William D. Cohan has a complete jumble of a piece over at The New York Times’s Opinionator site.

Cohan writes that since Goldman Sachs (an Audit funder) has been used as a punching bag that helped boost financial-reform bill, we ought to “let Goldman be Goldman.” In other words, free it of regulatory constraints and let it run buck wild again.

Now that a major political victory in the form of Dodd-Frank is within the grasp of Goldman’s enemies in Washington, the time has come for politicians to lay off the firm and to allow Goldman and the rest of Wall Street to return to some semblance of normalcy. The time has come to let Goldman be Goldman.

Poor put-upon Goldman.

This is bizarre reasoning to say the least. First, the financial-reform bill hasn’t even passed, and even if it does, it’s hardly onerous. It’s more business as usual than anything.

But that isn’t the only faulty logic here.

The “everybody else did it” excuse was something I learned didn’t fly in preschool, but Cohan trots it out here:

Despite the political haymaking, the truth is that Goldman Sachs did nothing differently in the years leading up to the crisis than did other firms of its stature. Nothing has come to light in any of the very public recent assaults on the firm that also could not be discovered by looking through millions of documents at every other Wall Street firm with large trading and capital-markets businesses.

Yeah—so? They’re all covered under the bill, too. It isn’t the Goldman Sachs Only Law.

Cohan also buys into the naive just-let-them-fail argument favored by the likes of the WSJ editorial page. So just let Goldman out of tougher banking regulation and say we won’t bail them out again when they get into trouble next time (which they inevitably will).

By giving up its status as a bank holding company, Goldman can boast about how it — nearly alone — navigated the crisis by cleverly shorting the mortgage market instead of pretending it was like every other firm, just luckier. It can take calculated risks with investors’ money. It can make billions of dollars — if it is able, once it is no longer subsidized by taxpayers — and pay those billions to its lucky employees. That’s the American Way.

But the next time Goldman Sachs runs into serious trouble — and it will — let the free market determine its fate.

Just letting Goldman (in its current form) fail, though, would deal the financial system a grievous blow. Talk about rattling confidence. It’s easy to say “let them fail” when you’re not in a September 2008 moment. But when you’re staring into the abyss, Goldman et al have a gun to the American people’s head. Dare you to let us fail, they’ll say. You don’t know what the consequences will be, but it won’t be good.

The only real way to end Goldman’s too big to fail status is to make it and its peers smaller and less interconnected. This isn’t a complicated thing, however much Wall Street and its apologists like you to believe it is.

Step back and think about what Cohan is saying here. We let Goldman become a bank-holding company in 2008 so it wouldn’t fail. That gave it access to cheap and ready Fed money, which it has used to make billions and billions of dollars, but also put it under a stricter regulatory apparatus. Now that it doesn’t need that money, Cohan suggest we let it out from under the regulation.

Letting Goldman be Goldman took down the world economy. It would be beyond foolish to go back to the status quo ante.

Further Reading:

Carrying Water for White-Collar Criminals: William D. Cohan pleads for a Goldman convict to be pardoned.


Too Big to Fail and Reform
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The New York Times’s Devastating Goldman Piece: Morgenson and Story unload on the bank’s conflicted business model

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.