Why Nothing Will Come of Bashing Goldman

From the WSJ to the Financial Times, ragging on supercapitalists has become de rigeur. It also might be futile.

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Even after a grab-bag of defenses and a vigorous full-court-press PR campaign, the scales of commentary continue to tip against Goldman Sachs. As the Financial Times reports today (from a poll of 17,000 Americans), the reputation of Wall Streets' cavaliers has sunk dramatically in the eyes of the public.

Given that everyone from the Wall Street Journal to Bloomberg to hardcore business insiders have turned against Goldman, this mainstreaming is hardly surprising. What's surprising is that even the critics doubt much will come of it.

Here's why pundits believe that the consensus of criticism against Goldman won't be enshrined in policy:

  • Goldman Bankers Only Have to Please Their Clients says Greg Farrell in the Financial Times. "All of this giant squid language they can pretty much brush off. ... My guess is that their customers are probably very happy with them."
  • They Still Have White House Allies says Brian Montopoli at CBS. "It remains to be seen what effect all this will really have; the Obama administration is still brimming with ex-Goldman staffers and allies of the company."
  • Lobbyists Are Already Working, says Roger Ehrenberg at Information Arbitrage. "Banks now lobbying with US taxpayer dollars against changes that could protect the US taxpayer from more harm in the future."
  • The Fed Might Be Secretly Helping Them  says Yves Smith.  "The Fed is apparently taking crappy prices on its big programs. The question is whether the poor terms are by design (as in another subsidy) or ineptitude?"
  • We're Too Distracted By Conspiracy Theories, says Charlie Gasparino at the Daily Beast. "A bigger issue...is that the American taxpayer is right this very moment subsidizing Goldman's risk taking. That's a scandal no one seems to want to talk about."

Can a massive outpouring of opinion nudge President Obama toward regulation? Perhaps, but the president said to PBS that without debt to hold over Goldman, he can't put them on a leash:

"Now, there are some companies, like Goldman Sachs, that have paid the money back and that means that we don't have the same kind of levers on them that we might have"
This article is from the archive of our partner The Wire.