Monday, February 15, 2010

Johnson: EU as Goldman Regulator of Last Resort

Simon Johnson rehearses the role of Goldman Sachs in helping Greece to conceal its debt and notes that the European Commission is now certain to launch an audit of the US bank. This is a welcome development, since Goldman is too deeply tied in to the US power structure and both political parties to expect an honest investigation on this side of the pond. Here is an opportunity for some enlightened European to play the role that Keynes once played: saving capitalism from itself--which seems, alas, to be a cyclical necessity. Populist anger at the arrogance of bankers is threatening to make the US ungovernable, and the consequences will not be pretty. Whatever Goldman has or has not done, it is rapidly becoming the symbol for many things that went wrong. It would be good if an honest broker could establish a credible record. I hope that there is someone in Europe prepared to play that role, now that the Commission has a reason to demand accountability.

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