Simon Johnson On 'Real Time' (VIDEO): Broken System If Goldman Conspirator John Paulson Is Not Charged
Economist Simon Johnson appeared on Bill Maher's "Real Time" panel Friday alongside GRITtv host Laura Flanders and New Yorker editor David Remnick.
The panel covered the tea party movement and the Securities and Exchange Commission's decision to charge Goldman Sachs with fraud.
While explaining how Goldman made billions by selling bad securities, Johnson mentioned investor John Paulson.
Johnson: "They designed something intentionally complex that's basically a mechanism of transferring money from you to John Paulson. John Paulson, it is true, has not been charged with anything. But he was involved in designing the security."
Paulson, who was named in the SEC's civil fraud lawsuit against Goldman Sachs, conspired with Goldman and Deutsche bank to sell investments made up of bad loans. The New York Times reports that Paulson personally made $1 billion off of the deals.
Johnson told Maher that if Paulson avoids charges similar to Goldman, it will show how broken our system is.
"For all we know right now, it was probably [Paulson's] idea," Johnson said. "If he walks away without being charged, that just tells you there's something even more profoundly broken..."
Johnson said that Goldman would fight the lawsuit "tooth and nail" because it could open the doors for customers to file a class-action lawsuit against the firm.