Posted by Tina
Big complicated government is bad news. Government poking its nose into the affairs of business is also bad news. Government forming partnerships and alliances with business is bad news. Government’s roll should be to provide regulations that support clear and open business transactions and discourage unethical or criminal behaviors. Simple rules leave little room for wiggling or finding loop holes. Government should play a neutral roll. So what’s going on here:
“SEC accuses Goldman Sachs of civil fraud,” by Marcy Gordon – (AP) Breitbart
WASHINGTON (AP) – The government has accused Goldman Sachs & Co. of defrauding investors by failing to disclose conflicts of interest in mortgage investments it sold as the housing market was faltering. ** The Securities and Exchange Commission said in a civil complaint Friday that Goldman failed to disclose that one of its clients helped create–and then bet against–subprime mortgage securities that Goldman sold to investors.
In his self-styled war against Wall Street, President Obama appears to have a powerful ally: Goldman Sachs. ** The nation’s largest investment bank, famously cozy with top government officials in both parties, has tipped its hand to its shareholders, indicating that major financial “reform” proposals will help Goldman’s bottom line. ** These are the very “fat cats” to whom Obama directed his trash talk in January: “If they want a fight, that’s a fight I’m willing to have.” Well, it looks like they don’t really want a fight. It looks like they want more regulation. The question is: What’s in it for Goldman? ** If you take Blankfein and Cohn’s word, stricter federal liquidity and capital requirements would amount to regulators doing Goldman’s work for Goldman. They want Uncle Sam to mitigate “uncertainty about counterparties’ balance sheets.” That is, they want the government to reduce the risk that Goldman’s debtors or insurers will run into trouble. ** This is an odd function of government: Making Goldman Sachs feel safer in its business dealings. Blogger Ira Stoll, at his Web site, The Future of Capitalism put it well: It’s one thing for some elderly retail depositor to ask the FDIC to protect her from risk by guaranteeing bank deposits. But the idea that the government needs to run around setting capital requirements to protect Blankfein and Cohn from the risk that their counterparties might go under or get in a liquidity crunch seems a bit odd. Let them protect themselves.”