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April 21, 2010
Is the Goldman-Sachs scandal manufactured? (updated)
Reports coming in point to a scheme by President Obama to create a national scandal by having the SEC charge Goldman Sachs with fraud in order to bolster support for the sweeping financial regulatory reform bill.
An article from the Washington Examiner supports the premise that the president has always been in bed with Wall Street, even though he publicly chastises the ‘fat cats' to win approval from the American people and to ram through his overreaching financial reform. From Tim Carney:
Obama's fundraiser and economic adviser Warren Buffett is very long on Goldman, having bet on them in 2008 in the expectation of a bailout. Mark Patterson, chief of staff to Treasury Secretary Tim Geithner, was a Goldman Sachs lobbyist until months before joining Team Obama.
What does that add up to? Getting a hand in making the regulations:
Politico quoted a Goldman lobbyist Monday saying, "We're not against regulation. We're for regulation. We partner with regulators."
Goldman can play it safe, you see, without needing a regulation. But regulations prevent smaller competitors from taking the risks needed to compete with Goldman (and every competitor is smaller).
Information uncovered by Americans for Prosperity Vice President for Policy Phil Kerpen zeroes in on a specific plot concerning the Center for Responsible Lending based in Durham, NC.
Regarding Senator Chris Dodd's pending permanent bailout legislation which creates a huge new bureaucracy called the Consumer Financial Protection Agency -- and the breaking Goldman Sachs scandal involving hedge fund Paulson & Co. run by billionaire John Paulson, AFP Vice President for Policy Phil Kerpen said:
"It looks like John Paulson made a fortune based on a scheme in which he paid the Center for Responsible Lending $15 million to shake down and harass banks into making bad loans, which Paulson then bet against with the help of Goldman Sachs.
"Now Treasury official Eric Stein, who for years worked for the Center for Responsible Lending, is expected (if the bill he helped design passes) to be installed as the head of the so-called Consumer Financial Protection Agency, a huge new bureaucracy with sweeping powers to reward CRL donors and supporters while punishing competitors who aren't in on the scheme.
Let's hope and pray that the forty-one Republican senators hold onto their convictions this week, and stop this egregious abuse from going further. No doubt, Obama and company will be making phone calls, office visits, and threats to every single one of them.
Thomas Lifson adds:
Sebastian Mallaby of the Washington Post is also suspicious: (hat tip: Ed Lasky)
J.P. Friere of the Washington Examiner compares Enron's ties to Bush and Goldman's ties to the Obamanauts:
Then there is the awkward matter of Goldman's choosing of a White House insider as its defense counsel, from Tim Carney of the Washington Examiner: