Whether it is Goldman Sachs' central role in the subprime crisis, handing out hundreds of millions in bonuses soon after receiving a $10 billion taxpayer bailout, or CEO Lloyd Blankfein claiming that his company does "God's work," this Wall Street giant has rightfully earned the leading role in the story of "All That is Wrong with Wall Street."
Ten years ago neighborhood residents from 20 states came to Washington, DC to try and block the repeal of Glass-Steagall, the Depression era banking act that provided a firewall between commercial banks and investment firms.
Led by longtime community leader, Gale Cincotta, hundreds of Americans went to the home of Phil Gramm, the champion of this deregulatory effort, to challenge the then Texas Senator to reverse course.
He didn't, and the American people have paid the price for it. There is no question that the repeal of Glass-Steagall resulted in the massive growth of a number of financial institutions, making them less accountable and more dangerous. It is also clear that tearing down critical financial firewalls paved the way for the casino-like behavior that drove the subprime crisis. As you list the monstrosities that grew out of the repeal of Glass-Steagall you won't read long before naming Goldman Sachs.
One of the people who made the trek to see Gramm in 1999 was Des Moines resident Brenda LaBlanc. Three weeks ago the 81-year old Iowan led 1,000 people to the America Bankers Association Convention in Chicago. With the Administration and Congress being slow to hold banks accountable, she and other Americans deputized themselves, calling for a Showdown in Chicago.
After visiting the Bankers' Convention, LaBlanc was also among those who paid a visit to the Chicago Headquarters of Goldman Sachs.
Now, LaBlanc and delegates from the Showdown are heading to Washington on November 16. Among the stops will be the DC headquarters of Goldman Sachs.
The message is simple: Banks, like Goldman, that have been deemed "too big to fail" are too big to exist. The American people cannot be expected to continue to prop up the same institutions that created the crisis we all face today. Until federal officials decide to hold the big banks accountable and break up the biggest banks, the American people will have to sign up for duty and do it ourselves.
Showdown delegates will also be bringing a proposal to Goldman. Word on the street is that Goldman is anticipating a $23 billion bonus pool in 2009. Yes, the same firm that we rescued with a $10 billion taxpayer bailout a year ago, is now preparing to hand out up to $23 billion in bonuses. If Goldman wanted to do their part to clean up a mess that they helped create (and clean up their image), a good place to start would be the creation of a foreclosure prevention program. A one billion dollar contribution from Goldman's bonus pool would prevent 200,000 foreclosures. A few billion would go a long way toward helping stem the cresting tide of foreclosures.
One thing is clear. The public is ready for banks like Goldman to be held accountable. And if Congress and the Administration don't have the stomach to take them on, the rest of us should join fearless Americans like Brenda LaBlanc and do it ourselves.