The Banksters of Goldman Sachs: "Heads We Win, Tails You Lose."

Goldman Sachs, like a lot of other banksters, switched to compensating its partners[1] with stock. The idea was that by giving them stock, the partners shared in the risk. But Goldman Sachs allows its partners to hedge the stock. Which means that if shares of the stock, go up, the partners rake in the loot. If the shares go down, someone else gets hosed.

This is akin to the half-socialism that we see with the big banksters: When they make money, they keep it; but when they lose money in massive amounts, we (through the Treasury) cover their losses. Part of that is because, more than most banksters, Goldman Sachs has riddled the SEC and the Treasury with moles and/or double agents.[2] The other banksters, like Bank of America, Citibank and Morgan Stanley, have fewer double agents in the executive branch, so they do it the old-fashioned way, by funneling huge amounts of bribes campaign contributions to congressmen.

By know, regular readers should know who I primarily hold to blame for this state of affairs: Former Senator Phil "a Nation of Whiners" Gramm (R-UBS), who ramrodded the final gutting of the Glass-Steagell Act and Alan Greenspan, who had regulatory power to reign in the mortgage market, but refused to do so. The first man, I posit, likely acted out of self-interest,[3] the second man because of ideology.[4]

Right now, the banksters are like a nasty combination of gluttons with matches inside a powder magazine and we are trapped inside the building with them: If the banksters aren't allowed to keep fattening themselves (and we have to continue to feed them), they will gleefully start throwing matches into open barrels of gunpowder and blow the place to smithereens. I submit that things are going to have to get much worse in this country before we have a national government that has the guts to do what has to be done in order to stop the banksters from wrecking the place for the fourth time in a century. But that is a rant for another time.
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[1] Or "co-conspirators."
[2] The formal term is "Goldman Sachs alumnae."
[3] That's the economists' preferred term for "greed."
[4] Greenspan was an acolyte of the Church of Ayn Rand.