Goldman Sachs Group Inc., the latest victim of draconian politics.
The investment bank was recently charged by the Securities and Exchange Commission (SEC), saying that they, “sold investors a subprime-mortgage investment that was secretly designed to lose value.”
Chuck Colson explains, “The SEC charges that Goldman Sachs sold investments containing mortgage-backs securities, which was, and is perfectly legal. Goldman’s alleged violation of securities law lies in the accusation that Godman was, at the same time, betting that the investments would decline in value. Thus, while investors lost nearly $1 billion, one of Goldman’s prime clients made a billion dollars.”
Analysts with The Wall Street Journal said that the evidential case by the SEC was flimsy. And SEC decided to press charges by a 3-2 party line vote. It smelled pretty fishy, until right after the SEC made their charge the Democrats tried to jam Senator Chris Dodd’s bill through the house. Then it smelled really fishy.
Dodd’s bill would induce the market with more and more regulation on Wall Street. So if Congress could just get everyone into the mind set of “big bad Goldman Sachs banks,” then more would be persuaded to support them in their pursuit of regulation.
National Review depicts the Dodd bill:
This provision is Senate Banking Committee chairman Chris Dodd’s financial-reform bill in a nutshell: a hodge-podge of new restrictions on Wall Street offset by a hearty dose of sweeteners to keep financial-industry cash flowing to Democrats. For every measure that would cut into Wall Street’s profits, another would subsidize its operations. New regulations governing derivatives would cut into the fees investment banks could charge for structuring these customized products. But the bailout authority awarded to the FDIC [Federal Deposit Insurance Corporation] and the Federal Reserve would allow the banks to borrow at reduced rates, with their creditors secure in the knowledge that the government would step in if the market tanked.” National Review, April 26, 2010
While columnists, commentators, and analysts talk about the ethics in Wall Street, what about the ethics in government?