Goldman Sachs’ Shadow : Personal Liberty Alerts

Goldman Sachs’ Shadow : Personal Liberty Alerts

Two other heavyweight members of Goldman’s European network have also figured large in the euro crisis: Otmar Issing, a former member of the Bundesbank board of directors and a one-time chief economist of the European Central Bank, and Ireland’s Peter Sutherland, an administrator for Goldman Sachs International, who played a behind the scenes role in the Irish bailout.

Marc Roche then goes on to explain that Goldman Sachs’ trading room benefitted from this “capital of relationships.” That may certainly have been the case, but we need to put this network of “friends” in the proper perspective. The other large financial institutions, and for that matter all major corporations, also have their “friends” in high places, plus their lobbyists who can influence the legislative process. In addition, judged by the performance of Goldman Sachs’ stock, the investment bank’s connections have lately been less useful. So, I am not a member of the Goldman Sachs detractor fraternity, as I know well that Goldman only did what all the other financial institutions have done, which is to use the dysfunctional political system and the money-printing central banks to their advantage. However, I will say that Goldman Sachs perfected the art and was therefore better at it.

The point I am driving at is that a reckless meritocracy creates an enormous economic and political mess. Yet, investors are looking at the very same people to solve the problems by implementing appropriate fiscal and monetary policies. But, if one looks carefully at the proposed measures (mostly money printing), it is apparent that they will merely postpone remedying the structural problems and not solve them. I have mentioned this because I see an increasing number of pundits who advocate money printing as the only solution to the problem of bank insolvencies.