Fraudulent by Nature?

By most accounts, Goldman Sachs was among the worst actors in the meltdown of the financial system in 2007. First, it blindly took profits from collections of bad bonds when it should have known that those bonds would result in a huge collapse. Then, when it finally began to pay attention, it bought instruments that would take profit from its own bad advice. In other words, it sold -- and even pushed -- products to people that it was betting against. (For a full and clear explanation of all this, I recommend The Big Short by Michael Lewis.)

Now, at least, the big Wall Street firm is facing some accountability, in the form of an SEC lawsuit. New York attorney general Eric Schneiderman is also considering prosecution for fraud. But the SEC has let the big guys off the hook by focusing on just one man, Fabrice Tourre, as if he were solely responsible for the sale of these fraudulent securities.

Not only that, but the SEC is also investigating fraud committed by a Chinese firm called Longtop Financial Technologies. One of the firms involved in that fraud was … Goldman Sachs, which helped the Chinese company go public in the United States. New York Times reporter Floyd Norris writes that "what is stunning about Longtop and some other recent disasters is the list of smart people who were fooled. "

It seems to me that Norris is being entirely too generous. At what point do we accept that the people at Goldman Sachs are either not smart or not honest. The pattern points to the latter. People who work for Goldman Sachs have to k now that the firm for which they work has a history of criminally negligent or outright fraudulent behavior. They continue to work there because they want more money. In other words, they are greedy. Let's call it what it is. Goldman Sachs is a criminal enterprise, fraudulent at its core.