Liberals exist as living proof that people will believe anything, but you have to wonder why anyone believes that the Obama Administration is about to get tough with financial miscreant Goldman Sachs & Rothchild. Of course, it does look like the nation’s biggest investment banking firm might be in some trouble, since the Securities and Exchange Commission just accused them of fraudulent investment practices in connection with their marketing of a a synthetic collateralized debt obligation that hinged on the performance of subprime residential mortgage-backed securities. You remember subprime mortgage-backed securities, don’t you? You know, the ones that tanked back in the summer of ’08 and sent the world’s capital markets into a tailspin, thereby kicking off the latest, ongoing recession.
It seems that Goldman fibbed a little to the investors to whom they sold these packages, if only by omission, by failing to tell them that the package in which they were investing took a long position on the mortgages, while a key advisor that structured the mortgage packages, Paulson & Co., was privately taking a short position. In other words, Paulson and Goldman structured a package of mortgage securities for unwary investors that bet that the mortgages would go up in value while themselves betting that they’d go down in value. Naughty, naughty Goldman!
But now, they’re caught. They must be in big trouble for bilking investors out of almost $1 billion, right? Well, then again, maybe not. You can be sure that members of the Obama Administration are mindful that Goldman and its employees were the President’s second-biggest campaign donor in 2008, right after the ultra-liberal professors at the University of California, Berzerkely. Goldman employees anted up about $1 million for the Obama campaign, which seems like a lot of money to ordinary folks, but then, it may have helped them obtain 1,000 times that in ill-gotten investment gains. When viewed that way, the cool million bucks they kicked in looks like a pretty good investment in itself.
Oh, and about those Obama Administration officials charged with looking into Goldman’s malfeasance – many of them are former Goldman employees themselves! To begin with, for example, Obama’s head of the Commodity Futures Trading Commission (CFTC), Gary Gensler, is a former executive with Goldman Sachs. Robert Rubin, Treasury Secretary under Bill Clinton and a former CEO of Goldman Sachs, is also a key Obama economic advisor, as are many of his former employees and associates, both at Goldman and the Clinton Treasury Department. Obama’s current Treasury Secretary, Timothy Geithner, for example, served under Rubin at Treasury, as did Larry Summers, who, as Director of the National Economic Council, is Obama’s chief economic advisor.
Several more economic advisors entered the Obama administration through Rubin’s financial and economic think-tank, the Hamilton Project. Jason Furman, for example, was also part of Clinton’s economic advisory team during the 1990s and later was a director of the Hamilton Project. Diana Farrell, who works with Furman in Obama’s National Economic Council, also served under Robert Rubin when he was at Goldman Sachs. Other Rubin associates include two counselors to Geithner, Gene Sperling (another ex-Goldman Sachs employee) and Lael Brainard, as well as David Lipton and Jacob Lew. How sweet it is for Goldman Sachs.
And how sweet it isn’t for the taxpayer and lowly investor. It’s interesting to reflect on how the Democrats made such a big deal about Enron’s contributions to the George W. Bush presidential campaign in 2000. Back then they tried to indict Bush in the court of public opinion through guilt by association because his campaign received about $150,000 from Ken Lay and other Enron employees, even though there were never any Enron employees appointeed to high offices in the Bush Administration. Obama received about seven times as much in campaign contributions from Goldman Sachs employees in 2008 as Bush did from Enron employees in 2000. How long do you suppose it will be before the Center for Public Integrity does a story on that?
Central Pennsylvanians should stop playing the sucker for these people. November will come soon enough. Let’s vote these bums out of office.