Peter Schiff April 21st 2010 on the Financial Regulation Bill
Peter Schiff quickly sums up the tangled web between congress and Wall Street.
Congress is trying to tell us, that one of the reasons that we need this financial regulation is to make sure that taxpayers are never again forced to bailout these too big to fail firms.
Well, who was it that forced us to bail them out in the first place? The same guys that say we need this bill, it was congress, congress bailed them out, and they did it despite the fact that they had no legal authority to do so, in fact bailing them out was unconstitutional.
We don’t need new laws, we just need to force congress to obey the laws that already exist. What congress is saying is that we need rules to prevent us from doing again, what we never should have done in the first place.
Schiff also explains the Goldman Sachs, AIG, SEC relationship.
These securities that Goldman Sachs is being accused of fraudulently marketing, these are the very securities that brought down AIG. AIG went bankrupt because they insured securities like this.
In fact they insured some of the very securities that the SEC in now charging Goldman Sachs with fraudulently creating and marketing. And as a matter of fact, when AIG went bankrupt, twenty billion dollars of the money passed through AIG hands right to Goldman Sachs hands.
So they can collect the money that they made wagering against their own securities, that the SEC is now accusing them of fraudulently creating. I mean come on, the right hand is bailing them out and left hand is slapping them on the wrist.
This whole thing is a complete fiasco. If congress had simply allowed AIG to fail, Goldman probably would’ve been bankrupt. That would have been a much bigger punishment if they’d been involved in fraud than simply making them pay a small fine…
I keep hearing the free market regulating itself is a fantasy. In this climate, it really is a fantasy because congress bails out companies that should have failed. Maybe someday we’ll live in the fantasy world where unwise and fraudulent companies just go out of business.