Goldman's Moral Pathology -- 15 Symptoms
The Wall Street Disease Destroying Democracy and Capitalism
Driven by different "invisible hands", insiders serve their selfish agenda to totally control Americaís democracy and capitalism -- at least until we adopt geonomics. That reform would de-tax our efforts and disburse society's surplus among us all, leaving no commonwealth on the table for the more grasping among us to slurp up by hook or crook (or both). This 2009 op-ed is from MarketWatch, Nov 24.
by Paul B. FarrellInsiders like Lloyd Blankfein, Henry Paulson, and others pocket billions more of the firm's profits than shareholders. Sadly for America, Goldman's moral pathology is becoming a pandemic spreading beyond Wall Street's too-greedy-to-fail banks, infecting our economy, markets, and government as it metastasizes globally.
What are the symptoms of this growing "pathological mutation of capitalism"? Here are the 15 signs:
1. Gross denial of any moral damage caused by their rampant greed
Greedy bank CEOs raid the Treasury then stuff $30 billion in their bonus pockets, up 60% from last year. They are our 21st century General Motors, convinced "What's good for Goldman is good for America." We saw how that arrogance ended. Wall Street has similar suicidal symptoms.
2. Narcissistic egomaniacs with secret 'God complexes'
London Times' John Arlidge interviewed Goldman CEO Blankfein: "He paid himself $68 million in 2007, now worth more than $500 million. He says heís just a banker 'doing God's work.'" When I was at Morgan Stanley in the 1970s the firm ran an ad: "If God Wanted To Do a Financing, He Would Call Morgan Stanley." Today, all of Wall Street is dual diagnosed: They're morally blind money addicts who believe they're "God's chosen." AA would say: They haven't "bottomed," won't recover from their disease till a disaster hits. Then maybe they'll "quit playing God."
3. Paranoid obsessives about secrecy, guilt, and non-disclosure
Bloomberg: "New York Fed's Secret Deal: Taxpayers paid $13 billion more than necessary when government officials, acting in secret, made deals with banks on AIG, buying $62 billion of credit-default swaps from AIG."
4. Power-hungry need to control government using Trojan Horses
Wall Street Journal: "For a year Goldman said it wouldn't have suffered damage if AIG collapsed. But a new report kills that claim. TARP inspector general found that then New York Fed Chair Tim Geithner gave away the farm. If AIG had collapsed, Goldman would have had to cover the losses itself. They couldn't collect on the protection of AIG swaps." Yes, Goldman was bankrupt. But friends in high places always save them.
5. Borderline personalities who regularly ignore conflicts of interest
New York Times: "Before becoming Treasury secretary in 2006, Hank Paulson agreed to hold himself to a higher ethical standard than his predecessors. He specifically said he'd avoid his old buddies at Goldman where he was CEO. Later Congress saw many conflicts of interest, not just meetings but favorable treatment for his buddies at Goldman."
6. Pathological liars incapable of honesty even with own investors
McClatchy News: "Goldman secretly bet on the US housing crash after peddling more than $40 billion of securities backed by 200,000 risky home mortgages. But they never told their investors they were also secretly betting that a drop in housing prices could wipe out the value of those securities." Boston University Prof. Laurence Kotlikoff says: "This is fraud, should be prosecuted." But it won't be in the new "mutant capitalism." Members of AA say you know when an alcoholic is lying: Their lips are moving. They lie, the lies cascade, memory slips, more lies are necessary, they cannot stop lying.
7. Sole fiduciary duty to insiders, not investors, never the public
New York Examiner: "Goldman was at the heart of the subprime market, selling subprime junk as no-risk AAA bonds, then gambling, hedging, shorting their investors. Goldman traded like Enron. That set up the meltdown. The Fed and Goldman's ex-CEO at Treasury saved Goldman. Taxpayers got stuck with the bill. Bailout overseer Elizabeth Warren called this reckless gambling. Trend forecaster Gerald Celente calls it mafia-style looting.
8. Moral issues are PR glitches, violations of 'don't get caught' rule
USA Today says "Goldman Sachs should be celebrating. Yet, the mood at the investment bank seems to be one of crisis about the public backlash over employees' bonuses." So Goldman canceled their Christmas party. Also launched a $500 million program for small businesses. They can't see their moral failings, only a PR problem, so they hire PR agents and crisis managers.
9. Charitable donations are tax and PR opportunities, not moral issues
New York Times: Examined Goldman charitable foundation's tax filing: Thick as a phone book with more than 200 pages of trades. "Never seen anything like it," said Verne Sedlacek, president of Commonfund, a $25 billion fund for universities and nonprofits. The money to Goldman's foundation is dwarfed by insiders' bonuses. The foundation got $400 million, gave away $22 million. Bonuses were 20 times more. The New York Post said "Goldman's Born Again Image is Laughable." They're sleaze-ball cheapskates.
10. When exposed in a massive fraud, feign humility, fake an apology
CBS MoneyWatch: "Blankfein now says he's 'sorry for the role Goldman played in the housing crisis: We participated in things that were clearly wrong.'" Wrong? Try clearly criminal: fraud; cheating millions of homeowners, shareholders, taxpayers. Then pays phony "restitution," a fund of $100 million annually for five years to small-business owners. Financial Times says "$100 million is the profits from one good trading day. In 3Q '09 they had 36 days better than that."
11. When bankruptcy threatens, bribe friends in 'Happy Conspiracy'
Barron's: While Geithner was "showcasing what a great investment Washington made in Goldman, the 23% return on the $5 billion of the taxpayers money, Warren Buffett's deal made him a fabulous 120% return. Goldman's stock ran up to $180 from $115, a gain of $2.8 billion. Add 8% discount on warrants, another $3.2 billion to him."
12. Engage co-conspirators to cover up, distract, do your dirty work
Reuters: "Former Merrill Lynch CEO John Thain was fired after a scandal over the billions in Merrill bonuses. He says big insider bonuses don't cause excessive risk-taking nor the financial crisis." He blames "poor risk management, excessive leverage, and too much liquidity for too long.Ē
13. As money-hungry vultures they prey on vulnerable Americans
McClatchy News: "An obscure Goldman subsidiary spent years buying hundreds of thousands of subprime mortgages, many from the more unsavory lenders. The bottom fell out. Now, Goldman has become one of America's biggest, greediest foreclosers."
14. Treat everyone not in the 'Happy Conspiracy' with tough love
HuffPost's Leo Leopold warns: "Each day reveals how we've traded away our sense of decency and the common good in exchange for pure greed. Unemployment means hunger. The Agriculture Department reports 49 million Americans don't have enough food, up 13 million over the last year, highest number ever." Wall Street treats anyone as morally defective in need of "tough love."
15. Addicts consumed by money: 'Jesus would throw them out ...'
New York Times' Maureen Dowd: "We have two economies. In the past decade Wall Street's shared little with society. Their culture is totally money-obsessed. There's always room for a bigger house, bigger boat. If not, you're falling behind. It's an addiction. The bankers who took taxpayer money, pocketing obscene bonuses, are the same greedy types Jesus threw out of the temple."
Warning: Washington, Main Street, none of us has "clean hands." We're all in bed with the "Happy Conspiracy," touched by greed, "lack a moral compass."
JJS: Perhaps it will take a moral awakening to see that itís OK to get comfortable from real estate -- actually land values -- but itís something we must do together. It's together that we generate the value of locations, while it was none of us who created nature. Once we wake up, we can adopt geonomics -- de-tax our efforts, share the worth of Earth. If we share site rent, it wonít be available for usurpers but instead a fair share would land in every pocket.
Jeffery J. Smith runs the Forum on Geonomics.
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