Goldman took $13 billion of taxpayers money from AIG bailout—$13 billion which kept it alive. And it’s now back making huge profits gambling on the markets and paying out huge bonuses.
This is causing notice. Matt Tabibi wrote a wonderful article in Rolling Stone blaming Goldman for the majority of the fraud (OK, legal fraud) in the dotcom stock boom, the oil price spike, the mortgage boom & the upcoming cap & trade boom. A little taster on his blog here. Paul Krugman says essentially the same thing in his column today. And for the kiss of humorous death, here’s Andy Borowitz’ column about Goldman agreeing to take over the US Treasury—after all it’s already happened.
But the issue here is that incentives haven’t changed—other than the taxpayer has been told to give Goldman money and in return Goldman has been allowed to do what it always does. And regulations haven’t been written that will change that behavior.
On the night when the House Ways and Means committee has voted to put more taxpayers money into the health care system, without any real change in incentives or serious regulation, the parallels are a little close.
1) I guess the combination of renewed Goldman bonuses and a surtax on those earning more than $1 million, means that at least we have a short-term financing mechanism for the uninsured
2) When Wall Street collapsed last November a noted health care analyst told me he was buying Goldman stock as it would never be this low again. Sadly his cynical forecasting was correct, meaning that nothing has been done to ensure that a repeat of the 2008 crash and the bubble that ran up to it won’t happen.