Record Profits for Goldman-Sachs: Bullets not Bailouts

The news that Goldman-Sachs is reporting “blow-out profits” is leaving some of the mainstream media pundits wondering how Goldman could rebound from “disaster” to record profits, while the rest of the country is queuing on unemployment lines and homeless shelters. Let’s revisit a blog I wrote in March , 2009. Also keep in mind the recent news that:

UBS and the Obama Administration are now “negotiating” on a UBS policy of hiding the bank accounts of billionaire tax-cheats.

Citibank is raising executive salaries 50% and giving bonuses larger than the pre-crash levels, while raising the interest rates charged to card users (i.e. tax-payers).

Organized Crime and Government   (edited from March 31^st, 2009)

It is certain that the present economic crisis is due primarily to the deregulation of Wall St. and the failure to regulate derivatives. It is just as certain that some people on Wall St. are making a lot of money with the tax-payer bailouts. So if we follow the old adage “follow the money”, what do we get?

Why did some Wall St. firms get bailed out and not others? Why was AIG allowed to keep bonuses and launder money to Goldman-Sachs, Citigroup and UBS? The map of key criminals reads like an old Mafia organization map, tracing connections between Wall St. and Government. This is the criminal organization that stole our savings and is stealing our tax dollars now:

Robert Rubin (AKA “The Accountant”): Former executive with Goldman-Sachs and 70^th Secretary of the Treasury. He now works for Citigroup. He spearheaded the Clinton Administration effort to repeal the Glass-Steagall Act and exempt derivatives.

Larry Summers (AKA “The Apprentice”): Currently the Chief Economic Advisor to the President, former 71^st Secretary of the Treasury and former assistant to Robert Rubin. He assured that derivatives would be exempted from regulations and was a big proponent of allowing Wall St. to “self-regulate”. How did that work out, Larry?

Henry Paulson (AKA “The Don”): the power behind the organization. He was the former CEO of Goldman-Sachs and 74^th Secretary of Treasury.

He organized and coordinated the government response to the Wall St. bailouts with Goldman-Sachs. He made the decisions on who got money and who didn’t. For example, when Lehman Brothers and AIG requested bailouts, Paulson had a “sit down” with current Sachs CEO, Lloyd Blankfein in late Sept. 2008 and decided to take out Sachs competitor Lehman Brothers but bail out AIG. Who was AIG’s biggest trading partner? Goldman-Sachs. Too bad you Lehman Brothers, Bear-Stearns investors backed the wrong horse. Maybe you should pay more attention to who is in government than your portfolio. Paulson runs the organization now through his positions on the Boards of TARP and FSOB.

Tim Geithner (AKA “Babyface”): Former assistant to Robert Rubin and Larry Summers and now the 75^th Secretary of Treasury. He helped Rubin and Summers destroy the regulation of Wall St. and exemption of derivatives. Recommended by “the Don” Paulson, he is now in charge of making sure the organization takes care of it’s own.

Mark Patterson (AKA “the Enforcer”), Geithner’s Chief of Staff and formerly of Goldman-Sachs (see Rubin, Paulson). Patterson strong armed Sen. Dodd into taking out the restrictions on bonuses to AIG and allowed AIG to pay-off lenders at full price such as Goldman-Sachs (see Rubin, Paulson), Citigroup (see Rubin) and UBS (see Gramm).

Ben Bernanke (AKA “The Banker”): Chair of the Federal Reserve. He withdrew the money and put it into TARP to pay off, sorry, “bail out” Wall St. firms such as Sachs and Citigroup at the recommendation of Paulson. He appointed Neel Kahkari, formerly V.P. of (you guessed it) Goldman-Sachs to head TARP. He negotiated the deal to save AIG and allowed all initial TARP money to be given to Wall St. without conditions.

Sen. Phil Gramm (AKA “The Assassin”): Along with Robert Rubin and Larry Summers, he spearheaded the Senate legislation to kill Glass-Steadman, regulations on trade and accounting and exempted derivatives. While Chairman of the Senate Banking Committee he exacted over 3 billion dollars of contributions to allies in the Government from Wall St. He was in a position to take over as “Don” but failed in the 2008 election. He has since become a lobbyist for… UBS, one of the firms AIG laundered TARP money to pay off.

