The Party's Alive and Well: Goldman and JP Morgan Living it Up

Before we start reveling in the fact that firms like Citigroup and AIG are going to see executive pay regulation from the Obama administration, the two firms conspicuously missing from the list of firms being watched are going to hand out near-record payouts to their executives a year after they themselves caused the financial mess that has led to rampant un- and underemployment, and a lowering in the average American's salary.

And before you say "Well, Goldman only got $10 billion in TARP funds and paid it back." What we seem to forget is that Goldman underwrote a lot of AIG debt, meaning if AIG defaults without government assistance, Goldman's $3 billion+ earnings this year turns into a multibillion dollar loss. Additionally, Goldman still has to buy back its warrants from the government, which it is shrewdly trying to do below market prices. Talk about appreciation for bailing them out.

Additionally, before we kid ourselves, Wall Street is back to its old ways, only this time it's not with people's mortgages; it's with their lives. They are packaging life insurance policies the same way they did with mortgages, and then hoping that the people they bought the policies from (the elderly and sick, to name two categories they are targeting) die quickly so they get a bigger return on the payout.

When I called Congressman Barney Frank's office and began asking questions about Mr. Frank's willingness to enter legislation to rein in firms that received TARP money but technically paid it back (again, the issue of warrants and AIG underwriting emerges here in terms of Goldman, at least), I was transferred to the House Finance Committee. The nice woman who picked up the phone explained to me that while the House has been working on shareholders' rights issues and corporate governance (where this executive pay cut seems to be stemming from), for firms like Goldman there is no recourse because of the TARP fund issue. When I asked if she knew if the Committee would be introducing legislation to rein in executive pay at firms like Goldman, she said she did not believe so. When I asked if it was even on their docket, she referred me back to the whole shareholder's rights issue and that they have done what they could. When I characterized it as a "Do what you can now, deal with others later"-type situation, she agreed. Going after a firm like Goldman would require a) a serious backbone (they have a lot of money, and C.R.E.A.M. is not just a Wu-Tang song) and b) hard work. Both seem to be in short supply right now in Washington.

I guess when you have Geithner's ear whenever you want it, you can get a lot done. So while most Americans toil and grind each day out at work for less than they used to get (granted they still have a job), the fat cats on Wall Street, who would have lost their McMansions had we, the taxpayer, not bailed them out of a problem that they created themselves, are living it up and will see massive profits and massive paychecks. I guess what's good for Wall Street is not necessarily good for Main Street.

Photo - Lloyd Blankfein, Goldman Sachs CEO (NY Mag)

Paterson and Goldman Sachs Blame Negative Public Opinion on Prejudice

Today Governor Paterson has all but guaranteed that he will not be the Democrat on the governor's ticket next year. In an interview with Daily News columnist Errol Louis, Paterson stated that the increasing calls for him to not participate in the next gubernatorial election are not because he's been an ineffective governor, not because his party was host to one of the most ridiculous legislative stunts in recent memory and he was powerless to stop it, not because shortly after taking office he admitted that he cheated on his wife and smoked pot and did blow. No no; it's because he's black.

The ludicrous comments come as the writing on the wall is becoming clearer to Paterson, who will likely face a very difficult primary next year against current New York Attorney General Andrew Cuomo (should he decide to run). First of all, Paterson was not elected by the people of New York as governor. His jump into governor's duties wasn't seamless, but it was not horrendous, either. Then Hillary Clinton got tapped to be Secretary of State under Obama and Paterson had to replace her. The debacle that ensured was nothing less than embarrassing, entangling (and eventually infuriating) the Kennedy clan and leaving the voters of New York scratching their heads. He acted like a spectator during the state senate stalemate. But these are not the reasons that state Democrats don't want him as governor again; according to Paterson, it's because he's black.

Now anyone who knows me or reads this blog knows that I am quick to point out incidents that I believe involve prejudice of any kind, especially racism. I just don't see it here. But Paterson is not the only high-powered, high-profile New Yorker crying foul. Upper-level executives at Goldman Sachs feel that they are being unfairly targeted in the media because their head and many senior execs are Jewish. Not because the taxpayers bailed them out (both directly, and then indirectly through AIG), not because they know they're playing with dirty money a la Jimmy Conway and should not be spending it lest people notice, not because Goldman has seemed anything but gracious to the taxpayer for our help, and not because Goldman is back to their risky ways; no no, it's because high level executives there are Jewish.

Are there people out there who hate Paterson because of his race? Sure. Same thing with executives at Goldman because of their religion? Yup. Is it the reason that the overall public dislikes them? Absolutely not. There are so many reasons to dislike Paterson and those who run Goldman Sachs, that their race and religion, respectively, is one of the last things on most peoples' minds. It just shows the hubris involved: "Oh, I'm so good and never make mistakes, they must not like me because of some immutable characteristic that I can't control." Give me a break. Crying racism and anti-Semitism like this adds doubts to those who are true victims of it, and that's wrong. Anyone paying attention can see through these ill-spewed smokescreens. Peace.

Photos - Governor David Paterson (NY.gov), Goldman Sachs CEO Lloyd Blankfein (The Daily Beast)