Goldman, Bernanke Testimonies Released
Washington is buzzing with the various testimonies and commissions ongoing today. Watch Fed Chairman Ben Bernanke and other speakers at the National Commission
Jul 31, 202073.9K Shares2.1M Views
Washington is buzzing with the various testimonies and commissions ongoing today. Watch Fed Chairman Ben Bernanke and other speakers at the National Commission on Fiscal Responsibility and Reform, the president’s deficit commission, live here. And watch Sen. Carl Levin’s (D-Mich.) Senate Permanent Subcommittee on Investigations interrogate Goldman Sachs executives live here.
Both the debt commission and Levin commission have released prepared remarks as well.
In today’s prepared testimony, Ben Bernanke argues that the government needs to fix its tax code and cut entitlements, or else face fiscal doom:
“„[The] federal budget appears set to remain on an unsustainable path….Unfortunately, we cannot grow our way out of this problem. No credible forecast suggests that future rates of growth of the U.S. economy will be sufficient to close these deficits without significant changes to our fiscal policies….
“„The commission will have the difficult job of weighing the economic, social, and other benefits of these [entitlement] programs and comparing the implications of cuts in these areas against other means of closing the fiscal gap. Choices regarding Medicare, Social Security, and other spending programs cannot be made in a vacuum but must be combined with decisions about how much revenue the government will raise and how it will raise it. No laws are more basic than the laws of arithmetic: For fiscal sustainability, whatever level of spending is chosen, revenues must be sufficient to sustain that spending in the long run.
And here are the Goldman testimonies. On the first panel are Daniel Sparks, former head of the mortgages department, Joshua Birnbaum, former managing director in structured products, Michael Swenson, managing director in structured products, and Fabrice Tourre, indicted in the Securities and Exchange Commission civil fraud case against Goldman Sachs and executive director in structured products. On the second panel are David Viniar, Goldman’s chief financial officer, and Craig Broderick, the chief risk officer. And on the third and final panel is Lloyd Blankfein, chief executive officer.
Tourre argues, “I deny — categorically — the SEC’s allegation. And I will defend myself in court against this false claim,” and goes on to detail that he made full disclosures about the structure of the mortgage-backed securities deal to the client who took the losing half of the bet.
And Blankfein’s testimony is largely conciliatory, though he says that Goldman has done nothing illegal or unethical with its mortgage products: “While we strongly disagree with the SEC’s complaint, I also recognize how such a complicated transaction may look to many people. To them, it is confirmation of how out of control they believe Wall Street has become, no matter how sophisticated the parties or what disclosures were made. We have to do a better job of striking the balance between what an informed client believes is important to his or her investing goals and what the public believes is overly complex and risky.”
Paula M. Graham
Reviewer
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