Goldman Sachs on mortgage crisis: 'Serious money' to be made
New revelations in e-mails at Goldman Sachs show managers discussing profits to be made from the mortgage crisis. This comes just as Congress is to take up Wall Street reform legislation.
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As Obama acknowledges, “We still have a ways to go.” And there are questions about the way in which GM has paid back Uncle Sam, raised by Republican Sen. Chuck Grassley this week in a letter to Treasury Secretary Tim Geithner.Skip to next paragraph
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But for Obama, the segue from Detroit to Wall Street is clear: “Part of what led to the crisis in our auto industry – and one of the main causes of the economic downturn – were problems in our financial sector. In the absence of common-sense rules, Wall Street firms took enormous, irresponsible risks that imperiled our financial system – and hurt just about every sector of our economy.”
In Congress, debate on financial reform could begin as soon as Monday.
While Republicans acknowledge the need for reform, they’re resisting Democratic efforts to push ahead on a bill authored by Senate Banking Committee Chairman Christopher Dodd. That bill includes a new consumer protection agency, a regulatory council to monitor risk in the financial system, and a fund paid for by the financial industry that would be used to liquidate failed financial firms.
The first maneuver is likely to be a cloture vote to halt a possible GOP filibuster.
“This is a good political move for Democrats,” Larry Sabato, a political scientist at the University of Virginia, Charlottesville, told the Monitor’s Linda Feldmann. “It’s populist, it’s anti-Wall Street, it helps to compensate for the fact that voters have tagged them, however unfairly, with the bailout.”
Nobody wants to be seen as “bailing out” big banks and other financial institutions.
“Republicans are working to ensure the bill would forbid any future bailouts of Wall Street banks,” Texas Sen. Kay Bailey Hutchison said in the Republican weekly radio and internet address Saturday. “The idea that a financial institution is ‘Too Big To Fail’ perverts free market capitalism. It suggests that large firms can privatize their profits, yet socialize their risks.”