I’ve got no idea what communications operative decided to run with this inane spin (in my experience they’re nearly all dumb enough to do such a thing) but it has the potential to torpedo Steven Kaplan’s nomination.
The issue is simple: it’s hard not to look at the events surrounding the 2008 financial market meltdown and ascribe some portion of blame to Goldman Sachs, the 800 pound gorilla on Wall Street. As Michael Lewis’ bookThe Big Short made plain, its bankers were selling mortgage-backed securities they were fairly certain would crater, while also allowing other customers to bet on precisely that outcome.
When the bottom fell out of the market, Goldman Sachs emerged more or less unscathed despite its exposure--largely thanks to a massive government bailout of AIG, which had sold them “insurance” on billions of dollars of their investments that turned out to be worthless, a fact that would have become evident had Goldman’s alleged geniuses given it even a cursory thought. But they didn’t, in part because they knew that they were too important (or politically plugged in) to fail. Having a Goldman alum running the Treasury helped assuage any fears.
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