Goldman-Sucks Proves the Point Made by OWS

I’ve been recently introduced to the naked capitalism website by fellow blogger Ronni Bennett over at Time Goes By and it has been rewarding beyond my expectations.  It’s a website that, as its name implies, lays an intelligent, critical eye on capitalism as it strips the emperor bare.  Its reports question and often embarrass billionaire Investors, CEOs and their corporate tentacles, giving us a more realistic picture of “corporate personhood”.   There’s also a fascinating animal picture added with each daily submission of their selected links to review, such as this one

The story that caught my eye yesterday may seem small in comparison to bigger events around the world but it serves as a perfect example of why people are out in force at OWS protests across the country and how serious some amongst the top 1% in this country are at crushing every facet of this grass roots movement.

We discover that when Goldman-Sachs chose to become more than an financial investment firm and turned its sights to banking it was subject to the rules and regulations of the Community Reinvestment Act (CRA) whereas all banks are encouraged to “help meet the needs of borrowers in all segments of their communities, including low- and moderate-income neighborhoods.”  Once they sign on to this agreement the appropriate federal financial supervisory agency will “examine banking institutions for CRA compliance, and take this information into consideration when approving applications for new bank branches or for mergers or acquisitions”.

Goldman did this with a small bank in their New York neighborhood, People’s Bank, where over 80% of its member-owners have low incomes and at least 65% are Latino.  Since Goldman was itching to get its greedy hands even deeper into the accounts of everyday people, People’s was a great choice and Goldman was even willing to donate $5000 to help the bank celebrate 25 years at its location.

But herein lies the rub.  Goldman-Sachs’ name was on a donation list with a special honoree – Occupy Wall Street.  This grass roots movement  has labeled one-percenters like Goldman as those who engage in questionable practices that not only widens the income disparity between people like themselves and those  member-owners of People’s Bank, but had a direct hand in the economic collapse of 2008 with their bundled credit default swaps that were intentionally sold to unsuspecting investors, knowing full well that the mortgages they insured were destined to default.

When Goldman discovered this affront to them they insisted that People’s return the $5000 donation and threatened litigation and action that could limit the small bank’s ability to receive funds from other wealthier banks to serve their mission.  Read the full account about this bowel movement by G-S here.

This incident raised the analogous one for me about the self-centered rich kid who takes his ball (the one his dad paid for) and goes home with it when not allowed to dominate the game.  He may discover that some of those playing in the scrimmage are what he views as “undesirables” from another neighborhood.  He refuses to play if they are part of it.    Everybody else doesn’t necessarily go along with this view but they want to play football, not having one of their own.  Besides, the arrogant owner of the ball is a popular jock at school and they want to remain on his good side.

The prevailing tension between these two groups is perpetuated as a result.  That’s been the tradition between them for years and the opportunity to smooth ruffled feathers and perhaps foster a more symbiotic relationship is killed because of the prevailing attitude of an elite group.

Yves Smith, who appears to write most of the material for nc feels, and I agree, that Goldman’s reaction to this was vane and just simply mean-spirited.

“This low grade thuggish behavior over a mere $5,000 illustrates how deeply narcissistic Wall Street has become. Anything that threatens their image, no matter how small, must be beaten back.  Goldman could have been punitive (by threatening never to do anything for the bank ever again) without going to the ridiculous step of threatening litigation over a charitable contribution. How charitable is it, exactly, when you try to attach retroactive conditions?”

Goldman’s “Nelson” character revealed intimidating People’s Bank “Milhouse”

They probably spend $5000 on business lunches routinely.  Their self-serving egos however has only brought home what is fundamentally flawed with the socio-economic structure in this country today.

Goldman-Sachs could have come across as someone willing to close the partisan divide between the haves and have-nots by acknowledging their loan as a move in this direction.  They could have taken the high road and ignored that a perceived enemy shared the limelight with them.  It would’ve been seen by many as a goodwill gesture and disarmed some of their critics who attack them for such arrogance.  Surely FOX and many right-wing bloggers and pundits would have elevated this to a sainthood state.

Corporations have worked feverishly to be seen by the courts as a “person”.  This incident shows that perhaps being an adult person is asking too much of them.  They own the football.  Play by their rules and meet their demands or they will make the game all about them and take their ball home.

