Saturday, April 24, 2010

Devil in the Details

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To help strengthen his push for greater regulation of Wall Street, Barack Obama is demonizing Goldman Sachs as being corrupt and not looking out for "the little guy."

Then who has Goldman Sachs been looking out for? Oddly enough, it's Barack Obama.

In 2005, Republicans wanted additional regulatory power over lending institutions - including the soon-to-fail Fannie Mae and Freddie Mac. But Democrats, including Senator Obama of Illinois, unanimously opposed it.

Which is why, in 2008, Goldman Sachs and its employees said "thank you" by giving candidate Obama over $950,000 in campaign funds. In fact, it was the largest single source campaign contribution since the beginning of campaign finance reform.

(As an interesting aside, in taking the money Obama broke a solemn campaign promise and an agreement with John McCain that he would run only on public funds to avoid corruption and influence peddling. In fairness, John McCain was pretty much the only person who actually believed him.)

Since January of 2009, Goldman Sachs has passed out another $900,000 in campaign funds...69% of which went to Democrats. And surely they expect to get a good return on their investment.

The financial regulation proposed by the Obama administration will be bad for Wall Street in general, but not particularly hard on those devilish companies that had the foresight to, in the words of one financial services lobbyist, give the Democrats "an assload of money."


Pete said...

Double cubi-metric assload, looks to me..

Anonymous said...

Obama doesn't want to fix problems; he wants more power. Plus, more rules and regulations will create more incentives for people to cheat in spectacular and increasingly devious ways. Where was the SEC when the Madoff scheme was reported to them? Busy watching internet porn? Government regulatory agencies are as easily politicized as any other government group. I haven't used the word corrupt. Yet.

Anonymous said...

But will we hear about those campaign contributions from the mainstream news media? Most likely not. Considering that the MSM pushed so hard for their new messiah just so they wouldn't have to protect Bill Clinton's legacy any more, they aren't going to let the truth out if they can help it.

David Rockfeld said...

"But will we hear about those campaign contributions from the mainstream news media? Most likely not."

Let's hope not, actually. McCain got $$ too. If word gets out, let's make sure that -that- fact does NOT, please. The data is available at OpenSecrets, and though he got less in the 2008 election, he got quite a bit. I don't see that it would be useful if that fact were made public.

"The financial regulation proposed by the Obama administration will be bad for Wall Street in general"

How so? Genuinely curious. I have not heard much about what is in the bill so I do not know what this refers to but I think it's important to know.

Stilton Jarlsberg said...

David Rockfeld- In fairness, we should point out that plenty of money goes to candidates on both sides of the aisle, and usually with the expectation that wheels (among other things) will get greased.

Regarding the reasons the financial regulatory legislation would be bad for Wall Street, you'll really need to consult a more authoritative source than Hope n' Change. But in general, the language is broad enough that it will impact not only the "bad actors" (who should be reined in) but other financial players...crippling some legitimate investment companies (this, per Warren Buffet). Additionally, some of the provisions of the bill would actually give the "too big to fail" companies a competitive advantage over their smaller brethren...which, perversely, will make then even bigger, while doing little to reduce the possibility of insolvency or the need for a government bailout. And of course, the regulation doesn't even mention Fannie Mae or Freddie Mac.

In a nutshell, we're in favor of Wall Street regulation...just not this regulation.