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Fraud*
According to the Collins English Dictionary 10th Edition fraud can be defined as: "deceit, trickery, sharp practice, or breach of confidence, perpetrated for profit or to gain some unfair or dishonest advantage".[1] In the broadest sense, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation. Defrauding people or entities of money or valuables is a common purpose of fraud, but there have also been fraudulent "discoveries", e.g. in science, to gain prestige rather than immediate monetary gain
*As defined in Wikipedia

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Tuesday, November 20, 2012

Goldman Sachs's "Porous Safety Net"

Goldman Sachs is something else.  It tries to revise history;  it makes ridiculous suggestions; it makes horrific predictions; it should be ashamed of itself. 

The following excerpt is from a Forbes article quoting Goldman Sachs:
Why did household formation collapse?  Goldman’s research team suggests the headship rate, or the percentage of people that are heads of a household, broke down as immigration flows to the U.S. slowed and young people either stayed with their parents for longer or “doubled up” with relatives and roommates.
Such revisionism brings to mind 1984 and Winston Smith's "job to re-write past newspaper articles so that the historical record always supports the current party line."   In the present instance, it is the banks' line that they had nothing to do with creating the sub-prime mortgage and securitization frauds that brought down the financial system, that foreclosed on millions of people who were sold inappropriate mortgages so that the banks could earn substantial profits, which in turn gave the executives huge salaries and munificent bonuses based on their egregious unearned profits.  Unemployment caused foreclosures during the financial crisis that Goldman helped create. But Goldman recalls its own bad deeds as "the heads of a household" breaking down as immigration flows slowed!  How nice to revise history in your own favor or more accurately, of putting your past into a "memory hole."  The two histories, the one that no longer exists for Goldman and the one that it re-writes above, are excellent examples of  "doublethink."

Then as to Mr. Blankfein's ridiculous suggestions, those can be found on the CBS blog by Scott Pelley;

Here Blankfein says that the people should not expect to get the entitlements of Social Security, Medicare and Medicaid.  He wants people to lower their expectations for retirement and health benefits that should be "slowed down and contained" because the government can no longer afford them.

It is ridiculous to say that the government cannot afford Social Security.  Any sovereign government that has its own currency can afford to pay whatever it chooses to pay for! 

Here's what Joe Firestone says:

– Social Security has no solvency or “running out of money” problems. The SS crisis is a phoney one. No solution to this “fiscal crisis,” bipartisan or partisan, is needed. What is needed is a solution to the political problem of getting SS’s funding guaranteed in perpetuity  by Congress, just the way it guarantees funding for Medicare Parts B and D.

– The same applies to the so-called Medicare crisis. It too is phoney, and can be solved easily by Congress guaranteeing funding in perpetuity to Medicare Parts A and C.

– More generally, there is no entitlement funding crisis in the United States, except a political crisis where US politicians are determined to ignore their constituents and cut back on an already inadequate safety net either because they believe in, or want others to believe in false ideas about fiscal responsibility and nature of the Government as a giant household.  (from an article in New Economics Perspectives by Joe Firestone)
Finally, Blankfein makes a horrific prediction for the future of others:  that society should be one where "the safety net would be more porous and lower to the ground." 
  
And for him I would wish that his safety net be high and porous:  no more taxpayer bailouts; no more huge unearned salaries;  no more big bonuses;  no more bets against the economy and finally, full prosecution under the law for accounting control fraud--soon.

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