Michael Hiltzik: Goldman Sachs and ‘God’s work’
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Who says there’s no justice for the guilty?
The fraud lawsuit filed by the SEC on Friday against Goldman, Sachs & Co., described in my Saturday column, provides the second road map in a matter of weeks to the truly scandalous behavior of our investment bankers during the great financial crash of 2007-08. The first was the magisterial report compiled by the bankruptcy trustee in the Lehman Bros. case, released last month and described in my column March 17.
A few more of these, and even Republicans in Congress will be clamoring for financial regulation reform, instead of getting in its way. And we’ll hear no more from Goldman Chairman Lloyd Bankfein about how his investment bank is engaged in doing ‘God’s work.’
The column starts below.
There comes a point in every man-made disaster when the guilty parties are identified and brought to book. That way the victims can at least snatch from the wreckage some confidence that lessons have been learned and mistakes recognized.
If Friday’s federal fraud lawsuit against Goldman, Sachs & Co. over its role in the subprime mortgage meltdown signals the start of that process, all we can say is: Finally. Goldman, like other big Wall Street banks, has taken the position that the crisis was something of a natural disaster. In January, its chairman, Lloyd Blankfein, told Phil Angelides’ Financial Crisis Inquiry Commission: Sure, events look predictable now, ‘in hindsight.’ But ‘we never knew at any moment if asset prices would deteriorate further, or . . . snap back.’ Goldman’s role in the crisis, Blankfein insisted, was that of an ‘intermediary’ helping its clients ‘manage their risk . . . in distressed or challenged markets.’ But the Securities and Exchange Commission lawsuit shows that Blankfein’s attempt to blame the meltdown on the vicissitudes of the broader economy is a dodge.