The Shady Inside Deals That Are Protecting Goldman Sachs at Your Expense
Theyâre privately protecting their interests as they publicly urge austerity on everyone else.
January 12, 2013
The Greening of Goldman Sachs
In economist and New York Times columnist Paul Krugmanâs book, End This Depression Now!, thereâs a chapter titled âThe Second Gilded Ageâ in which he describes the extraordinary rise in wealth and power of the very rich during this era of unregulated greed. Since Ronald Reaganâs election in 1980, the top one percent of Americans have seen their incomes increase by 275 percent. After accounting for inflation, the typical hourly wage for a worker has increased just $1.23.
Big Money, as Krugman writes in his book, buys Big Influence. And thatâs why the financiers of Wall Street never truly experience regime change â their cash brings both political parties to heel. So it is that the policies that got us where we are today â in this big ditch of chronic financial depression â have done little for most, but have been very good to a few at the top.
But theyâre not satisfied with having only most of it â they want it all. If Krugman were writing his book today, he could find plenty of evidence in the deal that supposedly kept us from going over the fiscal cliff. Behind closed doors, Congress larded it with corporate tax breaks worth tens of billions of dollars â everything from tax credits for NASCAR racing and the railroads to subsidies for Hollywood, rebates for the rum industry and loopholes for off-shore financing that could help giant multinationals like General Electric avoid billions of dollars in corporate income taxes.
Writing in the conservative Washington Examiner, columnist Tim Carney says many of these expensive giveaways were âspawned by a web of lobbyists, donors and staffers surrounding Democratic Sen. Max Baucus of Montana,â chairman of the Senate Finance Committee. As we know from the Obamacare fight, Baucus is a connoisseur of revolving door corruption. âPick any one of the special-interest tax breaks extended by the cliff deal,â Carney wrote, âand youâre likely to find a former Baucus aide who lobbied for it on behalf of a large corporation or industry organization.â Even the pro-business Wall Street Journal was appalled. They called it a â Crony Capitalist Blowout.â
And so it was â and more. It was payback time for all those campaign donations. CEOs and lobbyists were tripping over themselves as they traipsed up and down Pennsylvania Avenue between Congress and the White House. Youâve no doubt heard about Fix the Debt, that group of business execs and retired politicians taking out TV ads and campaigning to slash the deficit. In The New York Times, Nick Confessore reported, ââŚclose to half of the members of Fix the Debtâs board and steering committee have ties to companies that have engaged in lobbying on taxes and spending, often to preserve tax breaks and other special treatment.â
Get it? Theyâre privately protecting their interests as they publicly urge austerity on everyone else.
Lloyd Blankfein, CEO and chair of the global investment giant Goldman Sachs, is on Fix the Debtâs Fiscal Leadership Council. Hereâs what he said when asked by CBS Newsâ Scott Pelley about how he would reduce the federal deficit: âYouâre going to have to undoubtedly do something to lower peopleâs expectations â the entitlements and what people think that theyâre going to get, because itâs not going to â theyâre not going to get itâŚ Social Security wasnât devised to be a system that supported you for a 30-year retirement after a 25-year careerâŚ in general, entitlements have to be slowed down and contained.â