Goldman Sachs is claiming that an SEC suit and Senate questioning of the way it pushed risky assets on its clients without revealing their riskiness is unfair. And, of course, there is strategy to beat the rap, according to Slate.com:
“Long, thoughtful pauses followed by rambling non-responsive answers can easily devour half of a member's allotted questioning time.”
— K. Lee Blalack II, lawyer hired by Goldman Sachs to prep execs for Congressional hearings, explaining strategy in a 2009 article
Yeah, that's right. Stall. It is a time-honored tradition after all. And, of course, Goldman wasn't doing anything illegal. And the fat cats can even argue that there was nothing ethically wrong with encouraging clients to buy something that they wanted to fail in the first place — as evidenced by the shorting they were doing of all these “great” assets they were foisting off on unwitting clients. These guys are brokers and salespeople, not advisers with a fiduciary duty toward their clients.
I think just listening Goldman Sachs, and other Wall Street types, defend themselves provides its own argument as to why a laissez-faire market, with almost no regulation, would be a bad idea. While it's nice to say that “market forces” should be the ultimate arbiter, it's clear that there would be no operation on a playing field that even remotely resembles something that those of us on the demand side could do in order to control the supply side. Those on the supply side would be too busy running rings around everything and manipulating those market forces that we, for some reason, assume to be above all such manipulation. Unfortunately, “market forces” aren't the be all and end all. They are, in fact, corruptible and controllable by anyone who has enough time, money and/or power.
Our strange focus of national priorities on the idea that regulation-free, unrestrained capitalism will result in honest companies, companies not trying to pull one over on us with lies and obfuscation, baffles me. These guys have shown us time and again that the “free market” is anything but, and if we just give them free rein, they will get all they can and leave the rest of us and our financial system in shambles. Without even feeling a little bad about it.
We do need more transparency, especially if more of us common folk are going to continue to be affected by the types of investing that happens on Wall Street. If people like those at Goldman Sachs are going to be able to manipulate market forces, then We the People, via the government, should be able to influence them as well through reasonable and moderate regulation that enforces transparency.
Also, thanks to Sean at Growing Money for bringing this video to my attention.