Politico quoted a Goldman lobbyist Monday saying, "We're not against regulation. We're for regulation. We partner with regulators." At least three times in Goldman's conference call Tuesday, spokesmen trumpeted the firm's support for more federal control.
Fancy that. A big company that welcomes heavier government regulation. Why would that be? Let Timothy Carney of the Examiner explain:
Vague public calls for "reasonable regulation," of course, are often little more than smoke. But Goldman's annual report explicitly endorsed stricter federal capital and liquidity requirements. Goldman reported on the conference call that it holds 15 percent "Tier 1 capital," meaning it is very liquid and not very risky. Goldman can play it safe, you see, without needing a regulation. But regulations prevent smaller competitors from taking the risks needed to compete with Goldman (and every competitor is smaller).
This is true, to varying extents, with all big businesses. Large companies can afford the resources needed to handle additional regulatory burdens, while smaller competitors often find that they must take resources away from their core business in order to comply. The regulators become a barrier to entry and that works to the advantage of Goldman Sachs, or Walmart, or Microsoft, or just about any large company you might name.
Democrats often rail about Republicans and their supposed support of a chimerical "big business" bogeyman that supposedly is exploiting the masses. It's an open secret that any company that is big enough to earn the term usually provides plenty of support to, and often prefers, the Democrats. It's a win-win: the companies get a big nasty friend that hassles the competition, and the big companies finance plenty of jobs for bureaucrats.
Don't worry about Goldman Sachs. They'll gladly take the short-term publicity hit for a chance to hobble their competitors. It makes good business sense.
4 comments:
Hm, that's first time I've heard "being accused of fraud" as something that makes good business sense.
I would be really interested in reading a report or article about how big business leaders vote Democrat. (I'm not calling a bluff or anything - I am truly interested.)
Ever heard of Warren Buffett, Amanda? Start there. I'll get more later.
Mark,
of course there are some business leaders who are Dems. It's a big country. But I am pretty certain a large preponderance of business leaders in this country side with the right. Last time I checked, NAM and the Chamber of Congress weren't exactly carrying water for Obama (or any Democratic President ever.)
Rich
Last time I checked, NAM and the Chamber of Congress weren't exactly carrying water for Obama (or any Democratic President ever.)
I assume you mean Chamber of Commerce. And yeah, they do support Republicans. I didn't say that such organizations don't support Republicans. What I am saying is that very large organizations have little trouble making peace and even common cause with the regulatory state that Democrats prefer, because they can game those systems in ways that smaller competitors cannot.
And as I suspect you know, organizations like the Chamber of Commerce tend to champion the causes of smaller businesses. Which is also my point -- the notion that Republicans are the party of Big Business has been misleading for most of my lifetime, if not longer.
Post a Comment