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Goldman Back on Top, Thanks to Uncle Sam

Competitors killed off, AIG conveniently saved, bank rakes in profits

By Kevin Spak,  Newser Staff

Posted Apr 15, 2009 8:15 AM CDT

(Newser) – Goldman Sachs reported a $1.8 billion profit yesterday, and it owes it all to its helpful Uncle Sam, writes William Cohan in the New York Times. “Government Sachs,” as it’s come to be known, has been pulling Washington’s strings for years, and now its competitors are all dead or in ruins—thanks largely to former CEO Hank Paulson, who played a key role in the fall of Bear Sterns and Lehman Brothers, and the Merrill Lynch buyout.

But critics see the AIG bailout as “the canvas upon which the bank and its alumni have painted their greatest masterpiece of self-interest.” Why bail out AIG and not Lehman? To save people AIG owed money to—like, for example, Goldman Sachs. Goldman says the $13 billion it’s received from AIG had nothing to do with its first-quarter killing. That’s thanks to some creative accounting, says Cohan. Conveniently enough, Goldman’s re-classification allowed it to leave December, and $1 billion in losses, off the report.

Goldman Sachs CEO and Chairman Lloyd C. Blankfein, left, and JPMorgan Chase CEO James Dimon, testify on Capitol Hill, Feb. 11, 2009, before the House Financial Services Committee.
Goldman Sachs CEO and Chairman Lloyd C. Blankfein, left, and JPMorgan Chase CEO James Dimon, testify on Capitol Hill, Feb. 11, 2009, before the House Financial Services Committee.   (AP Photo/Manuel Balce Ceneta)
Treasury Secretary Henry Paulson participates in a discussion about markets and climate change in this file photo. Paulson was once CEO of Goldman Sachs.
Treasury Secretary Henry Paulson participates in a discussion about markets and climate change in this file photo. Paulson was once CEO of Goldman Sachs.   (AP Photo/Gerald Herbert)
In this Sept. 25, 2008 file photo, Lloyd C. Blankfein, CEO of Goldman Sachs, speaks at a luncheon at United Nations headquarters.
In this Sept. 25, 2008 file photo, Lloyd C. Blankfein, CEO of Goldman Sachs, speaks at a luncheon at United Nations headquarters.   (AP Photo/David Karp, file)
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COMMENTS
Showing 1 of 1 comment
gilgordan
Apr 15, 2009 1:34 AM CDT
Makes all the sense, you have hit the "root cause" of the financial meltdown. SELF, SPECIAL, AND WEALTH INTEREST OVER THOSE NOT IN THE SAME CASTE OF OTHERS. May the all suffer the pain they have created for so many, and be brought to justice.

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