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It will take a long time to judge the success of the federal government's efforts to revive the economy, fix horrendously expensive health care, rescue American automakers and reduce climate-changing emissions.

One outstanding triumph, however, is already evident - the bailout of financial bank Goldman Sachs.

Only last fall it looked like all the financial banks might go the way of Lehman Brothers and Bear Stearns, i.e. extinction.

But Uncle Sam stepped in with lots of help: billions in cash, mopping up as many toxic assets as possible, letting banks make up their own values for the toxic assets they still have, announcing that none of the failed institutions would be allowed to fail.

It worked marvelously well for Goldman Sachs.

First, it borrowed $10 billion from the Troubled Asset Relief Program.

Then, when insurer AIG looked like it would fail, the U.S. pumped $175 billion into it, of which $12.9 billion immediately went through to Goldman Sachs for full payment of its claims on AIG. (Eat your heart out, secured creditors of Chrysler.) Oddly enough, Goldman was the only private company to participate in planning the AIG bailout.

With its financial bank competitors gone and financial markets awash in government money, Goldman Sachs has thrived.

Last week, it paid back the $10 billion from the TARP, largely freeing it of federal oversight that might restrict executive bonuses and such.

Then this week, it told its staff in London that the company is having its most profitable year ever and is on track to make record bonus payouts.

This is the kind of financial wizardry many voters hoped for in electing Gov. Jon S. Corzine, the former chief executive of Goldman Sachs. Instead, the state's financial picture looks more like that of AIG.

The real financial genius, however, may be in simply backing the right politicians at the right time.

Goldman Sachs has been the fourth biggest corporate donor to political campaigns in the past two decades, according to the nonpartisan Center for Responsive Politics. In last year's elections, the company gave $5.9 million, with 75 percent of it going to Democrats.

Give a few million, get multiple billions. ... In modern America, that's worth obscenely big bonuses.

Maybe they should change the name of the company to Golden Sacks.

Wildwoods dispute

Last week in this column, Marc Lambert, president of Senior Excursions in Wildwood, said his company will handle trips for a half-million senior citizens this year, with three-quarters of them coming to the Wildwoods.

Dick Adelizzi, of rival Suncoast Tours (a division of Great American Trolley Co.), took issue with Lambert's numbers this week.

Adelizzi said Lambert's figures would require about 9,375 busloads of seniors coming to the Wildwoods this year, whereas he estimates the total number of buses from all companies will be about 200 in the spring and 300 in the fall. That would be about 20,000 seniors, he said.

Lambert said Thursday his numbers are accurate and that his rival frequently disputes everything he can about Senior Excursions.

"I'm standing by my numbers 100 percent," Lambert said. "If he wants to show the numbers on their books, I'd be more than happy to show the numbers on my books."

Thirty years ago, when I was starting out in journalism as a reporter for a weekly newspaper in the Wildwoods, such disputes between business people and organizations were frequently in the news. For years, two chambers of commerce disputed which one was the legitimate representative of businesses on the island.

I leave it to readers to form their own opinion about the current dispute. I'll simply savor the nostalgia of it.

E-mail Kevin Post:

KPost@pressofac.com

1 comment:

• tpc616 (1) posts 4:05 pm

  Give me a break. Another conspiracy theory article written by a clueless commentator. First, if AIG were to default on its derivative payables, GS will likely to stand to lose less than almost all other counterparts (including many state and local governments) because of its double layer credit default insurance. Never mind the fact that AIG cannot "selectively" default on specific payables. In fact, some speculate they will make money from it. Second, GS receives far less TARP funds than most top banks, in many cases by many times less. If others don't know how to make huge profits from this, it's their problem.

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