Too Big to Fail or Too Connected?

Posted by Tina

Jack I hope you, and of course our readers, will slog through the article, “Goldman Sachs Prospers at Tax Payer’s Expense,” by Fred N. Sauer in The American Thinker. You would probably understand the nuts and bolts of the article better than I but even with my limited knowledge I was able to understand the gist of it. The bottom line isn’t exactly new, althought the particulars are to me. It’s disturbing to say the least:

The real crime of the matter is revealed by our discovery of exactly the nature of Goldman Sachs Mysterious Business. Quite simply, the Mysterious Business is the largest highly leveraged hedge fund in the world that is run exclusively for the benefit of the employees of Goldman Sachs. All risks are absorbed by the Federal Reserve System with the U.S. taxpayers standing by at all times as ultimate guarantors.

Except for this alliance, Goldman Sachs would have disappeared under the waves of the financial crisis whose destructive excesses could no longer be prevented by the Glass-Steagall Act. The process by which this happened is a disgrace at best.

Robert Rubin left the top of his career at Goldman Sachs in 1995 to become Treasury Secretary in the Clinton Administration. He quickly, and controversially, disbursed $20 billion to support the bailout of Mexico’s government bond market in which Goldman Sachs had extreme, if not life threatening, risk. He then became the architect and engineer of the removal of the Glass-Steagall Act whose principal immediate beneficiary would be Sandy Weill, who would make billions by merging his Travelers Group into Citicorp. Not surprisingly, Robert Rubin would go to work almost immediately for Sandy Weill as a top executive for Citicorp.

When the dust finally cleared, it became obvious that the demise of Glass-Steagall allowed the risk-taking traders at Citicorp to jeopardize nearly $1 trillion worth of customer deposits, which is the main reason the feds had to spend so much bailing it out. With that, Bob Rubin’s Wall Street career was over. He was forced to resign from the Citi board and the firm itself with his reputation in tatters, but not without earning more than $100 million. (emphasis mine)

DemocRAT lending regulation written under Clinton and Carter, DemocRAT executives at Fannie Mae, and DemocRAT executives at Goldman Sachs and Citicorp managed to orchestrate some very heavy duty destruction on the American people while positioning themselves to make a lot of money. The rats in the system need to be stopped. One way to begin would be to rid ourselves of these corrupt players when we discover their corrupt ways. Unfortunately those that are elected have supporters that are both dumb and loyal…and so they just keep rewarding them. Others are protected by the very legislation that made it possible for them to set up the scams in the first place. They were in business to help themselves to as much cash as they could.

This is not an example of greedy corporate America or greedy Wall Street. It is an example of using the political system to manipulate business operations and practices for personal gain. It is corruption at the highest levels. Interesting that many of those who benefited from these schemes also are the ones likely to point fingers at corporate America and Wall Street as the greedy bad guys. They do it under cover of being the ones who care most about people, ie, loans for people who can’t afford them.
They do it to provide a target for all of the anger the public rightly feels.

The word that best fits these jerks is decivious. They are people who are both deceptive and devious, working within our political/economic system for their own personal benefit and gain.

Hey, if Sarah Palin can create a new word, refudiate, why not I?

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4 Responses to Too Big to Fail or Too Connected?

  1. Quentin Colgan says:

    “[A democrat] then became the architect and engineer of the removal of the Glass-Steagall”
    Excuse me, but I think the architects and engineers of the Graham-Leach-Biley Act were Messrs. Graham, Leach, and Biley!
    THIS is why nothing gets fixed, Tina. You foolishly believe only ONE party is involved in the sodomy of America.
    You foolishly believe everything your party tells you.

  2. Tina says:

    Q: “Excuse me, but I think the architects and engineers of the Graham-Leach-Biley Act were Messrs. Graham, Leach, and Biley!”

    True..they were responsible for getting the legislation through Congress. they also believed philosophically that it would be good for business given the competitive nature of business in the modern world. They were not, to my knowledge, passing the bill to enrich themselves or create a fantastic personal opportunity for themselves. Rubin and others were. Let me remind you…as you have reminded me…Bill Clinton signed the legislation. What is also true is that he and Rubin were the architects of the move to repeal Glass Steagall.

    I know you hate cut and paste but since I’m not an expert and not connected except by the internet here goes:

    http://www.allbusiness.com/government/business-regulations/500983-1.html

    Robert E. Rubin, secretary of the Treasury, recommended that Congress pass legislation to reform or repeal the Glass-Steagall Act of 1933 to modernize the country’s financial system. In testimony before the House Committee on Banking and Financial Services, Rubin said Clinton administration proposals would permit affiliations between banks and other financial services companies, such as securities firms and insurance companies. However, the secretary emphasized that the Clinton administration did not endorse affiliations between banks and industrial companies.

