The Usual Fraud and Deceit in DC

April 21, 2010 at 10:10 (Economy, General Stupidity, Politics, Society)

Do you know who have been the historic supporters of government regulation of businesses and banks? Businesses and banks. Why? Because first, it discourages competition – the big guys can afford the fees and the time and paperwork required. The small guys just can’t handle that and they fall by the wayside. Secondly, it helps companies keep track of their competitors by forcing them all into the same mold. You don’t have to worry about the guy on the other side of town because you both have the same playbook. This lessens risk and thus makes the idea of capitalism and free enterprise a joke.

You know, in other times the second bit would have caused a huge scandal, and words like collusion would have been thrown around. What’s the difference between the government forcing all business and banks to follow the same playbook, or business owners in a smoky back room agreeing to follow the same playbook? Not much.

Anyway, here’s more collusion…uh, I mean regulation. And note that Goldman Sachs is giddy about it.

President Bush’s connections to Enron were well-hyped during the company’s accounting debacle that rippled through the economy. Time magazine even had an article called, “Bush’s Enron Problem.” The Associated Press ran with the headline, “Bush-backing Enron makes big money off crisis.” David Callaway wrote that Enron for Bush was worse than Whitewater for Clinton.

In 2002, the New York Times wrote: “President Bush is seeking to play down his relationship with Enron’s embattled chairman, Kenneth L. Lay. But their ties are broad and deep and go back many years, and the relationship has been beneficial to both.” (h/t Lachlan Markey)

But the mere $151,722.42 (inflation adjusted) in contributions from Enron-affiliated executives, employees, and PACs to Bush hardly add up to Obama’s $1,007,370.85 (inflation adjusted) from Goldman-affiliated executives and employees. That’s also not taking into account how much Goldman contributed to Obama cabinet member Hillary Clinton ($415,595.63 inflation adjusted), which was itself almost three times as much as Bush received as well.

It would be fair to say that the total amount the Obama administration has received from those affiliated with Goldman Sachs is ten times that of what Bush received from Enron.


What does that add up to? Getting a hand in making the regulations:

Politico quoted a Goldman lobbyist Monday saying, “We’re not against regulation. We’re for regulation. We partner with regulators.” At least three times in Goldman’s conference call Tuesday, spokesmen trumpeted the firm’s support for more federal control.

… Goldman’s annual report explicitly endorsed stricter federal capital and liquidity requirements. Goldman reported on the conference call that it holds 15 percent “Tier 1 capital,” meaning it is very liquid and not very risky. Goldman can play it safe, you see, without needing a regulation. But regulations prevent smaller competitors from taking the risks needed to compete with Goldman (and every competitor is smaller).



  1. Stephen Driscoll said,

    The Goldman Sachs situation is miles short of Enron at the moment. The fraud they are accused of bears very little resemblance.

    With regard to GS, their is still so much uncertainty about what evidence the SEC actually has.

    If GS is exposed for more serious crimes, then I have no doubt that Obama will feel some heat.

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