Taibbi: Goldman lied to investors and lied to Congress. So why isn’t it prosecuted?

May 17th, 2011


Matt Taibbi, the Rolling Stone journalist who famously dubbed Goldman Sachs a “great vampire squid” in a seminal article published in July 2009, recently wrote another about the New York-based investment bank (The People vs. Goldman Sachs).

Writing on Clusterstock, Henry Blodget, co-founder and editor-in-chief of Business Insider, said this one is “potentially more devastating”.

In the above clip from Yahoo! Finance’s Daily Ticker, Taibbi is interviewed by Blodget and co-host Aaron Task. Taibbi argues that Goldman Sachs executives not only lied to their own investors when fobbing them off toxic mortgage securities it had created in 2006-07, but more importantly the Wall Street firm also lied to Congress about this hoodwinking of investors. Here I quote from Blodget:-

Unlike other commentators who grouse about how Wall Street execs should be tossed in jail, Taibbi actually provides specifics. He takes quotes from some of the Goldman execs who testified, including CEO Lloyd Blankfein and CFO David Viniar, and then juxtaposes them with what he believes to be the truth at the time.

One of the biggest frustrations most people have about the financial crisis is that no one has yet been held accountable for it. In prior crashes–the S&L collapse, the 1987 crash, the dotcom bubble–prosecutors had a field day parading villains in front of TV cameras. And yet, this time, despite the financial crisis ushering in the worst recession since the Great Depression, no big shots have gone to jail.

Taibbi vents about this. He also observes that prosecutors have just brought massive, high-profile perjury cases against athletes like Roger Clemens and Barry Bonds, but apparently can’t or won’t do the same with Wall Street executives.

One explanation for this, of course, is that prosecutors don’t think the Wall Street execs are guilty of anything. But Taibbi thinks the explanation is more insidious: An institutionalized double-standard, stemming from the fact that many prosecutors and regulators someday hope to work at Wall Street firms like Goldman Sachs.


Short URL: https://www.ianfraser.org/?p=4069

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