NY Times to Goldman Sachs: Pay up to cut public debt

A New York Times editorial slammed Goldman Sachs for its role in the financial crisis and said that instead of paying big bonuses to its employees it should make a multibillion-dollar gift to help reduce the U.S. national debt.

The editorial, published November 21, attacked Goldman for everything from its top executive's failure to apologize properly for his investment bank's part in creating the crisis as well as Goldman's awarding of bonuses related to profits that the paper said were boosted by a government bailout.

The Times sniffed at Goldman CEO Lloyd Blankfein's acknowledgment last week that his bank "participated in things that were clearly wrong," saying that he was not specific about what the company had done wrong and his remarks did not "come close to an apology."

It cited the company's ability to set aside $16.7 billion for bonuses this year as it was able to post "blowout profits" after receiving a $10 billion government bailout and $12.9 billion in payments and collateral in relation to the government bailout of American International Group.

The paper described Goldman's pledge earlier this week of $500 million over five years to help small businesses as "crumbs from its table," saying it should do much more.

"The money will be welcomed by recipients, but if Goldman wants to make a meaningful contribution, it would have to be in the billions and aimed more directly at taxpayers," the Times said.

It noted, for example, that the federal Bureau of the Public Debt accepts tax-deductible donations to reduce the national debt and urged Goldman to participate.

The paper said that a multibillion-dollar donation from Goldman could be made in such a way

Can you say conflict of interest?

Goldman Sachs Will Be Sitting Pretty With Emanuel in the Obama White House
By Timothy P. Carney, Examiner Columnist, Nov 21, 2008

EXCERPT Today, in these tumultuous times of bailouts and meltdowns when the investment banking leviathan needs Washington more than ever before, Goldman Sachs can leverage its most valuable asset yet White House chief of staff Rahm Emanuel.

Traditionally a Democratic booster, and one of Barack Obama’s top sources of funds in this past election, Goldman has always had particularly strong allies in government.

Rahm Emanuel is one such ally. An interesting early chapter in the Goldman-Emanuel relationship took place in the setting of Bill Clinton’s 1992 campaign for the White House. Clinton hired Emanuel as his chief fundraiser.At the same time, however, Emanuel was on the payroll of Goldman Sachs, receiving $3,000 per month from the firm to “introduce us to people,” in the words of one Goldman partner at the time. This is certainly a noteworthy relationship, but it’s one that has almost entirely escaped scrutiny. (snip)

In his four terms in Congress, Emanuel raised $74,750 from Goldman, making the firm his number four source of funds. Goldman has helped Emanuel. How has Emanuel helped Goldman? The most obvious answer, as mentioned in this column two weeks ago, is in Emanuel’s lead role in shepherding the “$700 billion” bailout—first proposed by former a Goldman CEO, Bush Treasury Secretary Henry Paulson—through the skeptical House.

Of course, back in the Clinton days, Goldman benefited from NAFTA and the bailout of the Mexican currency, with Emanuel pushing NAFTA through Congress, and Rubin hammering out the peso bailout.

Did Goldman improperly funnel money to the Clinton campaign by subsidizing Emanuel’s salary in 1992? Did Goldman’s help to Clinton spur the Democratic president to push NAFTA and the Mexican bailout?

The answers to these questions are opaque, and with Emanuel burrowed deep within the Obama White House, the continued relationship between Goldman Sachs and Obama’s right hand man won’t be easy to follow.

Watch which regulations of Wall Street Obama fights for. Watch where the bailout money goes.

SOURCE http://www.washingtonexaminer.com/opinion/columns/TimothyCarney/ Goldman_Sach_Will_Be_Sitting_Pretty_With_Emanuel_in_the_Obama_White_House_112108.html

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THINGS WE DO NOT KNOW ABOUT RAHM EMANUEL Before he got the WH COS job, did Wall Street Rahm reveal all of his ties to financial institutions?

Not to defend Goldman Sachs, but last quarter it paid $1.6 billion in income taxes.

Billions in income tax will be paid on those Goldman bonuses.

The NY Times shows a credit of $3.2 million in income tax expense for its last quarter.

Question for the NY Times editorial writer:
Which of these two companies is doing more to generate revenue for the Federal government? The one that paid $1.6 billion in taxes plus billions employees will pay in income tax on their bonuses or the one that paid no tax and claimed a credit against future tax bills?

I guess it’s easy to scream that someone else should pay more when you’re not paying anything.

We don’t share in their profits as taxpayers

We did share in the profits. Treasury bought $10 billion of preferred stock last year and got a stack of warrants along with the preferred.

Goldman has repaid the $10 billion along with $318 million in dividends and another $1.1 billion to repurchase the dividends. Treasury made over 14% on the Goldman investment in about 8 months.

I would like to see a serious investigation into why Geithner upped the payouts on the AIG CDS contracts when he was the NY Fed President. It does appear taxpayers got shafted in that deal.

we shouldn’t be forced to share in their losses.

Agreed. We shouldn't have bailed any of them out. I fear all the gov't has done is kick the problem down the calendar a ways.

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