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The Secret Goldman Sachs Tapes

Posted by Soulskill on from the everything-you-suspected dept.

An anonymous reader writes: The radio program "This American Life" has published an extraordinary investigative report on how the U.S. government regulators in charge of keeping an eye on the banks actually interact with powerful financial institutions (podcast here). Financial journalist Michael Lewis describes the report thus: "The Fed failed to regulate the banks because it did not encourage its employees to ask questions, to speak their minds or to point out problems. Just the opposite: The Fed encourages its employees to keep their heads down, to obey their managers and to appease the banks. That is, bank regulators failed to do their jobs properly not because they lacked the tools but because they were discouraged from using them. The report quotes Fed employees saying things like, 'until I know what my boss thinks I don't want to tell you,' and 'no one feels individually accountable for financial crisis mistakes because management is through consensus.'"

15 of 201 comments (clear)

  1. is anyone really surprised here by ganjadude · · Score: 5, Insightful

    most people here anyone have known for a long time that the banks and government have a symbiotic relationship. I guess its nice to see some proof for once. I cant say I am shocked in the least however.

    --
    have you seen my sig? there are many others like it but none that are the same
    1. Re:is anyone really surprised here by Charliemopps · · Score: 5, Insightful

      most people here anyone have known for a long time that the banks and government have a symbiotic relationship. I guess its nice to see some proof for once. I cant say I am shocked in the least however.

      So why is it, that when presented with evidence of some horrible thing, people tend to use it as a tool to act arrogant? "I always knew that was going on. You're a fool if you didn't."

      You didn't know, you suspected. We all did. This is evidence. Get mad. Apathy is your enemy.

    2. Re:is anyone really surprised here by drsmithy · · Score: 3, Insightful

      The financial collapse was a result of mistakes, not crimes.

      They may not have been crimes, but do not try and say the financial collapse was a result of "mistakes".

    3. Re:is anyone really surprised here by Beeftopia · · Score: 3, Insightful

      Banning revolving door employment deals isn't a good solution either. The government already has enough trouble attracting good people. If you want people that know how the system works, you need to hire people that have worked in the system. After their stint in government is over, those people expect to continue in their profession.

      This is a common misconception. The financial system is mathematical but nowhere near rocket science. The majors of Wall Street executives clearly indicate this (I knew a fellow who became a senior executive at GS. A hypercompetitive jock with average intelligence).

      Another case in point: Hank Paulson, former Goldman Sachs CEO, and former Treasury Secretary who crafted the bailouts. His undergraduate major? English.

      End the revolving door. And firewall regulators from politicians.

    4. Re:is anyone really surprised here by Anonymous Coward · · Score: 2, Insightful

      those people expect to continue in their profession.

      You know what I was told, when my job ended and I said the same?

      "Too bad. Not my problem."

      Why does that apply to me, one of 30 people able to do my job, but not to somebody wealthy?

    5. Re:is anyone really surprised here by Kazoo+the+Clown · · Score: 3, Insightful

      We don't arrest people for making bad investments.

      What the Fed does is bail them out, instead. Now that, I would argue, is what was criminal in this case, because it transferred liabilities from the investors to the taxpayers...

  2. The Banks Own the Government. by Anonymous Coward · · Score: 3, Insightful

    Our government clearly lacks the balls to regulate the banks and provide leadership. This is just sad.

  3. Too big by jhol13 · · Score: 4, Insightful

    Isn't it nice ... if you destroy one persons life, you get penalty big enougf to ruin your life - if you ruin 100'000 you get a "golden parachute".
    Number of prosecuted persons (from last bank breakdown - and one before that - and next) is just appalling.

  4. Top-down management by Anonymous Coward · · Score: 3, Insightful

    > The report quotes Fed employees saying things like, 'until I know what my boss thinks I don't want to tell you,'

    No shit, its called top-down management. The minions don't do, say or think anything until instructed by their boss (or their boss's boss, or their boss's boss's boss)

    Did anyone seriously expect anything else out of a system which STILL (probably will NEVER) hasn't nailed anyone to the wall for the financial crash?

  5. Working On My Pandering Campaign Platform by Greyfox · · Score: 3, Insightful

    I'm going over the headlines today working on my pandering campaign platform. So far as president I promise to fire the entire forest service, prosecute the phoebus cartel to the fullest extent of the law and demand that my banking regulators not only do their jobs properly but to antagonize the bankers as much as possible (Up to and including stabbing them in the face if they feel it's required.) I predict this will be fairly popular on the internet but end up receiving no campaign contributions. How's that working so far?

    --

    I'm trying to teach myself to set people on fire with my mind... Is it hot in here?

    1. Re:Working On My Pandering Campaign Platform by jd.schmidt · · Score: 3, Insightful

      But watch which of these "problems" get fixed. On the photo issue I assure you the elected officials will be "outraged" at the "overreach" of "imperious" public officials. But on the bank issue, it will be "very complicated" and need "more study".

  6. Re:Goldman Sachs All Throughout the Obama Admin by Herkum01 · · Score: 4, Insightful

    Warren Buffet, a government employee and/or consultant? Please

    Warren Buffet has probably one of the few people who has always gotten the best of Goldman Sach's because whenever they really fuck things over, he squeezed them for top of the line deals. Pretty much what Goldman Sach's did to anyone else given half the chance.

  7. Re:summary by Livius · · Score: 3, Insightful

    You can't get any more factual than that.

    And the best entertainment writers can't come up with material half as funny and/or tragic.

  8. The wrong people are scared by Morpeth · · Score: 4, Insightful

    Listened to segment on NPR this morning, what I got out of it was the Fed is afraid of the big investment banks, when it should be the other way around. I was honestly a bit shocked by how timid and afraid the Fed people were, it was embarrassing.

    --

    'The unexamined life is not worth living' - Socrates
  9. Correction: by Anonymous Coward · · Score: 3, Insightful

    When you wrote: "...the banks and government have a symbiotic relationship... you seem to have missed the fact that neither side in this story was "the government"

    The Federal Reserve Bank is NOT a part of the Federal Government; it is a bank that is run by the banks. This highly market-manipulating entity which would otherwise run contary to all the antitrust laws that Teddy Roosevelt gave us only LOOKS to the public to be part of the government because of [1] its name, [2] the bank allows the US President to nominate its chairperson, and [3] the Federal government allows its "notes" (those dollars in your wallet) to be used as the currency of the land. (THESE entanglements DO involve government, but that's not what is in the article). The artical involves a bank (Goldman Sachs) getting easy treatment by the (non-government) "Fed" (the privately-owned and hyper-secretive economy-manipulating Federal Reserve Bank, which is owned by the banks)