Prof. Jacobson steps into the breach:
It would be easy to cheer as the Obama administration seeks to take down Goldman Sachs. After all, Goldman Sachs has become a proxy for Wall Street, since so many of the old icons no longer exist or have been consumed as a result of the 2008 credit crunch.
But do not cheer too quickly this time. As even the NY Times now is admitting, the actual civil charges against Goldman Sachs are far from clear cut.
...As tempting as it is to say "to hell with Goldman Sachs," remember the saying about "first they came for ...."
Health insurers, pharmaceuticals have had their day with ObamaCare; the energy industry is awaiting some sort of cap and trade or energy bill.
Taking down the leading, and in many ways last remaining, Wall Street powerhouse will remove yet another center of private industry power.
The serial removal of centers of power outside the federal government in Washington, D.C. is a worrisome trend which becomes more difficult to reverse as the dominoes fall.
Don't wish too hard for the demise of Goldman Sachs. Because Goldman Sachs is not the end game.
Just to have an 80's flashback, when the Feds went after Drexel Burnham, Drexel was an upstart whose takeovers financed by high yield bonds were upsetting the established order; aligned against Drexel were the old line investment banks and much of the Fortune 500, as well as the SEC and DoJ.
My guess is that Goldman has more powerful allies now than Drexel had then. And so far, the DoJ is taking a pass on what the NY Times is now admitting is a weak suit. I puzzled over the Goldman response last night; if a careful reader could tell me which side I am on, I would love to know. Goldman Sachs is as unsympathetic as they come, but I have never been a fan of weak, politically motivated, headline grabbing prosecutions.