So can we trust the same men in government who caused the economic crisis by enabling the Wall St. thefts of our future (Summers, Geithner, Paulson, Bernanke) to make sure our money now goes to solve the problem? Or can we expect that they will enrich the same people who stole our money with our tax dollars? Is it any wonder why Goldman-Sachs is now “whole” and less competitors? Is it any wonder why we can’t account for hundreds of billions of tax dollars already given to Goldman-Sachs, Citigroup and AIG?

Is it time to realize that we are being robbed by a criminal conspiracy that reaches from Goldman-Sachs to the Obama Administration to AIG and back again when the next round of pay-offs, I mean bail-outs occur.

That’s what I wrote in March and it is just a true today and it will stay that way until we, the people, take back our own money and take back our own government.

Organized Crime and Government

I’ve been thinking a lot about the economic crisis. It has damaged the security of our Country and has hurt so many innocent people. The people on Wall St. and their conspirators in government have caused this country more damage than Al Qaeda. I agree with President Obama that we have to focus on solving the crisis. But solving the crisis means identifying what criminals did what to cause the damage. People are outraged that the same people at AIG that caused the problem got bonuses. What about the outrage that the same people in government who conspired with them are now in charge of solving the problem?

The worst economic crisis since the “Great Depression” was primarily the result of three government actions. First, repeal of the Glass-Steagall Act and hundreds of post Depression regulations that then allowed Wall St. investment firms to compete with Banks. Second, the derivatives market was exempted from regulatory control. This allowed Wall St. to create derivatives and then criminally over-leveraged them to cause the whole house of cards to collapse. Third, Wall St. was allowed to carry off-balance sheet accounting and to use “self-policing” to regulate that market. This allowed Wall St. to hide overleveraged phony derivatives from regulators, if they ever decided to look.

It is certain that the present economic crisis is due primarily to the deregulation of Wall St. and the failure to regulate derivatives. It is just as certain that some people on Wall St. are making a lot of money with the tax-payer bailouts. So if we follow the old adage “follow the money”, what do we get? Why did some Wall St. firms get bailed out and not others? Why was AIG allowed to keep bonuses and launder money to Goldman-Sachs, Citigroup and UBS? The map of key players reads like an old Mafia organization map, tracing connections between Wall St. and Government. This is the organization that stole our savings and is stealing our tax dollars now:

Robert Rubin (AKA “The Accountant”): Former executive with Goldman-Sachs and 70th Secretary of the Treasury. He spearheaded the Clinton Administration effort to repeal the Glass-Steagall Act and exempt derivatives. He now works for Citigroup.

Larry Summers (AKA “The Apprentice”): Currently the Chief Economic Advisor to the President, former 71st Secretary of the Treasury and former assistant to Robert Rubin. He assured that derivatives would be exempted from regulations and was a big proponent of allowing Wall St. to “self-regulate”.

Henry Paulson (AKA “The Don”): the power behind the organization. He was the former CEO of Goldman-Sachs and 74th Secretary of Treasury. He organized and coordinated the government response to the Wall St. bailouts with Goldman-Sachs. He made the decisions on who got money and who didn’t. For example, when Lehman Brothers and AIG requested bailouts, Paulson had a “sit down” with current Sachs CEO, Lloyd Blankfein in late Sept. 2008 and decided to let Sachs competitor Lehman Brothers fail, but bail out AIG. Who was AIG’s biggest trading partner? Goldman-Sachs. Too bad you Lehman Brothers, Bear-Stearns investors backed the wrong horse. Maybe you should pay more attention to who is in government than your portfolio. Paulson runs the organization now through his positions on the Boards of TARP and FSOB.

