Tuesday, October 7, 2008

Goldman Sachs, US Treasury--What's the Dif?

Posted By on Tue, Oct 7, 2008 at 11:25 AM

click to enlarge kashkari.jpg
Villain from a Steven Seagal movie or bailout czar? The U.S. Treasury should hereafter be referred to as the Goldman Sachs Alumni Association. It's well-known that Treasury Secretary Henry Paulson was the head of Goldman Sachs before joining the Bush administration in 2006. Now Neel Kashkari, former Goldman Sachs exec and Paulson's assistant secretary for international affairs, has been named the bailout czar. We’ve got a regular Goldman Sachs Old Boys Club at the U.S. Treasury Department. And, boy, are they watching the hen house. Sure, we need men of their experience, but stock short-selling enablers like Goldman Sachs? Come on. Take Paulson for example. According to Bloomberg columnist Michael Lewis, leaving GS and becoming the TS was the best financial move he ever made:
“Not only was he required to sell his half-billion dollars in Goldman stock near the high, but also, as Treasury Secretary, he was exempt from capital-gains taxes. By getting out of Goldman while the getting was good, the guy may have doubled his net worth.”
Civic duty or smart investment? Aside from the conflict of interest, Kashkari’s 35-years-old and in charge of a nearly trillion dollar bailout? Whew. Also, he apparently was Paulson’s key adviser on housing. Must have been sound advice. Does this mean investment bankers can sleep safely knowing their multi-million dollar bonuses are in good hands?

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