"What beautifully cynical choreography," says Tunku Varadarajan at The Daily Beast. On the same day that the financial reform bill "sailed" over its final political hurdles, the news broke that "Goldman Sachs would settle its potentially castrating lawsuit with the SEC." Yes, Goldman is going to have to "cough up" $500 million, which is the heftiest penalty the SEC has ever imposed on a Wall Street firm — but the firm earned that much every four days in 2009. While the lawsuit was touted as a crackdown on "the rich and evil bankers who have impoverished" average Americans, the timing makes it clear that it really was just "a smokescreen to smooth the passage of the populist, and deeply flawed, Dodd-Frank bill." Here, an excerpt:
In the end, this was payoff from Goldman to the SEC for an abandonment of trial: Goldman has, effectively, bought its reputation back. Eventually, the administration may have calculated — given the ugly prospect of states' budget messes, not to mention possible carnage in Europe — that it needs to be friends with Goldman more than it needs Goldman to be a scapegoat. (In effect, how to have your scapegoat and eat it, too.) ...
It was worth it for both the SEC and Goldman to settle: It’s less than $1 per share of earnings for the latter, a lot less than people feared — and no heads roll at senior-management level, which is extraordinary in these circumstances. ... Everything is way too arcane, now, for most folks to understand. And that suits Wall Street and the politicians just fine, thank you.
Read the full article at The Daily Beast.
THE WEEK'S AUDIOPHILE PODCASTS: LISTEN SMARTER
- Obama just kneecapped Jeb Bush and Chris Christie's 2016 prospects
- 6 tiny scientific mistakes that created huge disasters
- It's official: The religious right is calling it quits
- 10 classic Sesame Street moments we wouldn't show today's kids
- 43 TV shows to watch in 2014
- What could happen if the Supreme Court rules against ObamaCare
- The dangerously childish morality of liberal ObamaCare supporters
- Girls on Film: The Hunger Games: Mockingjay isn't an action movie. It's a war movie.
- The myth of the stay-at-home dad
- The slippery slope of Twitter's attempts to stop harassment against women
Subscribe to the Week