What makes the harsh words and congressional ridicule levied at Goldman Sachs so upsetting is the misplaced blame across the board. Listening to the congressional hearings, one would think that the financial giant single-handedly caused the economic collapse. Apparently, Goldman has d-bags working for them; this fuel poor investment; that led to our economic ruin; and now we need to strictly regulate financial markets.
I'm sorry to sound like an apologist for the financial institutions, but their actions were mere symptoms of a greater evil, not the problem itself. Sure malinvestment was to blame, and that malinvestment was fueled by the government.
By continually betraying free-market principles and wedding the actions of these giants of Wall Street with those of the federal government, an atmosphere of poor business practice was created and rewarded. When failed policies are rewarded through bailouts, grants, loans, and unrealistic interest rates, there is little incentive for responsible business practice. And, of course, our old friend the Federal Reserve was the chief actor in causing the the economic turmoil we now face. It kept interest rates at ridiculously low levels, fueled malinvestment, and encouraged poor behavior.
So what is the solution proposed by Congress in the financial reform package before the Senate? More bailouts, more government intervention, and more power to the FED. Such would be a grave mistake!
Michele Bachman comments:
Sen. Reid thinks he can paint Republicans as in the pocket of Wall Street, but that’s not going to cut it because it’s flat out wrong. This bill is seriously flawed and only perpetuates a “too big to fail” mentality through permanent bailouts of Wall Street, with or without the $50 billion reserve fund. Sen. Reid has painted himself into a corner, and I think he is drastically overestimating the American people's support for his approach to financial reform. There are better ways to go about it like those proposed by Republicans that will stop the Democrats’ permanent bailouts, protect taxpayers and create jobs, address Fannie Mae and Freddie Mac reform, and rein in the out-of-control Federal Reserve.Back to the Goldman Sachs hearings, it is obvious that the timing is a tool to stir up emotional support for the Democrat's reform package. People should be upset at the matter, but they should be upset across the board without letting emotion driving bad policy. Even President Clinton notes the timing of the Goldman Sachs suit is "suspect." He is right, and the approach of those behind this financial reform package is definitely suspect.
Once again we face misdiagnosis of the problem, a bad subscription, and another attempt for a Washington power grab by our "leadership."