Watching Goldman Sachs executives testify on Capitol Hill before the Senate Permanent Subcommittee on Investigations, I can’t help but think that the people at the tables are a lot less worried about keeping their jobs in the long term than some of the people up on the dais. Although interestingly, of the nine members on the subcommittee only two are up for re-election this year, and both are Republicans: John McCain of Arizona and Tom Coburn of Oklahoma. Only McCain seems to be facing a tough re-election bid.
So maybe nobody is concerned about his or her job. Maybe It’s All Good up on the Hill today, and the parties are playing their roles secure in the knowledge that at the end of the day everyone will go home and nothing will change. Because there is one thing that the Goldman executives and the politicians have in common: the status quo benefits them all.
UPDATE, 2:55 p.m. ET - I’m listening to the hearing. Words I’m thinking of to describe the two sides of this verbal transaction today … for the questioners: “ignorant,” “combative,” “condescending,” “posturing,” “preachy,” “hypocritical,” “grandstanding”. For the respondents: “obfuscating,” “delaying,” “denial,” “insincere,” “annoyed,” “defiant,” “unconcerned.”
UPDATE, 3:15 p.m ET - I neglected to note that Ted Kaufman, Joe Biden’s replacement in the senate, is subject to a special election on Nov. 2.
UPDATE, 4:45 p.m. ET - The subcommittee just took a break so the senators could attend a test vote on financial regulation. But not before Goldman Sachs’ David Viniar got off the line of the day in response to a persistent, if poorly-worded, question from Carl Levin. Levin was trying to get Viniar to speak to whether Goldman customers had a “right” to expect securities sold by Goldman to “succeed.” What he was getting at was should Goldman customers believe that, because Goldman was marketing a deal, that there was an implicit expectation that Goldman wanted the deal to make the customer money. Viniar was having trouble getting his mind around the question, and so Levin read back a comment from an email written by a Goldman salesperson that referred to one of the subprime deals in question as “a shitty deal.”
How did Viniar feel, hearing that a Goldman salesperson wrote that, Levin asked.
Viniar replied that he felt it was regrettable such a sentiment was expressed in an email.