Goldman Sachs Scandal
Could Play a Positive Role in Europe,
Toward Re-enacting Glass-Steagall
April 23, 2010 (EIRNS)The widening scandal around Goldman Sachs, in the wake of the civil suit brought against the firm by the Securities and Exchange Commission, could be used to very positive effect, for creating the climate to implement the needed radical economic reforms, such as Glass-Steagall. Senator Carl Levin (D-Mich.), chairman of the Permanent Subcommittee on Investigations, has taken the lead in scheduling testimony by major players in the scandal, turning his subcommittee into the facsimile of a Pecora Commission hearing against those crooks who created the financial crisis.
Senator Levin has scheduled a full day of hearings for Tuesday, April 27, which will reportedly include both the trader at Goldman Sachs who is accused of carrying out the fraud, Fabrice Tourre, and Goldman's CEO, Lloyd Blankfein. Levin held a press conference on April 22, where he announced that he had uncovered new documents, which he believes amounts to "another big shoe to drop on Goldman."
The open secret around Capitol Hill and Wall Street, of course, is that Goldman is doing what every other firm was doing in ripping off their investors. Having shredded the protections which were put in place by FDR, Wall St. has an open field for such shenanigans, as numerous columnists, like William Greider, have pointed out. Within this climate, the words "Glass-Steagall" are being uttered more and more frequently as the potential solution. Sen. Maria Cantwell (D-Wash.), a co-sponsor with John McCain of a bill to restore Glass-Steagall (There's a complementary bill sponsored by Maurice Hinchey (D-N.Y.) in the House), declared her intention to take further action on that bill in the near term.
The Europeans are also taking notice of the Goldman scandal, with an investigation having been opened by the British Financial Services agency. Even more interesting was a proposal floated April 23 by the Tuebingen-based investment consulting firm, Thallos. Thallos issued a statement denouncing the alleged "Greece Aid" as a bailout, basically, of Goldman Sachs. Thallos calls for politicians instead to investigate the bank's ominous Greek deals, declare those deals as null and void, and force Goldman Sachs, which is the source of the acute problems, to pay for Greece and for the Greek citizens.