The Limits Of Hating Goldman Sachs

by Pejman Yousefzadeh on April 21, 2010


The SEC action against Goldman Sachs has been welcomed by a lot of people. In this country, most of them are Democrats who believe that the unpopularity of banks like Goldman will help in the push for financial service reform, and that beating up on banks will help Democrats appear as though they are the party of the people (not coincidentally, Democrats also want to make sure that in the process of looking like the party of the people, they manage to make Republicans look like the party of fatcats). Overseas, those who welcome the attack on banks believe that the renewed focus will allow them to tax bank profits in an effort to keep banks small.

But there is a limit in the United States to how much Goldman Sachs is hated. After all, plenty of people are willing to keep its money:

U.S. Senate candidate Alexi Giannoulias pushed his Republican opponent in Illinois to give back donations from Goldman Sachs Group Inc. without saying whether President Barack Obama should return almost $1 million that bank employees contributed to his White House bid.

Obama, a political mentor and basketball buddy to Giannoulias, received the money from employees and their family members, making Goldman Sachs second only to the University of California as his biggest single source for donors in 2007 and 2008, according to the Center for Responsive Politics.

Mark Kirk, the congressman competing against Giannoulias for the seat once held by Obama, ranks sixth for donations from Goldman employees, the center’s data shows. The top five are Democratic Congressman Michael McMahon of New York, Republican Senator Richard Shelby of Alabama, and three other New York Democrats: Senator Kirsten Gillibrand, Representative Scott Murphy and Senator Charles Schumer.

“This would be a lot more interesting if Wall Street banks, joined by Mark Kirk, weren’t fighting tooth and nail against the needed reforms the administration is advocating,” Hari Sevugan, Democratic National Committee spokesman, said in a statement.

The Securities and Exchange Commission’s fraud lawsuit against Goldman Sachs has politicians gauging the fallout from taking donations from the bank.

Sevugan didn’t respond to an e-mail query when asked whether Obama plans to return money from Goldman Sachs employees. Jen Psaki, a White House spokeswoman, deferred questions about contributions to the DNC.

[. . .]

Goldman Sachs and its employees and family members gave $5.9 million to candidates in the 2007-2008 election cycle, the Washington-based center’s data shows. Three-quarters of that went to Democrats, the non-partisan group said.

As this chart shows, Goldman Sachs was one of the President’s most important campaign contributors. And it should be noted that President Obama received seven times more money from Goldman Sachs than President George W. Bush received from Enron. Of course, he is not the only top Democrat to have received funding from Goldman:

After criticizing Republican leaders yesterday for having a secret, closed-door meeting with Wall Street executives, Senate Majority Leader Harry Reid today faced his own questions about a fundraiser he attended this year hosted by the president of Goldman Sachs.

Asked by reporters to confirm his attendance and how it played into the debate over financial regulatory reform, Reid didn’t answer the question directly. Instead, he read from what appeared to be prepared remarks, touting his reform efforts.

[. . .]

Asked later by NBC News to confirm the fundraiser, Reid spokesman Jim Manley readily did so — adding that everything was done in accordance with campaign finance rules. It raised $37,000, Manley said.

Of course, Democrats have no standing whatsoever in attacking Republicans for taking Goldman Sachs’s money, when they have been the largest beneficiaries of the bank’s generosity, and when individual Democrats refuse to return Goldman Sachs contributions, and refuse to forgo future contributions. It’s nice to see the media make this point–even if indirectly–and it’s nice to see that the media is focusing on the hypocrisy of those who bash the big banks, while taking (and keeping) their money when it comes time to raise funds for electoral campaigns. More like this please.

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