When the Goldman Sachs Boys Celebrate, My Fury Meter Goes Way Up

Here's what Eric Dash of the "New York Times: wrote this week about the payment that Geithner permitted Goldman Sachs to make, thus liberating themselves from the cold and clammy hand of TARP:

"None of the banks' executives crowed publicly, but some of their employees celebrated Tuesday night. At an outdoor cafe on Stone Street, near Goldman's headquarters in Lower Manhattan, Goldman employees toasted their freedom."

"This one's on me," one called out from his table.

"Yeah, as long as it's not on the government," a colleague replied."

Those dudes are too smart for public crowing. But their private crowing is the problem. There is something fundamentally wrong going on here. When Goldman and the rest of the manipulators showed up destitute at the door of the Treasury, and when Treasury agreed to open the discount window to a non-bank (the first time since the Great Depression), and to inject billions of cash into their coffers, it was an extraordinary moment.

I mean, let's get real. The people who run these institutions privately mock the bureaucrats who work for the government. And what do these institutions spend most of their waking hours doing? Figuring out how to get around the government. How to thread the needle of regulation; how to push to the seductive, beckoning edge of legality; how to three-card-monty billions around the world to get the most favorable tax treatments (which, in effect, steals from the very government upon whose largesse Goldman et. al. relied upon last fall.)

Weren't they supposed to use those funds to lend, to put liquidity back into the system, not to crawl back to sufficient capital requirements that now allow them to "toast their freedom?" Don't you think there's something massively wrong with these Masters of Arrogance paying off their debt with a little bit of interest, puffing out their chests to their former levels of self-inflation, and re-commencing their old ways, albeit with a bit less recklessness?

The bailout was unprecedented. We had all the chips; Goldman and JPMorgan had none. We could and should have set very specific metrics for the use of these funds: how much had to go to small business lending, for example. Or to student lending. Or to reducing mortgages for those in or near foreclosure risk. We live in the most technologically advanced society in history; surely if you can track the moment-by-moment movements of your fresh lobster on the Fedex website, these geniuses at Goldman who were able to create complex instruments that defied comprehensibility are able to track the movements of the fresh supply of capital that was delivered to them courtesy of you, me, and the Fedex driver. I'd also like to see how much of our money they are spending on lobbyists and PR flaks.

I'm not saying that the Treasury Department should micromanage Goldman and others who got bailout money. But there's a space as big as a 15 room, $25 million dollar Park Avenue apartment between micromanaging and sending them back to their old tricks, rapacious and ungrateful as ever. Surely there were some modest quid pro quos that the government could have extracted when it had its foot on Blankfein's throat.

It would be easier to dial-back my anger if their hubris wasn't worn with the flash of one of their favored Franck Muller watches. You see, I'm not asking for much. I just want to be able to log onto Goldman's website and see where the money went. But I can't do that. In fact, I can't even go to the Goldman website and find a word of thanks to us - the American taxpayer - for lending them money when they needed it most. All I find is the same self-serving crap that was there during the worst of the Period of Grand Excess. Goldman's management lacks the decency and sensitivity to make a simple statement acknowledging the TARP payback, recognizing that the American system came through for them at a precarious moment, and humbly accepting the new level of social responsibility that places upon them.

Even the French understand the power of "thank you." It might be merely ceremonial, but at least they had the public decency on Sunday, at the 65th anniversary of D-Day, to recall the sacrifices that we made on that brutal June day in 1945. A few days later, the Goldman version of thanks was to write a check and party.

We have no reason to believe, absolutely no reason, that -- other than for a few regulatory niceties -- it won't be business as usual for Goldman. I'm not conspiracy-minded, but with their cross-party alumni armada - Rubin, Paulson, Kashkari - and now with Arthur Levitt, former head of the SEC as an advisor - they won't be back in their gross, unimpeded glory.

The dodgy dealings of one Goldman board member, Stephen Friedman, speak for themselves. (This is from BusinessInsider.com)

"New York Fed and Goldman Sachs board member Stephen Friedman purchased 37,300 shares of Goldman Sachs stock in December at the same time as Goldman received permission to convert to a bank holding company regulated by the Federal Reserve. Friedman at the time was also overseeing the selection of a New York Federal Reserve President to replace Tim Geithner, and the New York Fed ended up hiring another alumni from Goldman Sachs."

The young studs at Goldman "toasted their freedom" this week. Were they also toasting their liberators, like the French did? I don't think so.

Comments

[sanych]

It is not Capitalism.

Multi-national corporations, especially financial institutions, control our government, set country's policies, and act with total impunity. These companies, which are only on the face are owned by shareholders, are controlled by their management and, thus, in reality are owned by the management. The management decides which politician gets companies' PAC money and gets elected, who is selected as a judge, who regulates their business and monitors compliance with the law, who is selected as President's adviser, etc. Management class is the ruling class of this country now.

