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Goldman Sachs’ (GS) board considered buying AIG in late June, 2008, so GS could use AIG’s premium float for capital (rather than becoming a bank holding company and using deposits to fund trades or as collatoral for leveraged trading).  Strangely, GS’s board didn’t realize that another part of GS was questioning the “mark to market” valuations that AIG was making on its swaps.  Also, AIG had revised its Nov and Dec 07 losses from $1b to $5b.  GS and AIG had the same public accountant (Price), which GS was using to get AIG to down-value the value of its assets. On that week in Sept, 2008, when Lehman went under, JP Morgan and GS were working to put together a loan of $50 billion to cover AIG’s deepening hole  At the same time, the two banks were demanding new collateral payments from AIG, pushing the insurance giant deeper into its hole.  The Fed and AIG wondered if the fees and interest rate being set by the two banks for themselves and other contributing banks wasn’t essentially stealing the company.

As it turned out, AIG received funding from the Federal Reserve in exchange for the government taking warrants on a 79.9% ownership of the company.  Goldman had bought $20 billion of insurance from AIG and received as much as $13 billion from AIG when the Fed funded AIG with $90 billion.  The counterparties were paid in full, rather than the sixty cents on the dollar that AIG negotiators had been pressing. Even though GS was hedged because it had purchased credit default swaps in case AIG were to default, one has to ask whether Blankfein at GS used Paulson to have the government pay GS through AIG.  Blankfein claims that his bank would not have gone under had AIG imploded, but surely GS relies on there being a financial market. Also, when the Fed essentially took over AIG, Paulson wanted to appoint a new CEO.  Paulson was of course an ex-CEO of GS.  Paulson had one of his advisors, also a GS alum, look at candidates.  The aid favored Ed Liddy, who was on GS’s board.   GS would be running AIG.  Hence, the insurance giant would not run interferance on the $13 billion going to GS.

Besides these conflicts of interest, Goldman trades securities for big firms and pension funds. It also acts as adviser to many of the companies whose securities it trades.   In other words, the problem is in its core business. So a person could be excused for wincing at Lloyd Blankfein’s statement that his bank is performing not only a social function in providing capital to firms so they can expand, but is “doing God’s work” as well.   John D. Rockefeller used the same expression in regard to his Standard Oil monopoly that offered its remaining competitors the choice to be bought up or drowned.  According to Rockefeller, Standard Oil was Noah’s Ark, saving the oil refining industry from destructive competition.   So what if the uncooperative were put under?  They deserved it. Besides, the industry would be saved.  In this regard, the monopolist viewed himself as a Christ figure.   Are the golden boys the incarnation of this figure?   It goes without saying, but I will anyway, that Blankfein has no misgivings in paying (and being paid) record bonuses in 2009.    The presumptuousness of those bankers aside, Jefferson’s dictum that a national bank would be more dangerous than a standing army to democracy seems apt.  We, the American citizens, have an amazing ability not to see things, and then to tacitly enable that which is in actuality hardly a savior.

Source: http://www.timesonline.co.uk/tol/news/world/us_and_americas/article6907681.ece?token=null&offset=0&page=1

On January 10, 2011, former U.S. House Majority Leader Tom Delay (R-TX) was sentenced to three years in prison on charges of money laundering and conspiracy to commit money laundering for using a political action committee to illegally send corporate donations to Texas House candidates in 2002. Prosecutors claim the money helped Republicans take control of the Texas House. That enabled the Republican majority to push through a Delay-engineered congressional redistricting plan that sent more Texas Republicans to Congress in 2004, strengthening DeLay's political power. In the face of this charge, DeLay simply repeated his longstanding claim that he did nothing wrong. "I can't be remorseful for something I don't think I did," DeLay said in a 10-minute speech to the judge. This statement is not unlike those of John D. Rockefeller, when the monopolist of Standard Oil was accused in the late nineteenth century of restraint of trade.  Ida Tarbell, Rockefeller's chief critic, believed the titan was under a sort of self-delusion. It is possible that Delay suffered from a similar rationalization or state of denial denial. Just as Rockefeller, who attended Church more than once a week through his 90s insisted that things are right between him and his God, Delay pointed to his faith in Jesus as in effect rendering the verdict nugatory in terms of what really matters. To be sure, Delay probably did view himself as innocent of criminal conduct. "This criminalization of politics is very dangerous" he charged, "It's dangerous to our system. Just because somebody disagrees with you they got to put you in jail, bankrupt you, destroy your family."  Antithetically, Gary Cobb, the lead prosecutor, averred that Delay had "put his principles, ideals and beliefs above the laws of Texas." Particularly when one's religious beliefs are invoked along with a criminal defense (i.e., that it was politics that was being criminalized), one should be on guard against the possibility of self-delusion.  Both Rockefeller and Delay had immense power, and their respective views of the non-culpability bore on their use of power. The ends justifying the means allows for a slippery slope. Of course, in Delay's case one could simply look at the money exchanges and compare them to the law. According to The New York Times, "a jury determined that he conspired with two associates to use his Texas-based political action committee to send $190,000 in corporate money to an arm of the Washington-based Republican National Committee. The RNC then sent the same amount to seven Texas House candidates. Under Texas law, corporate money can't go directly to political campaigns." Yet as clear as this sounds, it is surprising how divergent Delay and Cobb are with respect to their interpretations. If we take the verdict as correct, and rather cut and dry, it might be troubling that Delay not only denied any culpability after the verdict, but went on to invoke his salubrious condition in terms of his religious faith. Such an invocation can easily turn into a justification, with the result being that great wrongs, such as wars, can be done in the name of a religion of love. Does religion itself support or enable its role in hypocrisy, or are there tools such that Rockefeller's pastor could have stood up to him as though a mirror to reflect the pride and duplicity or delusion back upon the titan who even as a teenager dreamed of money?

Source:  http://www.msnbc.msn.com/id/41006570/ns/politics-more_politics/ 

For more on the intersection of Rockefeller's commercial and religious roles and what this may imply regarding the Reformation and Christianity itself with respect to profit-seeking and wealth, please see Godliness and Greed, available at: http://www.amazon.com/Godliness-Greed-Shifting-Christian-Thought/dp/0739139835/ref=sr_1_1?ie=UTF8&s=books&qid=1294957599&sr=8-1