As Obama turns up the heat on financial reform and Republicans resist the financial reform bill proposed by Senator Chris Dodd a dangerous game is being played in Washington. Polls just came out that show three fourths of all Americans do not trust the government. With the partisan nature of debate in the capitol and the propensity of the Obama White House to call for bi-partisanship while attacking anyone who questions the partisan Democrats, is it no wonder the public trusts no one?
Then along comes the SEC with fraud charges against the king of the banking community Goldman Sachs. Goldman, the perfect target for venting American frustration with the motives and interests of the banks and their apparent total disregard for public opinion as noted from their multi-billion dollar bonuses, occupies a most unusual position in politics.
First there is the self described mission of the CEO Lloyd Blankfein as told to John Arlidge of the TimesOnline. As John wrote:
So, it’s business as usual, then, regardless of whether it makes most people howl at the moon with rage? Goldman Sachs, this pillar of the free market, breeder of super-citizens, object of envy and awe will go on raking it in, getting richer than God? An impish grin spreads across Blankfein’s face. Call him a fat cat who mocks the public. Call him wicked. Call him what you will. He is, he says, just a banker "doing God’s work"
"Just a banker doing God's work." One wonders what God he is referring to when making such an outrageous statement. Was it Yahweh or Ba'al and was it the Hebrew Ba'al or Christian Baal? Most people would believe the only God Goldman is working for is a false god or idol and we know what kond of agenda that god is pursuing.
Still Goldman, after watching and most likely contributing to the destruction of two of their major competitors, Bear Stearns and Lehman Brothers, and then getting the Federal Reserve to change a long standing policy and allow Goldman to change from investment bank to commercial bank thus allowing them to feed at the trough of almost no interest government money while continuing to invest in high risk deals, is in a league of its own in world banking.
A frequent collaborator with the most powerful and secret banking family in history, the House of Rothschild and their army of surrogates, Goldman is the most visible bank in politics of all time. It may just be that this penchant for publicity and obsession with power on the part of Goldman has put them on a collision course in their desire to remain king of the hill.
Now the danger to politicians is greater than ever regarding their association with Goldman or any effort that could be perceived to protect Goldman during debate on the financial reform bill. To begin to understand the problem consider the following as reported by OpenSecrets.org under the Center for Responsive Government:
Top Political Contributors in federal elections since 1989
AT&T, Inc. $44,361,209.
American Fed of State, County & Muni Employees $42,248,261
National Association of Realtors $35,733,073
Intern Brotherhood of Electrical Workers $31,660,630
American Assn for Justice $31,645,679
Goldman Sachs $31,612,375
National Education Assn $30,194,067
Laborers Union $29,132,400
Service Employees Union $28,134,482
Teamsters Union $28,029,624
Note that the American Association for Justice is the new name for the Trial Lawyers Association which gives 91% of their money to Democrats. Goldman, one of only two private companies on the top ten, normally gives 64% of their money to Democrats but gave 74% to Democrats during the Obama campaign. For all intents and purposes 8 of the top 10 contributors the past 20 years are unions.
So Goldman stands alone in pouring money into federal campaigns. But Goldman bundlers also raise money from others in their related industries so Commercial Banks contributed $222 million, Securities and Investment firms $628.9 million, Finance and Credit $59.8 million, and Insurance $327.3 million. That is well over a BILLION DOLLARS over 20 years.
If conflict of interest laws applied to congress most members could not vote for anything related to Goldman Sachs because of campaign contributions. By alas, such rules do not exist. However, in the interest of transparency and integrity all politicians should divulge their relationship with Goldman including the money donated directly and indirectly through Goldman and their dealings with Goldman as a favored special interest in Washington.
This includes an account of the involvement of Goldman from the Clinton presidency days when Goldman executives working for Clinton including Robert Rubin and Larry Summers, Clinton Treasury Secretaries, and Rahm Emanuel, chief Clinton fundraiser, were involved in changing federal regulations that allowed Goldman to capitalize on derivatives, swaps, and oil futures along with moving transactions outside the US so they could not be regulated.
These financial vehicles were adopted in 1999, the last year of Clinton's presidency, and opened the floodgates to hedge fund and others to manipulate the housing, oil, commercial real estate and commodities markets and nearly caused a worldwide depression. Just this week former President Clinton said he regretted allowing his economic advisors to make the federal rule changes. All three of the Clinton economic advisors from Goldman's are now key economic advisors to Obama.
As for transparency, if Obama intends to use Goldman's as a scapegoat then he needs to disclose his long association with Goldman as well. Dating back to his campaign for US Senate in 2004 there are questions regarding his involvement with Goldman including did they pay off the leading candidate in the Democratic primary against Obama and the Republican in the general election when they withdrew from the race for personal reasons? Also what was discussed in private corporate meetings with Obama in 2006 and 2007 in Chicago and NYC?
Finally there are the potential conflicts for the many former Goldman executives throughout the Obama administration and international financial community. Is the government protected from any actions that might benefit Goldman?
As for the Republicans, they risk being perceived as the protectors of Wall Street if they simply vote against the Senate financial reform bill. The mistrust of the public toward Washington will only be reinforced if they block the vote. They must offer a more substantial alternative than what Obama is offering that will effectively control the Wall Street abuses.
Doing nothing 2-3 years after the crash will cost them dearly in potential political gains as the public is waiting to see what congress and Obama can do in light of their cozy relationship with Goldman and other Wall Street firms.
Finally, both Obama and the Republicans can hurt themselves if they support any actions to dilute the impact of legal actions against these firms as more and more charges are filed. If they do not condemn any plea bargains that allow the companies to avoid an admission of guilt and to expense the cost of the fines then they should be held accountable. The actions of the financial community from 2007-2009 cost Americans $29 trillion in lost savings. Someone must pay for these damages.
So you see, both Obama and the Republicans can lose a lot more than they gain if they do not play by the rules, do what is good for America, and tell us exactly their relationship to Goldman. If they don't, then both sides could be a big loser.