Friday, April 23, 2010

Cynical POTUS Decries Cynical Politics of Financial Bill

One week ago the SEC filed suit against Goldman Sachs. For a year and a half, Goldman Sachs has been under investigation for its part in the financial difficulties facing our economy. Why did the SEC choose last Friday to file suit? Even the least cynical of political observers are nodding agreement with the rest of us- it was all about trying to jump into the administration's next large item of their agenda: financial reform. Standard courtesies typically extended were foregone. The CEO of Goldman Sachs learned of the decision through the media, not from the SEC. Typically, a firm is given a heads-up by the SEC if action will be taken. Not this time. This time, it was The New York Times that received the heads-up. And, to further make the process sleazy, the filing of the suit was done during trading hours, not after hours as is customary.

All of this action led up to the president's visit to NYC yesterday to scold Wall Streeters and try to act as though he is righteously indignant about their business practices. It was a dud of a speech and not well received, as one would imagine. Talk about biting the hand that feeds you and your party. The CEO of Goldman Sachs attended the farce of an event.

As is his habit, the president used his favorite straw men in talking about opposition to his bill as it now stands. What he didn't bother to talk about was the fact that Senate Majority Leader Reid has decided he doesn't need no stinkin' bipartisan support for it and is trying to speed up the vote. The House has passed it and now Harry is under the gun. The reason for little bipartisan support as it now stands? Reid is insisting on leaving in a permanent $50 billion slush fund to be administered by the Executive branch, for bailing out those deemed 'too big to fail". The GOP wants it taken out and so does, as a matter of fact, the president. Reid and his fellow Democrats in the senate leadership wants it left in. That is the biggest hurdle now.

On Goldman's visits to the White House:
Goldman's connections to the White House and the Obama administration are raising eyebrows at a time when Washington and Wall Street are dueling over how to overhaul regulation of the financial world. And this -
Goldman is retaining former Obama White House counsel Gregory Craig as a member of its legal team. In addition, when he worked as an investment banker in Chicago a decade ago, White House Chief of Staff Rahm Emanuel advised one client who also retained Goldman as an adviser on the same $8.2 billion deal

It's just all a bit too cozy to allow the president to allege that it is in any way only the GOP that is in bed with the Wall Street titans. That stereotype no longer applies within the framework of financial reform debate. In truth, recent election cycles have shown it is the Democratic party that receives more campaign contributions than the Republican party. Obama snarls about the 'fat cats' on Wall Street as he takes their campaign contributions, hand over fist. In the 2008 election race against John McCain, Obama's campaign received just under $1 million dollars from Goldman Sachs employees alone.

How about the staunchest of Democrats - the union 'fat cats' - and their relationship to this administration? The Heritage Foundation tells that tale: Big labor's ties to this White House are already well documented. Less known is just how close Obama administration interests align with the big firms that benefit most from the TARP bailout. The Washington Examiner reports that at Goldman Sachs, the nation's largest investment bank, four of the five in-house lobbyists were Democratic Capitol Hill staffers -- the remaining one gave $1,000 to Hillary Clinton last election.

Goldman Sachs stock is down 15% since the action taken last Friday. The vote by the SEC to pursue the lawsuit right now went along party lines - the three Democrats voted for it, the 2 GOP members voted against the decision to move now on it. It's a purely political stunt to increase pressure on Republican senators to vote yes to the president's bill.

So far in 2010, 62% of political contributions by Goldman Sachs employees have gone to Democrats. The White House denies the obvious link between a Google search of the words "Goldman SEC" and the paid sponsorship link that takes the searcher first to a website raising money for Obama. This proves that it is an orchestrated attempt to influence the public, paid for and implemented in advance of the Friday announcement.

There is no fix for the Fannie Mae and Freddie Mac debacles in this bill. Long ago these two programs were shown to be problematic at best. In 2003, then Treasury Secretary John Snow warned of serious problems with mortgage regulations and the need for a fix. In 2005, the very people writing the new bill were the ones denying any problems from Fannie Mae and Freddie Mac. Democrats blocked any fixing then and now. They were against regulation before they were for it.

The whole 'coincidence' stinks. And the president's call for an end to "cynical" politics in his speech? Laughable. And so very predictable.

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