A couple of weeks ago I noted that Lloyd Blankfein, the CEO of Goldman Sachs, seems to meet the CIA’s requirements when it selects targets for drone attacks. If it is determined on the basis of current intelligence that such an individual poses “a continuing threat to US persons or interests” then the CIA has, under a presidential order, the legal authority to kill him.
This is not an argument for aiming drones at Wall Street but simply a way of drawing attention to the way America identifies its national security threats.
I’m no economist but it turns out that in terms of identifying the threat posed by Goldman Sachs I was seriously understating the threat posed by Wall Street’s most successful merchant bank. Simon Johnson, former chief economist of the International Monetary Fund, a professor at the MIT Sloan School of Management, and a senior fellow at the Peterson Institute for International Economics, says that in its dealings with the Greek government, Goldman Sachs has acted in a way that is “fundamentally destabilizing to the global financial system.”
A single rogue trader can bring down a bank – remember the case of Barings. But a single rogue bank can bring down the world’s financial system.
Goldman will dismiss this as “business as usual” and, to be sure, a few phone calls around Washington will help ensure that Goldman’s primary supervisor – now the Fed – looks the other way.
But the affair is now out of Ben Bernanke’s hands, and quite far from people who are easily swayed by the White House. It goes immediately to the European Commission, which has jurisdiction over eurozone budget issues. Faced with enormous pressure from those eurozone countries now on the hook for saving Greece, the Commission will surely launch a special audit of Goldman and all its European clients.