Goldman is "lucky" to have friends in high places

On Saturday I explained just a few of the conflicted relationships and the revolving door that exists between Washington's Political Class and Goldman Sachs. But this piece in Salon really tells the tale.

And now this by Kathleen M. Howley and Christine Harper:

May 11 (Bloomberg) -- Goldman Sachs Group Inc. agreed to pay about $60 million to settle a Massachusetts investigation into the packaging of mortgage securities at the root of the collapse of the U.S. housing market...

The bundling of the riskiest type of mortgages into securities turned the U.S. housing slump into a global recession as foreclosures deflated bond values and toppled Wall Street firms such as Lehman Brothers Holdings Inc. The Massachusetts attorney general has investigated Fremont Investment & Loan, now defunct, and H&R Block Inc., owner of Option One Mortgage Corp., for making the types of mortgages that Goldman securitized.

“There’s no dispute that Goldman Sachs and other securitizers have been involved intricately in this whole process by which loans were made to homeowners and as we have argued, in many instances, destined to fail,” Coakley said.

Goldman will face consequences at the state level, but in Washington... Goldman rules the roost.

2006 and 2008 gave America a chance to begin housecleaning in Washington. We'll need to continue those efforts in 2010.

Tim White