Port should sack Goldman Sachs

Times-Standard My Word
Saturday, May 5, 2008

In the Saturday, May 24 edition story “Goldman Sachs to pitch port-rail,” the claim was made by Goldman Sachs’ VP Jeffrey Holt that “improvements to the port and rail assets will potentially bring thousands of jobs to the region.” The key word is “potentially.”

The dollar has lost 40 percent of its value since 2000 and it’s projected to go even lower. The purchasing power of every dollar you hold will buy less and less as the wave of inflation rolls over the globe for the next several years, an inflation caused by the now-18 percent annualized increase in the money supply created by the Federal Reserve.

Goldman Sachs is one of the large New York firms that accesses this newly created money before inflation sets in, and they deal in trillions of it. By the time regular folks like us get any money, if we ever do, we’re dealing with double-digit energy, health and food costs.

Dumping this paper in exchange for Humboldt Bay’s physical infrastructure is a good trade for GS and their investors, but one has only to look at what GS has done with other small town infrastructures to see Humboldt’s future

Take Montana Power and Light, a small power company in Montana that gave its residents some of the lowest electric bills in the lower 48, and its shareholders regular dividends, but was then “advised” by GS. Montana Power and Light ended up with their assets divided, sold off, and the company left bankrupt from insurmountable debt. Apparently, Goldman Sachs advised both the “investors” and the power company, but the investors were on the winning end. GS often has a conflict of interest as it holds stakes in many of the companies it’s “advising.”

Consider the continuing mortgage securities debacle that left most on Wall Street heavily leveraged with huge losses. Not so for Goldman Sachs. As they sold risky mortgage-backed securities to their clients on the one side, GS heavily shorted the same market on the other side, using their own money, eventually posting record gains for their own shareholders in 2007.

While foreclosures abound all across this country, GS executives, as a reward for their acumen, get some of the highest bonuses on Wall Street.

Further, GS has been implicated in IPO stock fraud, naked short selling, and gold price suppression in order to mask the real inflation rate calculated by independent researchers as over 11 percent, even as official statistics claim a 4 percent annualized increase in consumer prices.

Goldman Sachs is the largest investment bank in the world and an acting arm of the U.S. Treasury, whose former members and CEOs have many seats in the federal government with the revolving door always spinning. The current and former treasury secretaries Rubin and Paulson, White House Chief of Staff Joshua Bolton, current head of the World Bank Robert Zolick, the chairman of the New York Stock Exchange, to name a few, are all former executives of Goldman Sachs. If you like recent economic policy and think this country is doing well, then you’ll love what Goldman Sachs has to offer.

There is no need for a large port operation in Eureka. If there is any congestion in West Coast ports today, there will not be tomorrow. Shipping a container from China to the United States has climbed from $3,000 to $9,000 and as costs for any kind of shipping continue to rise, the global economy will be looking a lot more local. A burgeoning recession in the United States means we will need to have local resources consumed locally, including products from California’s Central Valley.

A better option for the bay would be a major hub for the Sail Transport Network, a group of sailors currently setting up a network of transportation and freight all without diesel, using sailing ships. And eventually, we will want the benefits of a passenger rail running the length of the coast from Seattle to San Diego. Difficult propositions for sure, but much better than giving away Humboldt Bay to a hungry global giant.

Ruby Carter is a Eureka resident. Opinions expressed in My Word pieces do not necessarily reflect the editorial viewpoint of the Times- Standard. MY WORD Ruby Carter

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