A Public Official Does His Job

Phil Angelides is the Chairman of the Financial Crisis Commission. Yesterday during testimony he said this to Lloyd Blankfein, the CEO of Goldman Sachs.

“I’m just going to be blunt with you,” he told Blankfein. “It sounds to me a little bit like selling a car with faulty brakes and then buying an insurance policy on the buyer of those cars. It doesn’t seem to me that that’s a practice that inspires confidence in the market.”

(What the company was doing is explained in a McClatchy news article. Most simply it was a set of investments in which the contract created a situation that if the investements prospered, Goldman Sachs made money, but if the investments went sour, Goldman Sachs made even more money. The investor bore all the risk.)

For so much of the time after this unprecedented story of financial incompetence, greed and outright stupidity, public officials have said little but given much to the financial industry. Here is a different voice. Whether in the long term this proves sincere is still a question. But I liked the sound of it. Ethics tends to work well in an environment in which there are penalties for doing wrong. The wrong doers have profited from their actions. This is not the kind of example a country and developing civilization need. It is in fact quite dangerous when a large group of powerful Americans no longer share common interests or abide by the same rules as other Americans.

James Pilant