Danny Schechter - ColdType

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revenues. That’s the division, by the way, that I worked in and
that Lloyd Blankfein managed on his way up the Goldman
totem pole. (It’s also the division that would stand to gain the
most if Waxman’s cap-and-trade bill passes.)
Of course, Goldman did pay back the US government which
made a profit on the deal but at the same time, supposedly,
lost any possible leverage on the firm according to President
Obama on PBS, “Now, there are some companies, like Goldman
Sachs, that have paid the money back and that means
that we don’t have the same kind of levers on them that we
might have.”
Why did Goldman pay even more than was expected?
David Reilly of Bloomberg News explained they were worried
about mounting public hostility. “The danger for Goldman is
that it becomes a focal point for populist bailout ire, leading
the government to take a tougher stance on regulation,” he
wrote. “Treating too-big-to-fail institutions as financial utilities,
for example, would curtail Goldman’s ability to generate
returns on equity in excess of 20 percent.”
The hostility to Goldman can be found plastered all over the
Internet. One example, a post by Ilarg on the AutomaticEarth
website: “Two consecutive US governments, both with economic
teams led by “alumni” from Goldman Sachs and other
Wall Street firms, have put $23.7 trillion in US taxpayer money
at risk to rescue their former – and often future – employers.
This has bought the main banks the chance to be left intact
for a while longer (but only for a while), because the only thing
people now can see is the veil the banks hide behind, the most
costly layer of veneer in history.”
The truth is, the government didn’t have many levers on
Goldman in the first place. It seems as if Goldman was the
dominant party in that relationship.
Financial analyst Reggie Middleton offers more details in
his Boom Bust Blog: