Live Chat: Robert Scheer on Goldman Sachs

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Feel free to start talking while we wait for Robert Scheer.

Hello

In answering your question ...

Because they got to write the laws, they're basically removed [from] any legal restraint on derivatives. That's the significance of the Commodity Futures Modernization Act that Clinton signed into law in the last month of his presidency; particularly the language of Titles three and four of that law exempted these derivatives from any existing legal restraint or the action of any existing legal regulatory body.

Montaigne in New York asks "Why should anyone, let alone money makers like Goldman Sachs, heed a bankrupt government in hock for $13 trillion? As far as they are concerned, in a twisted morality for sure, the public sector is a loser, deadbeat, to be fleeced at will."

They are not without fault in putting our government into hock; the banking debacle is one of the main reasons why the deficit has gone up these last few years, and they and other top financiers and industrialists have certainly favored major government expenditures on the military, on building of business infrastructure and everything else that allows American corporations to prosper.

It should also be pointed out that the taxation on many of these activities is at a lower rate than individuals pay, particularly that of hedge funds.

Question from Eric in Portland: "On 'Left, Right & Center' you consistently point out the corruption and collusion of this federal government with its subsidiaries, the corporations and banking cartel. Yet most of your proposed solutions would seem to require pristine behavior from the very same government. In what ways do you see the neoserfs of the 21st century taking back control of their lives, outside the Red vs Blue soap opera?"

To begin with, we should restore walls between investment, commercial banking and insurance that existed in the Glass-Steagall Act that would prevent co-mingling of activity between people playing with their own money as investors and that of banks which we, as taxpayers, evidently obligated to bail out. Just as we control loan sharking by demanding well-regulated process and the lending of money, laws that guarantee consumer rights, transparency, trading on regulated exchanges will go a long way to preventing what should be illegal activity ripping off unsuspected costumers.

As for the neoserfs, and if by that you mean the voters, we have to get organized, have our voices heard, hold the politicians accountable, which is why I talk and write so much about this issue. It's called making democracy work.

Top question from Yahoo Answers: "Do you really expect the government to fully investigate any wrongdoing by Goldman Sachs? Come on. What a bunch of baloney. The conflicts of interest are much too great to ignore. Goldman Sachs was the #1 contributor to the Obama campaign. The Obama administration is packed with former Wall Street money men and former Goldman Sachs management. This is simply an acting job by Obama to make it look like they are doing something about corporate crime. What a joke. Note: I am not a Democrat or a Republican. I support justice and third-party candidates."

Look, if you're asking me to shut up and stop writing about this stuff and getting people agitated about their well being, I insist on my right as a citizen to defend my interest and that of other people who work hard, pay taxes and demand justice and I won't accept the idea that Goldman Sachs controls all the action.

3:15 Robert Scheer

Thu, 22 Apr 2010 23:15:29 GMT

Comment:

I don’t accept the assumption that the Obama administration will just roll over for Goldman Sachs and the other Wall Street hustlers. I think not only this administration but even some Republicans will feel the need to respond the immense outrage of ordinary Americans that has left so many millions losing their jobs, savings. I think you’re exaggerating the ability of politicians to ignore the public will. The reason of my writing and speaking out is to get the public out.

3:15 Truthdig

Thu, 22 Apr 2010 23:15:31 GMT

Comment:

Suzannedk from Netherlands asks: “Dear Robert Scheer: Have you heard of or read anything about the Jean-Claude Paye study of how the U.S is changing all laws by challenging each and everyone of them that would stop their road to permanent World War/Corporate Empire? ‘La fin de L’Etat de droit’ published in Paris in 2004 was held from publishing the English translation by the U.S. Intelligence powers until key E.U./U.S. agreements giving the U.S. final rights over International Human Rights Laws were signed. The English translation came out in late 2008, the title chosen first by the author completely changed. Noam Chomsky knows it well. ‘Global War on Liberty’.”

3:16 Truthdig

Thu, 22 Apr 2010 23:16:31 GMT

Comment:

Another question from the Yahoo: “Why are there so many Goldman Sachs executives in our government? Does anyone out there see how this is a huge conflict of interest?”

3:16 Comment from farras abdelnour

Thu, 22 Apr 2010 23:16:55 GMT

Comment: I fully agree that this country needs badly an alternative, viable, and reliable party as a counterweight to the established and corrupt Republicans and Democrats. Nothing will substantially change until this happens.



