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September 8, 2008 5:44:30 AM CDT

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J'Accuse

Posted Dec 3, 07 7:53 AM CST in Business 

(Newser) – In an extraordinary New York Times column Republican/libertarian economist, writer, actor, and lawyer Ben Stein accuses Goldman Sachs of being a willing participant in, and even plotting, the collapse of value in the collateralized mortgage obligation (CMO) market. In the last several years Goldman sold $100 billion of the instruments to investors for substantial fees while at the same time shorting CMOs for profit.

Stein points to a dubious paper written by a Goldman economist—using a "combination of theory, data, guess-work, extrapolation, and what he recalls as history"—that forecasts  dire continuing fallout from the CMO collapse. Stein notes that Goldman was among the top 10 sellers of CMOs while shorting them on a "titanic" scale when current Treasury Secretary Henry Paulson was CEO. He wants an investigation into both Goldman's conduct and Paulson's fitness to serve.

Source New York Times

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U.S. Treasury Secretary Henry Paulson speaks to an audience at the fourth annual China Institute Executive Summit, Thursday, Nov. 8, 2007 in New York. (AP Photo/Frank Franklin II)   (Associated Press)
  (Associated Press Composite)
U.S. Treasury Secretary Henry Paulson speaks to an audience at the fourth annual China Institute Executive Summit, Thursday, Nov. 8, 2007 in New York. (AP Photo/Frank Franklin II)   (Associated Press)
Writer, actor, economist, and lawyer Ben Stein is interviewed in New York in this Nov. 7, 2005 file photo. (AP Photo/Richard Drew, File)   (Associated Press)
U.S. Treasury Secretary Henry Paulson (AP Photo/Rajesh Nirgude)   (Associated Press)
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