Friday, April 30, 2010

Its Easy To Blame the Rich Guys

PRUDEN: Calling in the clowns to reform Wall Street
It's easy to beat up anyone who works for Goldman Sachs and the other big Wall Street houses. The partners pull down salaries and bonuses that are unimaginably large to most of us; how many Kobe steaks, how many $500-a-bottle French wines can a Wall Street broker consume? How many Manhattan apartments and vacation homes in the South of France can a Goldman Sachs chairman live in? President Obama, ever the nanny, said Wednesday that "at a certain point you've made enough money." He didn't say how much is enough, and who would decide how much is enough, but it's scary to think what Saul Alinsky's disciple might have in mind for all of us.

Mr. Levin and his conspirators in the Senate are trying to make Wall Street in general and Goldman Sachs in particular responsible for the financial crisis of 2008. Investigators at the Securities and Exchange Commission have accused Goldman Sachs of selling $150 million worth of instruments backed by worthless mortgages to a German bank without disclosing exactly what the bank was buying.

The senators deduced from that that Goldman Sachs was trying to rig the market in subprime mortgages and thus set off the great meltdown of '08. The law assumes that not every investment banker is a virgin and does not require that Goldman Sachs relieve its institutional customers from their common-sense duty to know what they're buying. You could argue that what Goldman Sachs and other investment houses are doing is not nice, but it's not against the law. Carl Levin could work to fix that, but screeds are more fun.

There is more at the link. You should go read the whole thing.

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