It's really unbelievable. The way that Goldman Sachs keeps sticking its foot in it is simply unbelievable. Let's not review their gross profits and bonuses, or their many failed public relations schemes to gloss over unseemly profits, a practice we have dubbed "greedwashing". Let's simply recap this week's news.
On Sunday, the New York Times detailed in a front-page expose' how Goldman may have hastened the demise of AIG, and perhaps the global economy, by betting that the housing market would collapse and jacking up its insurance for mortgage securities with AIG to extract more and more money from the firm as the housing market went south.
On Tuesday, we reported that the respected German magazine Der Spiegel revealed that Goldman did a billion dollar deal with Greece in 2002, which helped that nation hide its staggering debt for years. Now Greece is teetering on the brink of default, a scenario that could lead to another global meltdown, and Goldman's role is coming under scrutiny. (Unlike the rest of the world, Goldman is probably hedged against a Greek collapse.)
Now the trenchant traders at Goldman have picked a new target. Not satisfied with bringing the global economy to the brink, they now appear to be devoting time and energy to mini, cyber attacks on bank reform campaigners.
Little Lloyd Goes After Robin Hood
On Wednesday, British activists launched a major campaign to push Gordon Brown's government into adopting a "Robin Hood Tax" on financial transactions. "By taking an average of 0.05% from speculative banking transactions, hundreds of billions of pounds would be raised every year," their website claims.
The campaigners unveiled an amazing ad featuring British actor Bill Nighy (Love Actually, Valkyrie, Pirates of the Caribbean) as a deliciously smarmy banker. Nighy also took to the airwaves on the BBC's biggest morning shows arguing that a tiny transaction tax would be "small change for the bankers, but big change for the world."
The Robin Hood Tax campaign website is loaded with lots of clever downloads and posters and attracted visitors by asking them to vote for or against the transaction tax. On the first day of the campaign launch, the tech-heads running the site noticed that they were being spammed with 4,600 "no" votes in a short period of time. They posted a message on the site saying "naughty naughty," and letting the spammer know that he was being "watched from the trees." Within 24 hours they say they traced the spamming to two computers, one allegedly registered to Goldman Sachs.
It’s Not Just A Fairy Tale
Goldman has reason to be worried. On Thursday, the Financial Times front page proclaimed that a global deal on a financial transaction tax was in the offing, and could be agreed on by the G-20 countries at their next meeting in June.
Goldman has a lot to lose if such a tax becomes a reality. Goldman's computers may buy or sell shares as many as 1,000 times a second. It is these high-volume, high-speed trades that would take the biggest hit. Average investors, who hold stock for the long term, would hardly notice. A tax of 0.20 percent, as has been proposed in the U.S. Congress, could raise $100 billion per year. That is real money, money that could be used to put Americans back to work, rebuild our ravaged economy and meet other critical needs.
By today, the Robin Hood Tax "yes" vote had a substantial lead on the "no" camp, with 28,017 votes compared with 3,300. Let's hope the vote keeps on mounting and the campaign spreads around the globe. There is nothing that would put the brakes on the reckless casino-style gambling on Wall Street more than this tiny tax on financial transactions.