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Claude Cartaginese

Free Speech TV: The Fall and Rise of Goldman Sachs

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Posted on July 16 2009 9:53 am
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http://www.usnews.com/articles/news/national/2009/06/22/goldman-sachs-denies-reports-that-it-will-pay-out-huge-bonuses.html

When both Glenn Beck (Fox News’ Libertarian talk-show host) and Amy Goodman (host of Democracy Now!, Free Speech TV’s Marxist forum) both air a piece on the same issue–and come to the same conclusion–then you know there’s a story there.

Beck and Goodman were both miffed by financial giant Goldman Sachs’ recently released earnings report, reflecting that the company had amassed the largest quarterly profit in its 140-year history — $3.44 billion — in the three months between April and June of this year. This means that for Goldman, at least, the era of lavish Wall Street bonuses is about to come back with a vengeance.

As one of the largest recipients of TARP funds doled out late last year (purportedly to prevent a total meltdown of the financial markets), Goldman has repaid the government $10 billion of that money and has now set aside $11.4 billion from its profits this quarter to pay bonuses, Rolling Stone contributing editor Matt Taibbi told Amy Goodman yesterday. And the bonuses are huge. In fact, Goodman muses that “If Goldman continues to earn profits at the same level, its employees could each earn, on average, close to $770,000 this year, with senior executives and bankers being paid much more.”

Not a bad turnaround for a firm that was allegedly at death’s door just a few months ago. Interestingly, up until last month, Goldman was vehemently denying that it had plans to pay out any bonuses at all in the near future. Company spokesman Ed Canaday even went on record to refute rumors that Goldman bankers were planning to pay themselves huge bonuses as “pure speculation.”

According to Taibbi:

“… [T]he implicit idea last year with the bailouts was that these banks would take these advantages and that they would use that money to kickstart the economy. Instead, they’ve just decided to keep all the money and turn it into bonuses. And I think that’s something that everybody has to examine now.”

And here’s where things get really twisted. As both Beck and Taibbi point out, the number of current and former Goldman Sachs executives who have played a role in the government’s fiscal policymaking decisions which directly benefit Goldman Sachs is a statistical crime.

Taibbi told Goodman:

“… [T]he number of [current and former] Goldman Sachs employees who are in the government is so—it’s so enormous that it would be impossible to list on this program. But just briefly, you know, there were two Treasury secretaries who were very important: Bob Rubin during the Clinton administration and Hank Paulson during the Bush administration. Bush’s Chief of Staff, Josh Bolten, was a former Goldman Sachs banker. The guy who administered TARP, Neel Kashkari, was a Goldman banker. The current head of the NYSE, the World Bank, the Canadian National Bank, the number two guy at the Treasury, the head of the Commodity Futures Exchange Commission, which regulates the commodities market—all these people are ex-Goldman bankers. And because of that, they have access to these, you know, contacts in government, and they’ve always been able to get whatever they want from government, whenever they want…”

With all due respect to Shakespeare, forget about Denmark. Something is rotten at Goldman Sachs.

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