GOPman Sachs

Even with all the tales of greed and fraud coming out of Wall Street over the last two years, the allegations against investment bank Goldman Sachs are pretty appalling.

The story so far: a big Goldman client named John Paulson packaged a derivative based on subprime mortgages and pitched it to Goldman as an investment opportunity for their other clients. Goldman agreed and sold it as such - but never told the buyers that Paulson deliberately designed the investment, named ABACUS 2007-ACI, to lose value. Knowing that the subprime market would tank, Paulson sold short, made a killing and left other clients holding the bag.

So where does Goldman figure in all this? Well, it seems they did one of two things:

1. They were unaware that ABACUS was purposely meant to fail, in which case their lack of due diligence was criminally negligent, or
2. They knew all along that it was a scam and sold it anyway, in which case they coldly ripped off some of their clients to make another one richer.
   

Now that the Securities and Exchange Commission has sued Goldman Sachs in civil court for fraud, the popular anger is once again brewing. When we invest our money with Wall Street, whether it's in a 401(k), a stock or bond portfolio, or something else, we expect the company we're working with not to screw us over. This is why the White House is trying to rein in the Wall Street casino, to put back the regulations which have been repealed since the early 1980s and which would hopefully prevent future economic meltdowns.

But since the White House supports putting the crooks and connivers under control, the Republican Party must, by definition, be against it. Yes, the Party of No has once again emerged as the party of Wall Street, vowing to do everything it can - filibuster, offer endless amendments, hold its breath until it turns blue, etc - to derail the financial-reform bill. They evidently still don't realize that the American people are mad at Wall Street for very nearly sending the whole economy down the toilet, and are unlikely to reward its backers in November.

So now the GOP is weighing in on behalf of poor downtrodden Goldman Sachs, saying they're being picked on by that meanie in the big house on Pennsylvania Avenue. Yes, Senator Orrin Hatch went on the tube yesterday to complain that the SEC timed its lawsuit filing to fit the White House's legislative schedule and desire to pass the Wall Street reform bill. Fox News and other right-wing media outlets predictably ran with it, accusing the White House of "meddling" and darkly wondering whether they're "exploiting the charges to build the case for their financial regulatory overhaul."

Of course, the people doing all the shrieking and conspiracy-theorizing ignore two things: as an independent agency the SEC doesn't coordinate any enforcement action with the White House, and Goldman Sachs actually donated more money to Democrats than to Republicans. If the White House really was making an example of a Wall Street powerhouse, wouldn't they have picked one which supported the other side? Just sayin'.

Will the GOP realize that they're playing a losing game? Will they continue to sell their souls for Wall Street's tainted campaign cash? Of course they will. Expect the fall campaign to be especially nasty as the Republicans try and divert voters' attention from this simple fact.