y using creative accounting to hide its ballooning debt, Greece has dragged the entire European Union to the brink of financial meltdown -- with, it turns out, plenty of help from Goldman Sachs. The widely-reviled investment bank gave Greece the equivalent of an off-the-books second mortgage so the country could live above its means while keeping to the EU's strict debt limits. As recently as last November, Goldman president Gary Cohn was trying to sell the nation on even more budgetary shenanigans. Has the severely PR-challenged Goldman now aided one global crisis too many? (Watch a report about Goldman Sachs's role in the global financial crisis)
Let's hope Goldman finally gets what's coming: We now know that "a single rogue bank can bring down the world's financial system," says Simon Johnson in The Baseline Scenario. If this had occurred in the U.S., well-connected Goldman would walk away unscathed. But the European Union has every incentive not to look the other way, and Goldman knows it.
"Goldman goes rogue—special European audit to follow"
It's not Goldman's, or Greece's, fault: If the EU "policy elites" want to find a villain here, they should look in the mirror, says Paul Krugman in The New York Times. Yes, Greece was "fiscally irresponsible," and hid that through Goldman-enabled "creative accounting." But the real problem is that the European elites pushed countries like Greece, Spain, and Portugal into adopting the euro before they were ready.
"The making of a euromess"
Do Goldman executives look good in prison jumpsuits? No one made Greece borrow secret billions just after adopting the euro, says Gilbert Mercier in News Junkie Post. And nobody made Goldman "bankrupt [that] country" with its "global elaborate Ponzi scheme." Wall Street's "golden boys" will need their "fat bonuses" when the international prosecutions start.
"Is it time for a crack down on Goldman Sachs?"
People are overreacting all around: The Greek crisis has rattled global markets, says Natsuko Waki in Reuters. But "a stand-back analysis" shows that it's actually neither as "catastrophic" nor contagious as the last global crisis, the U.S. subprime meltdown. The Greek tragedy, after all, only includes tens of billions of dollars, while the subprime saga tallied $3 trillion.
"Greek crisis: Not as tragic as subprime"
THE WEEK'S AUDIOPHILE PODCASTS: LISTEN SMARTER
- 31 TV shows to watch in 2014
- He said he was leaving. She ignored him.
- 14 wonderful words with no English equivalent
- Why atheism doesn't have the upper hand over religion
- Why Easter is so important to Christians
- What would a U.S.-Russia war look like?
- Wounded in Boston, two brothers endure
- Why would a young person today be religious?
- If a nuclear bomb exploded in downtown Washington, what should you do?
- What The Americans gets wrong about Russian spies
Subscribe to the Week