Goldman Sachs 4-24-2016

24, April 206                       Goldman Sachs

In a perverse game of smoke and mirrors reminiscent of the great magician, Houdini, Goldman Sachs will pay considerably less than the original fine of $5.1 billion to settle accusations of wrong-doing which led to the financial crisis in 2008. Buried in the terms of the settlement, Goldman will be able to write down a minimum of $1 billion through a combination of tax credits and government incentives. For example, the Government has called for Goldman to spend $240 million on affordable housing but will only have to spend 30 percent to fulfill the terms of the agreement through generous tax credits for each dollar it spends on affordable housing. The fines were a concerted effort on the part of the Justice Department to mute simmering public outrage over the shenanigans and outright fraud of Wall Street Banks. This is precisely why  Bernie Sanders has galvanized the youth of the country. His distrust of the titans of Wall Street and backroom deals was echoed by Dennis Kelleher, the founder of the advocacy organization “Better Markets”, who commented “the settlement amount was grossly inflated for P.R. purposes to mislead the public, while the fine print, enabled Goldman Sachs to pay 50 to 75 percent less.”  Other Wall Street banks received similar fine print incentives to lessen the severity of the penalties. With huge speaking fees she has garnered from Wall Street Banks, there appears little hope that much will change under a Clinton administration.