Paul B. Farrell on Goldman Sachs and its Absolute Power

Here are a few excerpts from a column on Goldman Sachs (GS) and who they really work for, by Paul Farrell. It’s a good read, but rather disturbing.

From MarketWatch: “Hank the Hammer” Paulson, iconic Wall Street hero, a Trojan Horse placed inside Washington by Goldman Sachs as Treasury Secretary in control of America’s $15 trillion economy.

Six short months ago [Henry Paulson] led an assault on Congress….with just a two-and-a-half page memo in hand…[he demanded] $750 billion, absolute control, total secrecy, no accountability and emergency powers to act immediately … warning that inaction was not an option, that collapse of America’s banking system was imminent, would bring down the global monetary system, pushing world’s economies into a “Great Depression II.” Congress surrendered.

[D]uring the market meltdown six months ago the $700 million personal fortune [Paulson] built at Goldman was threatened by Goldman’s huge $20 billion derivatives exposure at AIG: Suddenly his responsibilities at Treasury merged with a strong self-interest in protecting his personal fortune. AIG was “saved.”

Here’s how it worked: The Hammer conned a clueless Congress, then shelled out $350 billion of our taxpayer money (Helicopter Ben Bernanke helped by upping the ante with a couple trillion side-bet), buying toxic debt to save his ol’ Wall Street buddies. They stopped lending and used the dough to doctor their balance sheets.

So no surprise that Goldman, Wells Fargo and J.P. Morgan Chase are now reporting “blockbuster” first-quarter earnings…while just months ago “many of the nation’s biggest banks were on life support.”

…They screwed taxpayers and borrowers so they can repay TARP with…our recycled TARP money. Now it’s back to business-as-usual, with no restrictions on CEO pay and bonuses … no thank-yous … no admissions of guilt … while some even arrogantly deny that they ever needed TARP money.

Hank, Goldman and Wall Street’s mercenaries are winning the war. Read and weep Portfolio’s chilling finale: “….Geithner’s appointment are the completion of Goldman’s meticulously crafted plan to become a superpower. The firm now has the clout to impose its will on the financial markets, and the world.”

To think greed and big money influencing government is something new, is a naive notion. As far as Goldman Sachs story goes, the reality is Paulson used his chairmanship at the Treasury to successfully get rid of Goldman’s two strongest competitors, Sterns and Lehman – then orchestrated a bail-out designed to solidify his co.’s power and an AIG deal to further Goldman’s profits. Some may call this corruption, some will say it’s just a GS-type strategy. You decide.

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