U.S. Economic Policy/ Political Parties

Topic: U.S. Economic Policy

Source: LA Times. By Peter Nicholas
Date: April 18, 2010
Title: Goldman Sachs case could help Obama shift voter anger


Fraud charges have been brought against the investment bank Goldman, Sachs & Co. that may strengthen the president’s campaign to tighten regulations on Wall Street. These charges have to do with complex financial dealings favoring insiders. For Obama, the accusations against the bank offer a chance to revive the sentiment that he and his party are protecting Americans victimized by the economic meltdown. Recently, Republicans have been successful in criticizing the administration, but with this accusation of Goldman Sachs allows Obama to spread the message that government intervention is necessary to stop unregulated trading that favors well-connected insiders. The SEC claims that Goldman stacked the deck on billions of dollars in mortgage securities in favor of insiders and against unknowing investors, a charge Goldman denies. This situation plays into the hands of the Obama administration because it could cause voter anger to turn towards the Republican Party. Beginning Monday, Obama's campaign website will carry a new section laying out the case for tighter financial regulation. As the midterm elections approach, both parties will try to spin this off to gain themselves the most votes possible.

The fraud charges brought against Goldman, Sachs & Co. could lead to change in our nation’s economic policy. Obama wants more regulation of Wall Street, while the Republicans are against this. A compelling case is to be made to the American people about how the Republicans have put their short-term political interests over the long-term interests of the country. In this environment there is great political danger in going along with the big banks to defend the status quo. Republicans are put in a delicate spot because they risk alienating the "tea party" activists if they appear too close to big financial institutions. But Obama has vulnerabilities of his own. Goldman Sachs employees contributed nearly $1 million to his 2008 presidential campaign, and he won’t want to lose this money. I believe that this scandal is good for the Obama administration because it will lead voters away from Republicans and the big banks, and cause them to want more regulations on Wall Street.



LA Times Article

http://www.latimes.com/news/nation-and-world/la-na-obama-goldman18-2010apr18,0,3834544.story