It’s probably easier to make a case for shutting down Goldman Sachs as a threat to national security than bailing them out again:
The collective message of all this – the AIG bailout, the swift approval for its bank-holding conversion, the TARP funds – is that when it comes to Goldman Sachs, there isn’t a free market at all. The government might let other players on the market die, but it simply will not allow Goldman to fail under any circumstances. Its edge in the market has suddenly become an open declaration of supreme privilege. “In the past it was an implicit advantage,” says Simon Johnson, an economics professor at MIT and former official at the International Monetary Fund, who compares the bailout to the crony capitalism he has seen in Third World countries. “Now it’s more of an explicit advantage.” …
And here’s the real punch line. After playing an intimate role in four historic bubble catastrophes, after helping $5 trillion in wealth disappear from the NASDAQ, after pawning off thousands of toxic mortgages on pensioners and cities, after helping to drive the price of gas up to $4 a gallon and to push 100 million people around the world into hunger, after securing tens of billions of taxpayer dollars through a series of bailouts overseen by its former CEO, what did Goldman Sachs give back to the people of the United States in 2008?
Fourteen million dollars.
This is a remarkable tale of parasitical bankers living up to and exceeding every nasty stereotype of evil bankers. If I worked for Goldman Sachs, I’d be retiring before the end of the year and moving very far away from New York City. Once the depression hits in full force next year, a lot of Americans are going to be very, very unhappy. And thanks to Henry Paulson, they’ll have a pretty good idea of who is at least somewhat responsible for their dire straits.