Goldman Playing the ‘Race Card’

Posted by Ray on August 22, 2009 under Main | Be the First to Comment

Apparently Goldman Sachs is playing the race card as to the reason why American’s think so poorly of the firm. This is the most absurd argument I have heard as most Americans have zero problem with people of Jewish decent. Now, I am sure there are some wacko’s out there that do not like Jewish people, however this is not why we, as a nation, have had it with Goldman Sachs.

I do realize that Goldman does have a lot of talent and has an extremely successful track record, but they are also guilty of many actions that deliberately hurt investors. The firm actively practiced laddering in its IPO deals and other questionable practices to further its dominance in the investment banking business. This is not isolated to just Goldman Sachs, but to most firms on Wall Street, however Goldman is just the most visible and one of the largest perpetrators of these actions, according to Matt Taibbi’s article in Rolling Stone.

It is also true that Goldman seems to be exempt from scrutiny from regulators and is given a lot of leeway when it comes to its business practices. I suspect that the reason for regulators to turn the other cheek has to do with the influence the firm has in not only the brokerage industry, but also in other areas of the government. More employees from Goldman seem to move into government positions than with any other firm, Henry Paulson is one of the more notable names as of late. This leads one to believe that the firm may be given free passes because the people regulating them had been made very rich by the firm when they were its employees.

What I find even more insulting is what we learned after the fact. We learned that Paulson had talked with Blankfein more often than he let on last year. That in itself is no big deal until you find out that the firm received not only the $10B from TARP funds, but they were the only firm to be paid 100 cents on the dollar for the bets they made with AIG when others received less. It is also disturbing that Bernanke was also in favor of bailing out Lehman, but Paulson, ex-CEO of Goldman, ‘never thought much of Lehman’ and let one of Goldman’s major competitors fail which, in turn, made a major problem into a catastrophic problem.

Even before then Goldman was fast tracked, along with Morgan Stanley, to become a commercial bank which allows the firms to borrow directly from the Federal Reserve’s Discount Window. That is a pretty sweet deal considering, I don’t think, that Goldman has ever taken a single bank deposit since the emergency measure was taken. Goldman then takes this gift and is allowed to do the very same type of business it did prior to becoming a commercial bank, which is the business of taking huge risks in the equity markets.

That in itself isn’t so bad until you figure out that the Fed is basically backstopping them, along with certain FDIC guarantees which Goldman was given access to. What that basically means is that we, the American taxpayer, is backstopping Goldman Sachs to take enormous risks and earn record profits while we are all hurting in one of the worst economies in 70 years. That, my friends, is the problem right there, not that Goldman has Jewish employees, but the fact that we are backstopping them with our tax dollars so they can earn billions in bonuses.

Contrary to what they think, they owe the American people their very existence and what do we get in return? Goldman paid back their TARP funds, merely so they could pay themselves bonuses I might add. I know that we “profited” from this transaction, I am still waiting for my dividend check from the government on all of these wonderful profits “we” are making, but clearly Goldman had rigged the system so they could get the best of all worlds, they are still backstopped by the taxpayer, they still get to take enormous risk and receive record bonuses.

None of that would have been possible if the firm was not bailed out last year, period. To add insult to injury, Mr. Blankfein’s wife made headlines for being upset because she had to be treated like a regular person at a store. She felt that since she was rich and spending so much money she should be given priority compared to ‘regular’ people. Of course, I cannot verify that the event concerning Mrs. Blankfein actually happened, but the report has not been contradicted by anyone in the Blankfein camp or Goldman Sachs.

In fact, the only thing Goldman said about the pending major bonuses is a warning to its employees. The warning said something to the effect of; “don’t buy extravagant items with your bonus money.” Isn’t that nice, they are concerned over what we think of them now which just might be a first for the firm. I am afraid that this is a no win situation for Goldman Sachs because Americans are hurting, badly, right now and the fact that we know you are only here because we backstopped your firm is going to cause a backlash.

So Lloyd, go ahead hire an image consultant and play the race card, kind of funny for a white guy to say that, it won’t help. It did not help Michael Milken when he got in trouble and it is not going to help you. No matter how you cut it the fact is that you owe your existence to us. The very fact that you know that the bonuses are going to cause this backlash and you are not going to suspend the bonus pool shows how out of touch you are with reality.

Frankly, I am ashamed that you would try and spin this criticism and accuse people of being anti-Semitic. I find this personally offensive and I am sure my minority friends would be offended that a bunch of rich white guys are trying to pull the race card. It has nothing to do with you or your firm’s heritage, but it does have everything to do with your business practices and your elitism that you still exude. I am sure you will win this battle, but you are going to look very foolish playing the race card in order to enrich yourself.