    Rubin said supporters of the act today say Glass-Steagall is necessary to protect the federal deposit insurance system.

    “However,” said Rubin, “the banking industry is fundamentally different from what it was two decades ago, let alone in 1933.” He said the industry has been transformed into a global business of facilitating capital formation through diverse new products, services and markets. “U.S. banks generally engage in a broader range of securities activities abroad than is permitted domestically,” said the Treasury secretary. “Even domestically, the separation of investment banking and commercial banking envisioned by Glass-Steagall has eroded significantly.”

    Rubin said Glass-Steagall imposed unnecessary costs and made providing financial services less efficient and more costly. He said the act can “conceivably impede safety and soundness by limiting revenue diversification.” Rubin also said many legitimate concerns were addressed adequately outside the act, including the numerous steps taken to safeguard against risky and abusive bank transactions and to protect the deposit insurance fund.

    http://my.opera.com/richardinbellingham/blog/show.dml/1796860

    The CFR is The Sovereign in North America’s commerce, investment and governmental activity and endeavors.

    The CFR, through its agents, primarily Sanford Weill, Bill Clinton and Robert Rubin repealed the Glass Steagall Act.

    http://www.allbusiness.com/government/business-regulations/500983-1.html

    Robert E. Rubin, secretary of the Treasury, recommended that Congress pass legislation to reform or repeal the Glass-Steagall Act of 1933 to modernize the country’s financial system. In testimony before the House Committee on Banking and Financial Services, Rubin said Clinton administration proposals would permit affiliations between banks and other financial services companies, such as securities firms and insurance companies.

    http://www.prospect.org/cs/articles?articleId=12573

    Rubin’s crowning achievement was the repeal of the 1933 Glass-Steagall Act, which had separated largely unregulated and more speculative investment banks like Goldman Sachs from government-supervised and -insured commercial banks like Citi, which play a key role in the nation’s monetary policy. Glass-Steagall was designed to prevent the kinds of speculative conflicts of interests that pervaded Wall Street in the 1920s and helped bring about the Great Depression (and reappeared in the 1990s).

    Financier Sanford Weill gradually assembled the empire of insurance, commercial-banking, and investment-banking pieces that ultimately became Citigroup, helped by indulgent regulatory policies promoted by Federal Reserve Chairman Alan Greenspan and Rubin. When Congress formally repealed Glass-Steagall, in November 1999, the act was termed in some circles the “Citigroup Authorization Act.” Rubin had stepped down as treasury secretary that July. His new job, announced in late October, was chairman of Citi’s executive committee. Rubin’s initial annual compensation was around $40 million.

    You can find an excellent history done by PBS at the following link”The Long Demise of Glass Steagall” PBS:

    http://www.pbs.org/wgbh/pages/frontline/shows/wallstreet/weill/demise.html

    Crooks will find a way around ANY regualtion that is put in place. It seems to me that there is a difference between being a crook, using political clout tp game the system and writing legislation that is beleived will promote competition and business. The crooks should be routed out.

    My association with the Republican Party has nothing to do with outrage over political opportunism and theivery. If you have evidence that Graham, Leach, or Biley shared Rubin’s (and Clinton’s) motivations or enriched themselves in similar fashion I’d be happy to condemn them as well.

    Parties are not people. Mu association has to do with power. Republican Party ideals more closely reflect my own so therefore I am more likely to support them in having power in Washington. This does not mean I think that individual representatives are angels or that they always do the right thing.

  3. Harold Ey says:

    In Addition to Tina’s information on the Graham, Leach, and Biley! (Good Job, cut and paste shows we are looking and learning) which as pointed out was replacing the FDR inspired but now disintegrating Glass-Steagall act of 33, not only was it ‘Signed by Clinton’, it had been overwhelmingly passed (90% plus) by both sides in both houses of Congress. So Q what was your point again about only one party?
    However, when it comes to electing anyone this would be my opinion!
    ‘Too many political leaders act too irresponsibly, failing common sense or foresight. However the biggest failure in politics is always the voter’.

  4. Tina says:

    Harold I’m with you!

    The voters in America have been terribly indifferent and have signaled to the politicians for a long time that we don’t care how they behave or what they do. That’s why TPers, radio personalities, bloggers and others are making so much noise now.

    The sleeping giant has awakened! We are dedicated to the pursuit of the truth and determined to make our voices heard. We are demanding a much higher level of integrity from those who serve and more thoughtful consideration about the ultimate consequences of their actions for all Americans.

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