Tim Geithner (AKA “Babyface”): Former assistant to Robert Rubin and Larry Summers and now the 75th Secretary of Treasury. He helped Rubin and Summers destroy the regulation of Wall St. and exemption of derivatives. Recommended by “the Don” Paulson, he is now in charge of making sure the organization takes care of it’s own. Just to be sure, his Chief of Staff is Mark Patterson, formerly of Goldman-Sachs. Patterson strong armed Sen. Dodd into taking out the restrictions on bonuses to AIG and allowed AIG to pay-off lenders at full price such as Goldman-Sachs

Ben Bernanke (AKA “The Banker”): Chair of the Federal Reserve. He withdrew the money and put it into TARP to pay off, sorry, “bail out” Wall St. firms such as Sachs and Citigroup at the recommendation of Paulson. He appointed Neel Kahkari, formerly V.P. of (you guessed it) Goldman-Sachs to head TARP. He negotiated the deal to save AIG and allowed all initial TARP money to be given to Wall St. without conditions.

Sen. Phil Gramm (AKA “The Assassin”): Along with Robert Rubin and Larry Summers, he spearheaded the Senate legislation to kill Glass-Steagall, regulations on trade and accounting and exempt derivatives. While Chairman of the Senate Banking Committee he exacted over 3 billion dollars of contributions to allies in the Government from Wall St. He was in a position to take over as “Don” but failed in the 2008 election. He has since become a lobbyist for… UBS, one of the firms AIG laundered TARP money to pay off.

So can we trust the same men in government who caused the economic crisis (by enabling Wall St.’s thefts of our future) to make sure our money now goes to solve the problem? Or can we expect that they will enrich the same people who stole our money with our tax dollars? Is it any wonder why Goldman-Sachs is now “whole” and has fewer competitors? Is it any wonder why we can’t account for hundreds of billions of tax dollars already given to Goldman-Sachs, Citigroup and AIG?

Is it time to realize that we are being robbed by a conspiracy that reaches from Goldman-Sachs to the Obama Administration to AIG and back again when the next round of pay-offs, I mean bail-outs occur.

Leverage

Don’t let them fool you. There is a way to stop the economic terrorism of AIG and their latest act of outrage: giving multi-million dollar bonuses to the same people who ran the division of AIG that caused the economic crisis in the first place. AIG FORCED us to bail them out with over $170 billion dollars of tax money (our money) in order to save the financial markets. The same people who made a decision to put not only their own company at risk but hundreds of other financial institutions, are now going to get over $165 million dollars in bonuses for making the worst economic decisions in corporate history. It is outrageous, but it is certainly NOT unstoppable.

The problem with the Obama administration is that the people he has solving the economic crisis on Wall St. are FROM Wall St. – they are part of the club. Geinthner, Summers, Bernanke, Romer, Rubin – they all say they are “outraged”, but a contract is a contract and there is nothing we can do. First of all, they are all current or former members of the same club. They all had their time of doing deals, having lunch and playing golf with the same AIG people. I don’t trust any of them in terms of holding their buddies accountable. Sure, the Obama economic team wants to solve the problem, but they don’t seem interested at all in holding the people who nearly destroyed our economy accountable. What they did to our economy with their greed has done far more damage to the security of our Country than anything Al Qaeda has done.

A contract is a contract, but contracts can be re-negotiated, especially when there is a strong incentive. The GOP has no problems at all forcing the hard working auto workers to renegotiate their contract under a threat of mass layoffs. Why is such a threat made to the UAW but not thieving AIG executives? After all, a contract is just a contract, isn’t it?

Here’s incentive for the Wall St. terrorists: criminal prosecutions. What the people at AIG did was deliberately hidden from regulators and stockholders. Even if derivatives were exempted from trade regulations (by an amendment pushed by the almost Treasury Secretary Phil Gramm), they were not exempted from tax laws and other legal statutes that could apply if some lawyer with half a brain at the DOJ researched it. That’s the leverage we have as the people. We need to force the Justice Department to start criminal investigations of these white-collar criminals and if they want to re-negotiate tax funded bonuses for shorter prison terms then they can have their lawyers call our lawyers.

Lets’ see how much laughing the Wall St. terrorists do when they start being held accountable for their crimes instead of being paid for them – crimes which are long overdue to be prosecuted.