It's Time to Stop the Looters on Wall Street

And financial reform is the only way to do that
By Kevin Spak,  Newser Staff
Posted Apr 19, 2010 11:43 AM CDT
It's Time to Stop the Looters on Wall Street
Traders work in the Goldman Sachs booth on the floor of the New York Stock Exchange Monday, April 19, 2010.   (AP Photo/Richard Drew)

The SEC's charges against Goldman Sachs reveal a whole new kind of fraud at work in the financial crisis, writes Paul Krugman of the New York Times . If Goldman had simply sold securities while betting they would fail, it would be “reprehensible” but not illegal. But selling securities deliberately designed to fail? “That's what I would call looting.”

This kind of malfeasance—and it wasn't just Goldman—proves that there's an “urgent need to change Wall Street,” Krugman argues. If you listened to Republicans or financial lobbyists, “you’d think that everything will be fine as long as the federal government promises not to do any more bailouts. But the fact is that much of the financial industry has become a racket,” and only strong regulatory reform will change that. (More Paul Krugman stories.)

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