3:18 Robert Scheer

Thu, 22 Apr 2010 23:18:56 GMT

Comment:

It’s a conflict of interest that was very obvious, or should have been, in the Clinton administration, that of George W. Bush and yes, in the Obama administration. It is in fact outrageous that whether Republicans or Democrats gain control of the White House, that they turn basic control of economy to the wealthiest and most powerful financial contributors that happen to be based out of Wall Street. Moreover, I find it, as the column indicated, very disappointed that Obama would turn over to Robert Rubin, who did so much to create this mess. People like Geithner and Summers and former Goldman lobbyists, yes it is outrageous.

3:19 Comment from Samuel the Brave

Thu, 22 Apr 2010 23:19:07 GMT

Comment: Hi Robert—What do you think the outcome of the SEC suit is likely to be?



3:21 Robert Scheer

Thu, 22 Apr 2010 23:21:53 GMT

Comment:

I’m worried about it because as I indicated before, the laws regulating the activities of derivative traders are very limited. I applaud the SEC for having unearthed this incredibly blatant swindle, which defies all expectations of responsible, financial transaction, and because it is so blatant I hope that it can prevail, but I would never underestimate the power of Goldman’s lawyers to muddy the waters and escape relatively unscathed. This is a civil suit. The fine will probably not be on the dimension that would cause inconvenience to Goldman, so no, I am not counting on it to produce major change or accountability.

3:22 Truthdig

Thu, 22 Apr 2010 23:22:51 GMT

Comment:

We have time for a few more questions.

3:22 Truthdig

Thu, 22 Apr 2010 23:22:58 GMT

Comment:

...or comments.

3:23 Comment from Guinevere28

Thu, 22 Apr 2010 23:23:48 GMT

Comment: What do you think it would take to weed out the Goldman influence from the government?



3:25 Robert Scheer

Thu, 22 Apr 2010 23:25:54 GMT

Comment:

Well first of all, Obama should have enforced his own ban on lobbyists going into the government, which was violated when he appointed Mark Patterson. ... Think about it, he [Patterson] was lobbying in Washington to get the laws that already favored Goldman to be even kinder and now he is the chief of staff in the Treasury Department. Talk about a platinum revolving door between Goldman and the government. I think the only way to get these folks out is to shame them, call attention to their power and to demand that the president turn to people that don’t have dirty hands in the enterprise to help bail us out.

3:25 Comment from Terry Stamats

Thu, 22 Apr 2010 23:25:56 GMT

Comment: What would we be discussing if the market hadn’t adjusted yet? Suppose real estate values were still climbing, we wouldn’t even be talking about reform, would we? Think about it.



3:28 Robert Scheer

Thu, 22 Apr 2010 23:28:11 GMT

Comment:

That’s not true in my case because as a columnist and previously correspondent for the L.A. Times I wrote during the ’90s about the dangers inherent in this push for radical deregulation of the financial industry. I was not alone. Even William Safire, former Nixon speechwriter turned columnist for the N.Y. Times, wrote about the dangers of reversing Glass-Steagall and allowing development of these too-big-to-fail financial monstrosities. Certainly Brooksley Born testified 17 times about the danger of failing to regulate the rapidly spiraling derivative market. There were others expressing concerns, they just weren’t being listened to.

3:34 Truthdig

Thu, 22 Apr 2010 23:34:16 GMT

Comment:

Thanks, Bob. Thanks, everyone.

3:34 Robert Scheer

Thu, 22 Apr 2010 23:34:29 GMT

Comment:

I just want to say one last word.

3:37 Robert Scheer

Thu, 22 Apr 2010 23:37:47 GMT

Comment:

This issue is not going away, it will haunt us for decades to come. We still don’t know what’s in these toxic derivatives that our government is obligated to maintain because we spent trillions backing up the people that concocted them. We are by no means out of the housing mess. We still have high unemployment, but I can assure you that if we don’t get serious financial deregulation through Congress, and that means preventing the banks that we back up, that handle the money of ordinary depositors, of getting into these derivatives. That is in Blanche Lincoln’s [bill] that got through the Agricultural Committee. If we don’t separate the investors using their own money and the banks, we’re going to have a bigger crisis. At the very least we should repeal those horrible pieces of legislation Clinton signed off on, to the bipartisan cheers of the Congress and lobbyists they served, and reverse the Financial Services Modernization Act and the Commodity Futures Modernization Act.

3:37 Robert Scheer

Thu, 22 Apr 2010 23:37:57 GMT

Comment:

Thank you so much everyone for joining.

3:38 Robert Scheer

Thu, 22 Apr 2010 23:38:51 GMT

Comment:

Talk to you next week.