Until the power of these few is not broken and "one man, one vote" principle is not upheld, the country will continue to pay.

http://change-congress.org, http://greattask.org

[TheLastWallStreeter]

Goldman didn't want TARP in the first place - they were forced to take it. Not surprised they are happy to be out from under it. Also, you suggest that the government should have required small business lending and mortgage modifications with the funds - great ideas, but just one problem, Goldman doesn't do small business lending or give people mortgages, they never have.

[butterfliesblossom]

The problem is, do we believe you.I don't think corporate America has a lot of scruples. Take Citi for example who claimed that the government requested they merge with Morgan Stanley. It turns out that wasn't true.

Guess who is pushing us toward Socialism? Not Obama, CEO's has proven that Capitalism is not working: Fraud and greed is rampant. Best said by Stiglitz " Today only the deluded would argue that markets are self-correcting or that we can rely on the self-interested behavior of market participants to guarantee that everything works honestly and properly”

According the last survey 80% of Americans believe CEO"s make too much. Seventy four percent think corporate America is corrupt. Further, if corporate America owns Congress (which it seems to do) then time for more substantial change not only in corporate America but in Congress as well. Through history political philosophy has changed many times here in America and throughout the world; when does it change? When the rights of one group is trampled or abused by another group?

[Halsey]

so very sadly moUSA...I have to agree...on this front..Oba­ma has disappointed me greatly (ummm would McCain have done better...j­eezus..per­ish the thought)..­.but the adage..not­hing changes if nothing changes...­holds true.. Adam Hart (author of post)...rh­etorically asked several questions.­.and every answer is yes yes...yes.­..Sadly, and with embarrassm­ent..I am employed IN financial servicies.­.albeit..w­ithout a Wharton or U of Chicago MBA...I am pulp on the "lords of wall street scale"...H­ubris cannot begin to describe "these" people. so many should not only have had assets siezed..bu­t at this very moment...b­e in prison (not jail)...fo­r bilking the world..Mad­off got his..and he bilked individual­s..Goldman­...screwed the world...an­d toasts. Everything is so wrong, corrupt, incestuous­... Hate is an ugly, self-defeating emotion...­yet, many times I do feel a viseral hatred toward these insults to humanity..­.arrogance­...ha...we­'ve got to come up with another word... Geitner...­weak and frankly embarrassi­ng...Obama­...is he THAT naive? how can he not see the crap that is still being pulled. If I were younger I'd leave this "industry"­...but have no other skills..an­d honestly do care for my clients...­and worry about how anyone else might handle their investments. Mr. President, who will never read this...sur­e..your plate is full and you didn't ask for this mess..but you DID run for President.­.and by gawd you've got to make some fast, drastic changes...

[US1st2009]

well said. I am stunned by the arrogance and rapacious gluttony of Goldman Sachs and their close little circle that frankly controls far too much of our government as was detailed by the NY Times in their 4/26/09 article "Geithner, Member and Overseer of Finance Club ." It would be far too easy to go on and on about how smug they all are from Blankfein and the rest that are listed as "Mr. Geithner's World" in the article's incredibly telling graphic. What this article/post doesn't address is the disgusting way that Goldman Sachs executives shuttle in and out of key government positions long enough to change policy to directly benefit themselves personally such as when Blankfein was in the original TARP meetings with Geithner and Paulson where they decided how they would kill Lehman and fund AIG so Goldman would get their billions out of AIG in addition to getting the bailout dollars and many other sources of government taxpayer dollars. These guys are financial terrorists pure and simple. They tanked our economy with CDOs, CDSs, and "financial engineering" which was and is really privatized gain and socialized pain. They should all be investigated and in prison for causing the greatest transfer of wealth in history, upward, untraceable, unaccounted for, and into their personal accounts, and the greatest pain and suffering this country has experienced since the Great Depression and the worst is yet to come.

[Fleurdamour]

"Even" the French? I think YOU owe France an apology for that one.

[02bmw76]

Great article. Thanks for highlighting the hypocrisy that illuminates the collusive corruption of Goldman Sachs and other Wall Street entities. Since Mr Obama has given them a free pass he too has shown us his true colors. Not holding anyone, but the US taxpayers, accountable for this financial scam only means the cycle will continue until the ponzi scheme collapses once again. One has to wonder at what point will the people of "Main Street" not take this sitting down any longer. The bailout has been a giant farce, and is only prolonging the inevitable crushing of the middle income earners in the US. This was not the change I voted for.

[moUSAnMe]

Our new President didn't do anything that the repubs would not have done, and if you think otherwise, you have buried your head in the sand. The banks own congress period.
Until lobbyist are stopped there will be no change anywhere, we have to pick ourselves up and make what we can of our own lives. Mine don't depend on them.
With that being said, I'm behind our bold new President, but he can't do it alone. Again back to congress.