossroads, and Goldman Sachs now owns both of them. In choosing which road to take, ordinary Americans must not be distracted by unproductive resentment toward the toll-takers. To that end we at Goldman Sachs would like to dispel several false and insidious rumors.
Rumor No. 1: “Goldman Sachs controls the U.S. government
Every time we hear the phrase “the United States of Goldman Sachs” we shake our heads in wonder. Every ninth-grader knows that the U.S. government consists of three branches. Goldman owns just one of these outright; the second we simply rent, and the third we have no interest in at all. (Note there isn’t a single former Goldman employee on the Supreme Court.)
Here's a video of the Daily Ticker's Henry Blodget and Aaron Task interviewing Taibbi about his latest effort to kill the Giant Vampire Squid.
Good luck, Matt!
Goldman should be recognized for the criminal enterprise it is, under RICO, and dismantled. Hey I can dream can't I?
Posted by: deepfreeze | 05/20/2011 at 11:12 AM