Rackets and Racketeers

The latest on the Goldman Sachs scandal:

Paul Krugman writes in “Looters in Loafers” that the financial reforms being promoted by the Obama Administration would have gone a long way toward restraining Goldman Sachs from defrauding its clients. However, he also suggests adding language to the bill to specifically prohibit “Producers”-type scams.

He notes also that Republicans continue to talk about “bailouts” as if that were the only issue at hand:

The main moral you should draw from the charges against Goldman, though, doesn’t involve the fine print of reform; it involves the urgent need to change Wall Street. Listening to financial-industry lobbyists and the Republican politicians who have been huddling with them, you’d think that everything will be fine as long as the federal government promises not to do any more bailouts. But that’s totally wrong — and not just because no such promise would be credible.

For the fact is that much of the financial industry has become a racket — a game in which a handful of people are lavishly paid to mislead and exploit consumers and investors. And if we don’t lower the boom on these practices, the racket will just go on.

See Vicky Ward, “Senior Goldman Exec Is Married to Former Head of ACA.” ACA would be ACA Capital, the selection-manager-of-record of the infamous Abacus Fund. ACA asked John Paulson to choose the bonds included in the fund, allegedly without realizing John Paulson would be enriched if the Fund failed. The president of ACA is the husband of the managing director and deputy general counsel of Goldman Sachs.

And the New York Times is reporting that senior executives at Goldman Sachs were playing an “active role” in the mortgage unit as the mortgage market began to go south.

13 thoughts on “Rackets and Racketeers

  1. Pingback: Tweets that mention The Mahablog » Rackets and Racketeers -- Topsy.com

  2. Recently heard an in-depth analysis of the phenomenon of the revolving door linking government workers/electees to the financial sector. Boiled down – the favors etc. done for the financial sector by government employees become jobs on the Street paying upwards of millions of bucks/year when the employees leave their government jobs.

    I will believe serious reform of Street practices when it happens and I’m not holding my breath.

  3. Important dates to remember:

    4/19/1775 – Battles of Lexington & Concord/Start of American Revolution. Some
    British troops blown up.

    4/19/1993 – Siege at the Branch Davidian compound in Waco Texas. An unemployed
    Timothy McVeigh travels around country visiting friends – drives to Waco
    to protest/show support. Branch Davidian compound blown up by
    ATF/FBI and a lot of other letters of the alphabet

    4/19/1995 – Timothy McVeigh and associates blow up Murrow Federal Building in
    Oklahoma City to commemorate anniversary of Waco.

    6/11/2001 – Timothy McVeigh executed.

    9/11/2001 – Different bunch of extremist whack jobs blow up some buildings in NYC.

    ?/??/???? – Rick Perry loses Texas gubernatorial election to a bag of beef jerky/Texas
    finally secedes from the union (either one works for me)

    http://thinkprogress.org/2010/04/19/perry-on-bush-legacy/#comments

    6/

  4. As a Federal employee for 31 years, I would like to clarify that the revolving door referred to above deals only with politically appointed employees; not the average hard-working full-time, permanent Civil employee. During those 31 years, the 8 years of the Bush Administration the revolving door became a fine art. Additionally, the most incompetent heads of agencies occurred during that time period. Way too many “Heck of a job, Brownies” headed important agencies.

  5. The fact that the American financial system very nearly collapsed in September of 2008, due to the deception and greed of the fatcats on Wall Street, and not one person has gone to jail is astonishing! People that live in Europe and other places that have suffered as a result of their misdeeds are also astounded – and appalled! If this doesn’t prove, once and for all, that unfettered capitalism is a failed economic system, I don’t know what it will take.

    If I hold up a liquor store with a gun, steal $1,000 and get caught – I go to jail for 10 years. However, if I hold up investors with a bogus document called a prospectus, steal a BILLION dollars and get caught – I get off scot-free?! WTF?

