When the dust settles, the chain of command at Goldman Sachs — from CEO Lloyd Blankfein, to junior executive Fab Tourre — who calls himself the "fabulous Fab" — face no jail time. A battalion of defense lawyers will see to that, and the Securities and Exchange Commission can only go so far, having been asleep at the wheel for years.
But even unsettled dust can obscure only so much. From what we now know, the package of subprime mortgages sold under Tourre’s direction was assembled in part by John Paulson, a Goldman client and hedge fund manager who bet that those mortgages would default. Tourre’s apparent assurance to buyers of these debt obligations, including a couple of European governments — that Paulson himself had bought into the package was not the truth. Paulson was All In for the collapse.
But it wasn’t just Goldman and it’s not just water under the bridge. As the Senate debates financial reform, millions of underpaid Americans have lost their homes, their nest eggs, and many of them, their incomes. Their legitimate desire to own a home and have some equity was twisted and turned against them, especially if they lived in minority communities.
The subprime rip-off is resulting in the largest transfer of wealth out of minority America ever, estimated now at close to $1 trillion. Taking that much money from an already underpaid sector of the population is a national disgrace. What is being debated by Congress, and proposed by the President, will not fix that.
The F Word is a regular commentary by Laura Flanders, the host of GRITtv which broadcasts weekdays on satellite TV (Dish Network Ch. 9415 Free Speech TV) on cable, and online at GRITtv.org and TheNation.com. Support us by signing up for our podcast, and follow GRITtv or GRITlaura on Twitter.com.
