A cynical view on the SEC vs. Goldman Sachs case

http://www.campaignforliberty.com/article.php?view=808

Commentators are debating whether the Justice Department will be able to prove its civil fraud case against Goldman Sachs. Unfortunately, they're missing the point. The Justice Department didn't bring its suit with the aim of proving that the company committed fraud. It brought its suit to get a massive amount of money for the federal government in a pretrial settlement of the case.

Here's how the racket works. The government knows that its litigation will cost Goldman Sachs millions of dollars in litigation costs, including attorney's fees, deposition expenses, bad public relations, and loss of revenues. So, the government calculates that the company will be willing to settle for a large amount of money to save itself from all that aggravation. The government accepts the settlement. The Justice Department lawyers celebrate that they've "won" the case. Federal officials, ever more desperate for more revenues to pay for their out-of-control spending, are exultant over the "free" monies that have been deposited into the government's coffers.

The feds aren't going after Goldman Sachs on criminal charges of fraud, which would fall within the ambit of proper governmental powers. Instead, they're only going after the company on civil charges of fraud. They're seeking money, not jail time.

What's that all about? If investors have been defrauded, why can't they sue for their damages? Why shouldn't they, not the government, receive the money for damages they've allegedly suffered? What business does the government have suing for civil damages? It hasn't suffered any injury.

It's all about money. As the deficit becomes larger and larger, we can expect to see the federal government desperately looking for more ways to extract money from private businesses.

The real fraud is the whole idea of a regulated economy. When public officials assumed the power to regulate economic activity many decades ago, they expressly represented that it would protect people from bad things happening to them. That representation was false and fraudulent. Regulations and regulators don't protect people. They simply lull people into thinking that the government is taking care of them. The regulated economy simply provides the government with another means of legally stealing or extorting money from the private sector to satisfy the ever-voracious financial needs of a bankrupt government.