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Washington Matters

In Defense of Goldman Sachs

Floyd Norris, a respected New York Times financial columnist, wrote a thoughtful defense of Goldman Sachs today that addresses many of the questions that I raised Thursday. He acknowledges that much of the consternation is of Goldman's own making, but also suggests that suspicions the company is somehow benefiting unfairly from help in Washington is fueled by the fact the firm is smart and adept at what it does -- such as getting in and out of various high-risk mortgage investments at the right time.

Norris takes issue with the op-ed piece in his own paper that said allowing Goldman to pay back TARP funds and get out from under tough TARP regulations, including limits on bonuses, could give the company an unfair advantage. Goldman has every right to reward its own employees and attract talent with bonuses, he writes, as well as to justifiably feel "proud that its risk management systems worked while others failed." That's true -- but only once Goldman satisfies Congress and regulators that its successes really are entirely due to its prowess, especially since many suspicions were spurred by Goldman's own actions and statements..