the sec refuses to go to mark to mark accounting. the fdic refuses to raise the insurance from the current $100,000 limit. Goldman becomes a commercial bank. it needs a cheap deposit base. the government exacerbates a banking crisis by refusing to advocate correct policies as outlined above. result is bank failures goldman picks up the pieces on the cheap.
Paulson was ceo of Goldman in 2004 when the Ibanks got the SEC to lift the 12 to 1 leverage limit. Nice of him to go to Washington to clear up the mess he helped create.