That May Journal story and subsequent coverage of Friedman focused, understandably, on the technical conflict that occurred for Friedman when the Fed agreed to make Goldman a bank-holding company, and subject to Fed regulation. Coverage also focused on the Journal’s revelation that Friedman added to his personal, already substantial Goldman stock holdings in December while a awaiting a waiver on his new conflict as Fed chairman/Goldman Regulator. The waiver was subsequently granted. While Friedman’s additional stock purchase didn’t change anything in terms of his conflict—he still had one; it just got slightly bigger—its revelation was enough to force him out as Fed chairman. Fine.

But in retrospect, the Friedman case seems to have been a journalistic opportunity missed. His technical conflict as regulator/shareholder pale besides the spectacle of his heading an agency that ran point on a bailout of such historic proportions. Even if you accept Goldman’s position that there was no “bailout” per se, and few do, no one can dispute that there was a lot of money changing hands, and Friedman was on both sides. And even taking him at his word that the board wasn’t involved in AIG decisions, his seems to be the perfect case to illustrate a compromised regulatory culture on Wall Street in general and the lack of bright lines between Goldman’s interests and the government’s, in particular. In Friedman’s case, all lines were erased. The issue is a culture that allows the traipsing back and forth between public and private universes, overseeing (but not, he says, approving) the bailout and Maiden Lane deals, buying more shares, what have you. Who is fighting for the public? Friedman? No way.

It is breathtaking to think that in this culture, Friedman could be a NY Fed chairman and remain a Goldman director, and that this, according to government conflict rules, was okay. It’s not.

While business journalists sigh and roll their eyes about Matt Taibbi’s hyperbole about Goldman’s role in various bubbles and the bailout, their time is better spent exploring the real cultural, structural, and power-relational problems that plague Wall Street regulation. Clear windows onto the culture, like the Friedman case, don’t open very often.

Dean Starkman Dean Starkman runs The Audit, CJR's business section, and is the author of The Watchdog That Didn't Bark: The Financial Crisis and the Disappearance of Investigative Journalism (Columbia University Press, January 2014).

Follow Dean on Twitter: @deanstarkman.