Reply #114: The Ultimate Word: Fight On, Goldman Sachs! By FRANK RICH

[Demeter]

http://www.nytimes.com/2010/04/25/opinion/25rich.html?ref=global

....At Cooper Union on Thursday, the president, while far from fiery, was no longer likening the calamity to a natural disaster beyond anyone’s control. He chastised those in the financial sector who saw the free market as “a free license to take whatever you can get, however you can get it.” He was no longer describing Blankfein, sitting before him, as a “very savvy” businessman — a compliment he had bestowed on him and Jamie Dimon of JPMorgan Chase just 10 weeks earlier.

Still, the Republicans had half a point when they indicted the White House for being too close to Goldman and its brethren. The truth is that both parties are too often in hock to the financial sector, and both parties bear responsibility for the meltdown. In response to a question from Jake Tapper of ABC News last weekend, Bill Clinton was right to say that he and two of his Treasury secretaries, Rubin and Lawrence Summers, “were wrong” to leave derivatives unregulated. They deserve regulation, Clinton said, because “sometimes people with a lot of money make stupid decisions and make it without transparency.”

Those same people also make smart decisions without transparency — smart for them, if not the country. Even if the reform bill does bring stringent regulation to derivatives — a big if — that won’t rectify capitalism’s worst “innovation” in our own Gilded Age: the advent of exotic, speculative “investments” that have no redeeming social value and are instead concocted to facilitate gambling for its own sake. Such are the Goldman instruments of mass financial destruction that paid off for John Paulson. In 2007 alone, according to Gregory Zuckerman in his book “The Greatest Trade Ever,” Paulson’s personal take amounted to over $10 million a day, “more than the earnings of J. K. Rowling, Oprah Winfrey and Tiger Woods put together.” That “financial alchemy,” as Zuckerman calls it, explains why the finance sector’s share of domestic corporate profits, never higher than 16 percent until 1986, hit 41 percent in the last decade.

As many have said — though not many politicians in either party — something is fundamentally amiss in a financial culture that thrives on “products” that create nothing and produce nothing except new ways to make bigger bets and stack the deck in favor of the house. “At least in an actual casino, the damage is contained to gamblers,” wrote the financial journalist Roger Lowenstein in The Times Magazine last month. This catastrophe cost the economy eight million jobs...