The Interrogation of Lloyd Blankfein
By MIKE WHITNEY
Tuesday's hearings of the Permanent Subcommittee on Investigations laid the groundwork for future criminal prosecutions of Goldman Sachs Chief Executive Lloyd Blankfein and his chief lieutenants whose reckless and self-serving actions helped to precipitate the financial crisis. Committee chairman Senator Carl Levin (a former prosecutor) adroitly managed the proceedings in a way that narrowed their scope and focused on four main areas of concern.
http://www.counterpunch.org/whitney04282010.html
I would not call Levin adroit. I would call him a sludge hammer. The main problem with Levin and other committee members, is they did not do a nuanced job of going after these guys. You have to ensnare each of them in self-contradiction that has two conclusions. First, they are lying. Second, usually the truth is more simple than a lie. Here's the great virtue of the truth in a cross-examination. If you are telling the truth, and you are careful with short answers, you almost can't go wrong and contradict yourself. This makes it very difficult to dissemble what you say. If you are lying, then you almost always have a long complicated story to tell. This is key, because a lie can almost always lead to a contradiction. It is almost a material fact that the longer the story, the greater likelihood a contradiction will occur. It is almost the key characteristic of a lie.
The art of dissembling a lie seems to start with a simple question. Does this `explanation' make sense? The essence of capitalism is a business swindle. The swindle is this. I charge you more than this product is worth. The only way that kind of transaction swindle can exist is if there is no other alternative. Thus a monopoly is required.
``Big business can maintain selling prices at high levels while still competing to cut costs, advertise and market their products. The economic surpluses which result cannot be absorbed through consumers spending more. The concentration of the surplus in the hands of the business elite must therefore be geared towards imperialistic and militaristic government tendencies, which is the easiest and surest way to utilise surplus productive capacity.
Exploitation focuses on low wage workers and groups at home, especially minorities. Average earners see the pressures in drive for production destroy their human relationships, leading to wider alienation and hostility. The whole system is largely irrational, since though individuals may make rational decisions, the ultimate systemic goals are not. The system continues to function so long as Keynesian full employment policies are pursued, but there is the continued threat to stability from less-developed countries, throwing off the restraints of neo-colonial domination.''
http://en.wikipedia.org/wiki/Monopoly_Capital
In a nutshell, this is why the entire spectrum of public services are always under attack. These services offer products that are worth themselves and usually more than their cost of production.
I agree with Doug, it seems unlikely anything will come of this Goldman grilling.
I think the main reasons for doing nothing are key players in this mass fraud like Ruben, Paulson, Geithner, Bernanke, Summers, et al designed the system for these frauds, aided and abetted actively or passively, and are now in cover up mode. As far as I can tell the entire financial sector is corrupt, even by its own non-standards of bad faith and wrong conduct.
I am keep wondering why doesn't this gang see that they are destroying an economic system and millions of people's lives? That's an honest question. So I think the honest answer is, they don't care.
Here is a funny explanation:
``So how do the shadow banks make so much money by increasing leverage?
Here's how it works: There are three houses on the block; all of them are identical and all of them are the same price, $100,000 each.
Harry buys the first house and pays cash, $100,000 on the barrelhead.
Joe buys the second house and puts 10 per cent down, in other words, he pays $10,000.
Frank, who works for a big chiseling hedge fund on Wall Street, buys the third home and puts 0.0 per cent down; so he has zero equity.
12 months later the value of all three homes has gone up 10 per cent; so now they are all worth $110,000. That means:
Harry has made a measly 10 per cent on his investment.
Joe has made 100 per cent on his investment.
And chiseling Frank has made $10,000 pure profit.
This simple breakdown is intended to help people grasp the real purpose behind securitization and derivatives trading, which is not to make markets operate more efficiently or to "disaggregate" (spread) risk (as the proponents of "innovation" say). It is simply to peddle garbage assets which are balanced on minuscule slices of capital. It's a shyster's dream-come-true; capitalism without capital.''
http://www.counterpunch.org/whitney04272010.html
Below is a short piece on Black:
http://www.counterpunch.org/whitney04232010.html
I think I am getting obsessional ...