The SEC’s suit against Goldman has clobbered the bank’s stock, and energized the public so as to shift the balance of power away from the banks towards the government. It is now much harder to oppose significant regulation because of the populist impact of the documentation of Goldman salesmen making like con men. This has raised a question from the House Oversight and Government Reform Committee Republicans. They ask of the SEC: was there “any sort of pre-arrangement, coordination, direction or advance notice” from the SEC to the Administration or Congressional Democrats. Justice should not be about PR, and while the Republicans are not contending that the enforcement of laws has been compromised, I guess the timing looks fishy. But fishy timing is a minor issue. This is a reminder that regulators are not independent of those who want more regulation or those who want less – they have bosses who will seek to use or badger them for their own political goals. Just maybe, this was the goal of the question in the first place.
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