Does Goldman Sachs Run the World?

NOTE: I received the post below via email:

Does Goldman Sachs Run the World?

Not completely, but it doesn't mean they aren't trying. It seems that, literally, only flesh eating bacteria can stop these guys.

The Canadian dollar breaks above parity and, lo and behold, last Thursday, a Goldman managing director, Mark Carney is named governor of the Bank of Canada.

Mario Draghi, governor of the Bank of Italy, is also a former Goldman managing director.

Then, of course, there is U.S. Treasury Secretary, Hank Paulson, who was Chairman and Chief Executive Officer of Goldman.

Goldman did have a man at the Bank of England, but their presence there has gone astray for the time being. Goldman man David Walton was on the Bank of England's Monetary Policy Committee from July 2005 until June 2006 when he died at the age of 43 from necrotizing fasciitis, i.e., flesh eating bacteria.

Unimpeded here by flesh eating bacteria, Goldman's presence in United States government financial power circles remains very strong. Prior to Paulson, during Bill Clinton's second administration, Robert Rubin served as Treasury Secretary. Rubin was Vice Chairman and Co-Chief Operating Officer at Goldman from 1987 to 1990. From the end of 1990 to 1992, Rubin served as Co-Chairman and Co-Senior Partner at Goldman. And, Robert Zoellick, new head of the World Bank after Paul Wolfowitz was booted, was a managing director and chairman of the Goldman's International Advisors department.

How do they use these positions? Who knows all the details? But, at a regularly scheduled Fed monetary policy meeting on August 7, the Fed failed to cut interest rates. Records, obtained through a Freedom of Information Act request by Kenneth H. Thomas, a lecturer at the University of Pennsylvania's Wharton School, show that the next day Rubin called Fed chairman Bernanke. Bernanke cut the discount rate 10 days later. Rubin says he called Bernanke to tell him he was doing a good job.

With the sub-prime crisis making markets extremely volatile, it was a difficult period for most investment banking firms, but not for Goldman.

On September 20, Goldman reported much better than expected 3rd quarter results. Analyst Glenn Schorr at UBS AG writes the earnings demonstrate Goldman's "ability to not only navigate choppy waters, but make a ton of money doing so." Better at navigating choppy waters? Do you think your local investment club would show a better performance if your club members managed to get positions running the U.S.Treasury, the central bank of Canada, the central bank of Italy and the World Bank? And if this isn't enough, wouldn't it be great to get Ben Bernanke to take your call in the middle of the sub-prime crisis?

So what are the Goldman boys up to now? Columnist and political insider, Robert Novak is reporting that the Goldman boys are getting ready for Hillary to move into the White House. Despite Treasury Secretary Paulson working for a Republican Administration, Novak reports:

Eyebrows at the Treasury were raised last Tuesday when Secretary Henry M. Paulson Jr. named a major Democratic fundraiser to an important advisory role. The next day, eyebrows were still elevated when Undersecretary Robert K. Steel participated in an event spearheaded by Bill Clinton's two Treasury secretaries.

Oh yeah, Steel also happens to be a retired Goldman Sachs vice chairman who worked at the firm with Rubin and Paulson.

Here's more from Novak, obviously scratching his head at Paulson's moves:

A longtime Republican officeholder now in the Bush administration noted these developments and e-mailed a fellow Republican outside the government: "This leads some to wonder whether this Treasury has become the pre-placed Hillary Clinton team." ...the former Goldman Sachs chief executive does not act or sound much like a conservative Republican to the GOP remnant at the Treasury. "It's not in Hank Paulson's DNA," one official told me. Is he loyal to Bush? "Hank is for Hank," the official replied.