Is this the message that hangs over most Wall Street office doors?

“It is really not so repulsive to see the poor asking for money as to see the rich asking for more money.”  – G.K. Chesterson


25 responses to “Goldman-Sucks Proves the Point Made by OWS

  1. This was another great post Larry. You have such a wonderful way of explaining the issue and making it clear. So often, I never know what is going on (LOL) but I get a true sense after I read your work. Freaking Goldman Sachs. They truly are the personification of greed and selfishness.

  2. Perhaps the greatest advantage the rich have over the rest of us is the power to litigate. When an institution, a group, or an individual is threatened with litigation by an entity with limitless lawyers, it’s pretty much “game over.” Lawyers are so incredibly expensive. It doesn’t matter who is in the right. It matters who can pay for lawyers longest.

  3. I want to see some of the execs at Goldman go to jail. I want to see it happen soon so that I can have my faith restored in our justice system. Those people are disgusting.

  4. //the arrogant owner //

    ah, and there is the rub!!!! We can rail against corporations and wall street all we want…. but the REAL PEOPLE who make corporate decisions…..are the ones we need to expose…Koch Industries hides behind the Heritage Foundation and various T-Party groups…..we need to find the kid with the football…instead of talking about the football.

  5. so… I have been on a woody kick….. remember the lines from this Woody Guthrie?

    ” Nobody living can ever stop me,
    As I go walking that freedom highway;
    Nobody living can ever make me turn back
    This land was made for you and me.

    In the squares of the city, In the shadow of a steeple;
    By the relief office, I’d seen my people.
    As they stood there hungry, I stood there asking,
    Is this land made for you and me? “

    • Guthrie was one of the greatest folk singers back then, especially this tune you pointed out and the others that painted a vivid picture of the common man. I love that song. Pete Seeger who rubbed elbows with Guthrie when he was still alive joined Guthrie’s son Arlo recently at the OWG in Columbus to rally the troops with their music. Check it out here

  6. Very well written.

    I was watching Up With Chris Hayes this morning and they spent some time talking about our 2-class legal system.

    They are bullies and they criminals, but our legal system will do nothing about it. The people we rely on to uphold justice when crimes are broken are financially supported by GS and all the other banks/corps/wealthy (Kochs, etc).

    I am a liberal but Obama is as guilty as all of them. They say they are working for the working people, and I do think they are, however, we cannot stop this corrupt system until we have the same laws that apply to all and not a 2 class system.

    Great piece!!

    • I really don’t think these people are evil Angela, at least not all of them. Their perception of what they do is seen to ultimately benefit the economy. I think that’s true to a point but it’s the excesses that a few engage in along with the greed-factor that can knock things out of whack to the point, as it did, where the entire global economy is negatively impacted.

      There’s a new movie out that may still be in some theaters but can also be purchased on pay-per-view sites like VUDU called “Margin Call” with Kevin Spacey, Demi Moore and two fine british actors Paul Bettany and Jeremy Irons. It plays out the scenario with a company that represents either Lehman Brothers or AIG at the threshold of the 2008 recession.

      If you ever get to see this watch the characters played by Spacey and Bettany and you’ll see that there is an ethical look at what these guys do but it’s the fact that their superiors and some of their peers are there to offset and even diminish their efforts.

      • Neither do I….my apologizes if it came across that way. I do believe there are good, ethical people in the financial industry. For decades the banks operated in an ethical, responsible way allowing them to prosper as well as the working class. However, when appropriate regulations are not in place to keep them honest then it tends to corrupt people who would be otherwise descent people.

        With deregulation, insufficient oversight, and the lack of fear of any repercussions for their actions this creates the 2-class legal system and promotes the discourse we are seeing now.

  7. I agree with what you wrote Angela. I’m reading American Mania by Peter Whybrow right now (highly recommended). In it he explains Adam Smith’s thinking in ways I suspect few people understand. Smith would be dismayed at the free market true believers who think market “competition” is the answer to every problem. He also of course didn’t anticipate the global economy and how disconnected corporations are from any particular community of consumers and citizens.

    • Ron, I have made note of the book and will check it out. I just picked up Republic Lost by Lawrence Lessig. I have seen several of his interviews about the book and it seems very appropriate for the conversation our country is currently in…the strength of regulation (our laws) and our banking system.

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