On the evening of Scott Brown’s election, I wrote that among the reasons for his victory was resentment of “a host of actions to prop up Wall Street firms at the expense of taxpayers.”
Who would have thought that less than six months later Brown would cast the decisive vote in favor of legislation that institutionalizes Wall Street bailouts, and whose sponsors — Christopher Dodd and Barney Frank — played key roles in bringing on the meltdown, not to mention representing everything that is sleazy and corrupt about Washington. If Brown wasn’t running against Barney Frank when he railed against the “machine,” then what was he talking about?
With the SEC now charging Goldman Sachs with a billion dollar fraud, I hope CEO Lloyd Blankfein and his colleagues will end the sanctimony and indignation that has characterized their response to recent criticism of the firm, some of it coming from these quarters. The SEC charges come a day after reports surfaced that Goldman director Rajat Guptatold is under investigation for his possible role in the separate Galleon insider trading case.
We do not subscribe to the wilder conspiracy theories about Goldman, but we do have serious concerns in two areas:
One of the more entrenched principles in business is "pay for performance," the rewarding of executives with raises, bonuses and other forms of compensation if they meet or exceed expectations. Fannie Mae and Freddie Mac, now wards of the federal government, are negations of that principle. The troubled secondary mortgage lending giants, already having received more than $110 billion in federal subsidies since the fall of 2008, are set for another major feed at the public trough. On December 24, the U.S. Treasury Department, facing a December 31 deadline, approved a no-limit hike in the publicly-traded companies' combined $400 billion credit line. Were that not enough, regulators approved an annual compensation package of up to $6 million for each chief executive officer. Welcome to pay for performance, Obama-style - not that the Bush version was a bargain.
NLPC has filed a shareholder proposal asking Goldman Sachs to report on the science behind its embrace of global warming in the wake of the ‘Climategate’ scandal.
Goldman’s ‘climate policy’ is more than corporate public relations. In 2007, Goldman participated in the buyout of energy firm TXU. The transaction resulted in the cancelation of 8 of 11 planned coal-fired power plants after pressure from environmental activists.
It might make wealthy financiers in New York City feel good about themselves to scotch electric generation in the name of environmentalism, but it has negative consequences for ordinary people. Electricity is a basic need, like food and medical care. Cancelling plants while parts of the country face regular power shortages, and raising the cost of electricity for consumers, is positively immoral.
Submitted by NLPC Staff on Wed, 01/14/2009 - 01:00
Peter Flaherty, President of the National Legal and Policy Center (NLPC), today made the following statement:
President-elect Obama should withdraw Timothy Geithner’s nomination for Treasury Secretary. Obama says that middle–class families with incomes of $250,000 are wealthy and their taxes should be raised, but he wants a Wall Streeter who didn’t pay his taxes to be his point man on the economy.