You can always bank on the greed of Wall Street bankers
No doubt you’re going to feel terrible about this. Top executives of Goldman Sachs, the Wall Street powerhouse, are in a pout about how they’re being treated by you and me — i.e., the public.
These execs are used to being revered as financial geniuses, but having taken a $10 billion bailout from us taxpayers last fall, they’re now widely viewed as ... well, as welfare recipients. Like other welfare checks, the big one that Washington doled out to Goldman Sachs came with some strings attached, causing the chieftains to get all huffy. Especially galling to these princes of privilege is the limit on salaries and bonuses that bailed out banks are allowed to give to those in the executive suites.
Thus, Goldman recently threw a little hissy fit and haughtily declared that it will pay back our $10 billion to get the blankety-blank government out of its private business. Bold move! At last, Wall Streeters are reasserting their rugged, free-enterprise ethic, right?
Uh, not exactly.
What Goldman officials fail to mention is that they’ll still be clinging to several other lifeboats floated to them by those skinflint meanies in Washington. For example, when insurance giant AIG was given some $200 billion last year to save it from total collapse, $12 billion of it was actually a pass-through payment to Goldman Sachs. Best of all, this quiet handout did not come with any of those nasty restrictions on executive pay — so Goldman is happily hanging onto this backdoor subsidy.
Then there’s another $28 billion that was slipped to these hardy free-marketers in the form of special low-interest loans guaranteed by the Federal Deposit Insurance Corp. — a subsidy that Goldman’s chief financial officer concedes is vital to its survival. Far from forgoing this government underwriting, the bankers say they expect to ask for $7 billion more of it.
Additionally, Goldman has taken many more billions’ worth of low-cost loans from Federal Reserve funds. How many more billions? The Fed and the bank say this is “proprietary” information, not for public disclosure, even though it is public money.
So, while these golden ones are loudly repudiating the $10 billion public subsidy they took from us, they are coyly retaining at least 40 billion of our dollars to stay afloat — a tidy sum that does not include any restrictions on pay levels. Coincidentally, Goldman has since announced that it is setting aside nearly $5 billion to be distributed at the end of the year as compensation for its executives, including payments for outlandish bonuses for those at the top.
Saying that such-and-such is the greediest bunch of bankers on Wall Street is like someone claiming to have the biggest hairdo in Dallas — the competition is fierce. But that’s quite a head of hair atop Goldman Sachs. Well, sniff the executives, we merely play the game according to the rules we’re given.
Sure, and the Mafia plays its game strictly according to Hoyle. The difference is that the Mafia must actually break the rules, while Wall Street simply hires lobbyists and politicians to write the rules.
Indeed, Goldman Sachs has been nicknamed “Government Sachs” by its rivals, for it always seems to have at least one of its top officials strategically placed inside government to bend federal financial rules to its benefit. In the 1990s, for example, two Goldman foxes — Robert Rubin and Larry Summers — were inside the Clinton administration henhouse, where they helped craft the deregulation scams that enriched their former banks, before the scams caused the crash of our economy.
Following that crash, up stepped Hank Paulson, who had been Goldman’s CEO before George W. plucked him off the Street to run the very bailout that has now deposited so much of our money in his bank. With Bush’s demise, Hank is gone, but not Goldman. That sly Goldman Fox from the Clinton years, Larry Summers, is back, this time in Barack Obama’s henhouse, where he’s top economic advisor.
Not surprisingly, our gold keeps flowing to Goldman Sachs — but don’t expect the bankers to be grateful to you.
Jim Hightower is a national radio
commentator, columnist and author.