What is it about Goldman Sachs that makes so many people want to go rogue? There is the brilliant Nomi Prins, a former Managing Partner at Goldman, who called the firm an ‘autocratic and hypocritical organization’ in her groundbreaking 2004 book Other People’s Money: The Corporate Mugging of America. On March 14, 2012, Goldman Sachs VP Greg Smith tendered his resignation with a scorching oped in the New York Times, lamenting ‘how callously people talk about ripping their clients off,’ and noting that he had witnessed ‘five different managing directors refer to their own clients as ‘muppets.’ ‘
Carmen Segarra didn’t actually work for Goldman Sachs but she was frequently stationed there as its bank examiner from the New York Fed. Segarra should have received a national award in 2014 as the gutsiest bank examiner in America. To back up her position that Goldman Sachs was deficient on conflicts of interest and the New York Fed was looking the other way, Segarra headed over to the local Spy Store, bought a tiny microphone, and made 46 hours of secret recordings at Goldman and the New York Fed to show the cozy culture between the bank and its regulator. After Segarra handed those recordings to ProPublica and public radio’sThis American Life, the U. S. Senate hauled the President of the New York Fed, Bill Dudley, into a hearing for some answers. Dudley is still in his position at the New York Fed, Segarra says she was fired in retaliation for refusing to change her findings on Goldman Sachs.
Against that backdrop, along comes Neel Kashkari, a former Vice President of Goldman Sachs who became Assistant Secretary of the Treasury during the financial crisis and oversaw the Troubled Assets Relief Program (TARP). On January 1, Kashkari became President of the Federal Reserve Bank of Minneapolis and, while he is not directly calling out Goldman Sachs for shame, he is calling for the same outcome as Senator Bernie Sanders: breaking up the biggest banks that are still too-big-to-fail and would require another taxpayer bailout if they went under.
This post was published at Wall Street On Parade By Pam Martens and Russ Marte.
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