Sunday, November 2, 2008

The American Firm

The American Firm

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Oligarchy: a political regime in which sovereignty belongs to a small group of people, a restricted and privileged class. The word became fashionable again to define the Cossack capitalism that has plundered Russia for the last several years. But, in the end, weren't Vladimir Putin's friends directly inspired by the American model?

The investigation of Goldman Sachs that we publish today invites a person to think so. It illuminates, in fact, the very close - practically incestuous - relationships (pages 18 to 19) that unite the most powerful bank in the world with the political authority of the premier global power.

Thus, the secretary of the treasury is none other than former Goldman Sachs's boss, Henry Paulson. His principle collaborators for the most part also come from "GS," starting with Neel Kashkari, in charge of the gigantic rescue plan for banks established a month ago to stem the financial crisis. And the list is long, from the president of the board of directors of America's central bank, the Federal Reserve, to that of the World Bank.

Certainly, these consanguineous relationships between Wall Street and Washington, between the bank and government circles, are as old as American capitalism. Certainly also, if Goldman Sachs alumni are often chosen to occupy key positions, it's just, they plead, because they're the best, soldier-monks of finance yesterday, of public service today.

Nonetheless, in the United States itself, and not only among envious competitors, this omnipresence of "GS" alumni arouses concern. For good reason. How else can one explain that this bank - at the heart of recent years' crazed speculation - should so easily make out O.K. in the present turmoil? How can one dispel the suspicion of conflict of interest when Goldman Sachs is, now more than ever, judge and participant? Let us add that Barack Obama's possible accession to the White House probably won't change much: some main names cited to succeed Mr. Paulson at the Treasury are - not unexpectedly - those of bankers from Goldman Sachs!

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