  6. Dear Maha:
    Rember – a “Christmas Story” – where Ralphie hoped to earn his teachers blessing to get a “Red Ryder BB Gun ” for Christmas? Okay here we go.

    “Dear Maha:
    This year for our sacred holiday I would really like a Webley Elephant gun and a “Desert Eagle” and an AK47and an Uzi for Hannukah, Christmas, Boxing Day, Kwanza – Ramadan – whatever works for you. If you really exist please prove it by delivering a few shoulder surface to air missles. The other kids in the in the neighorhood are losing faith. Here in we would like a few IED kits in our stockings.” I really hate that we’re here. But there are idiots that decided to make today their “Bring you guns to work day” on the mall in D.C. but that’s okay – people with a small penis like to whip them out but damned if they can do anything with them except pee. That explains why all my Azaleas are dying. Damned Teatard neighbor. I humbly pray – God//Jesus/Jahweh/Buddha/Shiva/FSM protects us damned heretics.

    Sarah Palin: Burn Witch, Burn

    (clutches pearls)

  7. About two years ago, I was having a conversation with several coworkers.
    Two of us were not participating in the 401 K program, the other three were.
    One guy said he had been with the company for 5 years, and was happy to say his account had grown to $7,000.00
    I said the system is rigged, the whole game is rigged in favor of the fund managers, and was laughed at.
    The system was/ is rigged, and can be easily manipulated.
    The guy with the $7,000.00 still has about $7,000.00.
    I chose to invest in tools ,equipment, and training.
    Although the tools and equipment are under utilized at the moment, they will make me money should my job go away.
    I may never get rich, but I’ll never go without either.( as long as I can walk)

    Sam, Voltaire wrote:” Murders are always punished, unless they kill in great numbers to the sounds of trumpets”

  8. Sam Simple, as the old saying goes: the jaws of justice grind slow, but they grind exceedingly fine.

    Question is: which laws did they break? I don’t know.

    But in order for the SEC to move on this case — the first, I suspect, among forthcoming many — it had to think it was on pretty solitd ground. And the tactic of naming only one or two relatively mid-level folks in the suit is common practice. People complain to the police about drug dealing openly going on on their streets, without realizing that law enforcement knows who these people are and is fully aware of what they are doing. They’re doing nothing because they’re waiting until they have sufficient evidence to nail one of the major players. Upon which time, they will offer them a plea bargain: “You tell us what you know, name names, show us the evidence, and if it is sufficient to nail them to the wall, we’ll go easy on you.”

    Thing is, even if the SEC doesn’t have enough evidence to bring felony charges, they’ve opened the door to exposing the underlying rot. Either way, I count it as a win-win. For certain, there will be civil sui6ts.

  9. @ Muldoon

    Question is: which laws did they break? No laws were broken in the making of this freak show. All freaks here are on the stage of their own free will. If they weren’t here they’d be chained in an attic or spending their lives down in the basement because Mommy & Daddy are embarrased by them and don’t want them to get hurt by the nasty people that don’t understand them. What is so hideous about these wealthy, well spoken freaks? They look just like you or me don’t they? And they are so RICH RICH RICH. Oh – I forgot to mention – like the very evilest monster in your worst dream – they aren’t really human. They really have no souls. Life is easier without one. Although you will often find them in church every now and then and they may CLAIM that yes they do love the Lord Jesus, and do believe in God – they really believe in the FSM, Santa or the Easter Bunny just as much. Especially those antiquated teachings of the New Testament. Love thy neighbor. Do unto others. Sorry, as the nuns said – “They don’t put potatoes on the table”. As Pink Floyd said “Don’t give me that Do goody good bullshit” In short any dog or cat you meet has higher ethics than most “Bankstas” you meet.

  10. And now for something completely different. Anyone remember this from
    “Lethal Weapon 2?” Suits Mel Gibson to a T.

  11. Bonnie – thanks for ‘cleaning up’ my post. Also, your post reminds me of something Bill Maher said, “Republicans say government doesn’t work and then they get in it and prove it.”

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