In the attached New York Times op-ed contribution piece, Bethany McLean (who was a co-author of "The Smartest Guys in the Room", which chronicled the Enron fiasco) outlines the players in the Goldman Sachs inquiry in a manner which is consistent with my series of posts that discuss the common threads of fraud. She mentions the marks, the enablers and the perverse financial incentive that led Goldman to favor one client over others.

Here is what she adds to the equation and it cannot be said any better: the one entity that had a duty to protect us from the financial disaster was our own government. Not Goldman, not its "dumb money" clients and not the ratings agencies.

It was our government that repealed Glass-Steagall, which most assuredly has a direct link to the WorldCom fiasco. It was our Supreme Court that made it impossible to hold aiders-and-abettors of fraud (read: enablers) liable for even knowing lies made with the intent to defraud securities purchasers. It was Congress that preempted all state securities laws that would have filled these gaps.

Let us all hope that the new financial legislation will restore some semblance of fairness and accountability so that the next time Congress calls someone to task over a wide reaching financial fraud, those who were harmed can expect something more than finger-wagging.


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