(Editors Note: I have been prefacing the recent news of the SEC lawsuit with claims that it is merely for appearances. Here's an article that explains the timing.)
There's something fishy about the SEC's suit against Goldman Sachs. The timing seems particularly odd. Why did the SEC decide to drop this bombshell on a Friday, just when the market had reached a 12-month high and the economy was showing signs of improvement? Was it because they thought they might need the weekend to change course if the market suddenly plummeted 400 points? And why was Goldman picked over the other Wall Street banks? Was it because Obama knew that by targeting the most hated bank on Wall Street he could garner support for his reform agenda? The whole affair smacks of a political maneuver. Yes, the momentum IS building for regulatory reform, but the congress is still stuck in the mud, which makes the SEC suit look particularly suspicious, like a clever public relations ploy designed to push Obama's toothless bill over the finish line.
Obama has the wind at his back. Now that he's bloodied Goldman's nose and gotten the public riled up, his reform bill will probably pass. But Obama's financial reforms are much like Obama's health care; half-loaf remedies that translate into a few extra votes on election day, but merely transfer more middle class wealth to giant corporations. It's pathetic.
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