A FutureOfCapitalism.com reader writes in response to today's annnouncement of SEC charges against Goldman Sachs to suggest that Goldman is a useful scapegoat for the financial crisis. It's easier for the Obama administration to blame Goldman in part because it's harder to blame the Federal Reserve (Mr. Obama retained Chairman Bernanke and promoted NY Fed president Timothy Geithner to Treasury secretary), or to go after a firm, like Bank of America or Citi, that has a lot of voters as customers, or one like Deutsche Bank that is closely linked to a foreign government. The other thing the SEC charge could do is help weaken Goldman's position as it tries to lobby for its interests in the financial "reform" legislation. The SEC charge could also soften Goldman up enough that it could open a door for Treasury, or AIG, or the Fed, to try to claw back from Goldman through some kind of retroactive haircut some of the more than $10 billion it took as an AIG counterparty.
I wrote back that I think Warren Buffett's $5 billion investment in Goldman will help insulate the firm from a worst-case Washington scenario. Goldman wants the kindly, grandfatherly-appearing Mr. Buffett, with his good Obama connections, not the Fabulous Fab, to be the public face of the firm.
In any case, recall that the SEC is at least officially somewhat independent of the White House.
Update: The reader phones in to emphasize the possibility that the SEC charges may open up Goldman to a flurry of lawsuits (and discovery) from anyone who ever bought a CDO, or encourage more mid-level people at the firm to drop a dime to the SEC and tell what they know.