by Dave McGill

If the Supreme Court can consider a corporation to be the same as a person and classify the buying of political influence as free speech, then I don’t think it’s unreasonable to nominate Goldman Sachs to be the devil. And it’s my feeling that after you read this you might agree with me, if you don’t already.

But first, please bear with me while we take a short detour. Thursday evening, Glenn Beck blamed our current Great Recession on a wave theory postulated by the Russian economist, Nikolai Kondratiev, in 1925. Every 40 to 60 years in a capitalist world-economy, there will be a depression – an economic winter – says the theory, and so said Glenn Beck. It’s that simple. Today’s economic troubles are in no way the result of the financial craziness that took place in the vacuum created when the regulators took the money and turned their backs, according to Beck. The downturn was inevitable. So now, of course, Beck says there is no need for new regulations.

The theory is not accepted by most economists and Kondratiev, himself, was eventually executed by Stalin for espousing it. Glenn Beck will fly away free, of course, but it’s just another of his intentionally distorted versions of domestic events. The truth is that both the Great Depression and the current recession were brought on, in large part, by excessive, financial risk-taking.

Perhaps, the essence of the theory should be that in 40 to 60, or 70, or even 80 years, few will remember the lessons previously learned, and the capitalists will then take advantage of the relaxed oversight to embark on a greed-fed financial orgy. That is essentially what happened, although the present calamity was, of course, greatly enhanced by the ability of the special interests to buy the influence of those who should have been minding the store.

Today, with the GDP about to slow again, home sales falling, foreclosures predicted to rise and nearly 500,000 people filing first-time unemployment claims during the most recent week, this economic disaster is far from over. Alan Greenspan said on Bloomberg, recently, that he now believes the current credit crunch is “by far the greatest financial crisis, globally, ever.” He added that “fiscal affairs are threatening the outlook” for recovery.

But let’s get back to the devil-nominee. The financial orgy mentioned above had many participants and numerous facets. However, the influence of Goldman Sachs can be found in all of them. Sub-prime mortgages were bundled by Goldman into collateralized debt obligations, or CDO’s, and passed on with bogus credit ratings. Credit default swaps were entered into by Goldman with such institutions as AIG. These financial vehicles were specifically designed, with the help of an obedient Congress, to avoid the necessity of setting aside reserves to protect against the toxic assets involved. The derivatives market exploded with the help of Goldman, becoming nothing more than a gambling casino where the rich, the special interests and even national treasuries could bet on nearly anything – and they did, to the tune of trillions of dollars.

The misery spread to Europe as U.S. financial companies, led by Goldman and what could well be an apprentice devil, Morgan Stanley, infected a number of major banks there with bundles of toxic mortgages incorrectly classified with investment-grade credit ratings.

And now, the evil influence of Goldman has surfaced once again regarding the troubles in Greece. It appears, according to information released by the Federal Reserve, that Goldman made millions arranging the currency swaps and other derivatives with Greece that allowed that nation to borrow funds and conceal the true size of its debt. In this case, the devil was literally in the details. As an insider, Goldman was aware of the details. It knew the storm was approaching and managed to derive considerably more profits in deals with third parties, betting that the Greek economy would deteriorate.

It has been charged that Goldman has done this same type of double dealing with its clients in the United States.

In short, the ethics-be-damned policy of Goldman Sachs has spared no opportunity to turn a profit, or loss. That’s right, the company’s greed got so out-of-hand it found itself sustaining serious losses as the recession moved through the year 2008.

But there was little to worry about at Goldman. The company had many friends in high places. Some were bought with extraordinarily large campaign contributions and some were company alumnae. The treasury secretaries for the last two presidential administrations were ex-Goldman employees, while the current treasury secretary, along with the current Treasury chief-of-staff were lobbyists for Goldman. The company’s tentacles reach far and wide throughout the financial sector.

The fall of 2008 was a good time for Goldman, despite the fact that the company was ostensibly in financial trouble. First there was the “back-door bailout” which Treasury Secretary Geithner and Federal Reserve Chairman Bernanke tried their best to keep secret. This took place when AIG received TARP funds and immediately turned over $14 billion it owed to Goldman. Then Goldman itself received $10 billion in TARP funds directly.

But, the best present Goldman got, in the fall of 2008, was the right, along with Morgan Stanley, to become a commercial bank. This was enabled because Congress, motivated by a flood of campaign contributions, had previously repealed the Glass-Steagall Act, a depression-era law designed to prevent excessive financial risk taking.

As a commercial bank, Goldman was entitled to a bunch of goodies, including the ability to borrow funds at an interest rate of 0%. This allowed the company to take free money and either lend it back to the government or invest it in the stock market. It is hardly surprising therefore, that, despite being in a deteriorating economy, Goldman was able to pay the government back its $10 billion by June of 2009, report a second quarter profit of $3.44 billion, and a full-year-2009 profit of $13.4 billion.

This year, while most Americans sweat out the recession, arguably contributed to by Goldman, the company is back in the bonus business big time. The new bonuses will average $498,000 per employee, according to the company’s recent announcement.

The nomination for devil has been made.

Is there a second?