It is the stock-in-trade Goldman Sachs response to an uncomfortable situation: the damning fraud charges the Securities and Exchange Commission laid against it on Friday misrepresent the facts and are politically motivated. In the Goldman world view, the SEC has decided to charge it with fraud now because President Barack Obama is entering a difficult phase of his plans for a regulatory crackdown on the banks.
The bank feels similarly about the intervention of Britain's Prime Minister – Gordon Brown's deployment of terms such as "moral bankruptcy" should be seen in the context of the election campaign, the bank whispers quietly.
We saw a similar response when a journalist quoted Goldman's Lloyd Blankfein claiming he was doing "God's work". It was a joke, the bank said – poor Lloyd was taken out of context. As for that business with helping Greece to avoid the true scale of its indebted public finances, well, no laws were broken at the time the advice was dispensed to Athens.
The odd thing about Goldman is that it genuinely seems not to understand why it has become such a target for such hatred. Having repaid the Tarp bailout cash it received from the US taxpayer, and made generous donations to charity alongside last year's bonus payments, the bank feels entitled to be left alone.
Even the letter to shareholders penned 10 days ago, in which Goldman finally expressed its thanks to taxpayers for their support, it could not bring itself to admit that as with its rivals, that intervention effectively saved it from oblivion – let alone to apologise for its part in the financial crisis.
The strategy is a curious one. Is the management at Goldman – usually so smart – really so arrogant as to believe that it does not matter what people think of it?
The court of public opinion does not always make its judgements with reference to all the evidence, or even with total fairness. This is not to say, however, that it doesn't matter. Eventually, public outrage becomes too difficult for politicians to ignore – and with so many governments on its client roster, that should worry Goldman.
And what about the rest of the bank's clients? Can Goldman really expect them to continue beating a path to its door when it is accused of letting them down in the way the SEC alleges it has done?
The short answer is no. The damage done to Goldman by the SEC directly will be relatively small, but the erosion of trust caused these charges is potentially ruinous. And Goldman cannot say it did not have it coming.
Will British Airways and the other airlines get the bailout they are have asked for from national governments or the European Union? It's a tough call to make. The banks got themselves into trouble – the credit crunch was no "act of God" – and they got taxpayers' cash. On the other hand, the financial crisis threatened to bring down the global financial system. By contrast, British Airways and Ryanair may have our sympathies – it's not often you say that – but are they really too big to fail?
The closest parallel to what the airlines are now demanding is the scrappage scheme for the motor industry that was introduced in the UK, and elsewhere in Europe, at the height of the recession. This was a straightforward subsidy from taxpayers to an industry that would otherwise have seen greater numbers of failures and job losses.
It will be interesting to hear what the politicians from across the divide think. The issue of industrial interventionism has become a clear dividing line between Labour and the Conservatives during this election campaign. The shadow Business Secretary, Ken Clarke, has ridiculed the way in which his opposite number, Lord Mandelson, favours "grants and subsidies", accusing him of behaving like "a Bourbon monarch [who] went round in his coach throwing out gold coins".
All managements face the risk of situations developing that are beyond their control: ensuring the business is robust enough to withstand such adverse pressures is part of the job. The airlines will say that coping with Iceland's volcanic eruption goes beyond the call of duty. Let's see if they get a sympathetic hearing after the election.
Don't be surprised if Gordon Brown tries to veer off topic during Thursday evening's second round of the battle of the leaders. And if he wants to start talking about economics – rather than foreign affairs, the scheduled theme of this week's leaders' debate – you can take it as a signal he thinks that Friday morning's announcement of first-quarter GDP figures will make for a few positive headlines.
The Conservatives and Liberal Democrats are understood to be cheesed off about the advantage they think Mr Brown has, as a member of the Government, in getting those figures 24 hours in advance. One can understand why, but the political knockabout aside, we should be very careful about getting too hung up on the Office of National Statistics' provisional estimate of economic growth for the first quarter. It is based on very limited data – less than half of the information that is used to come up with the more accurate figures that are produced later on.
Back in January, the announcement that Britain's economy had escaped recession during the final three months of last year by only a whisker, growing just 0.1 per cent, came as quite a shock. Since then, the ONS's estimate of fourth- quarter growth has quadrupled in a series of revisions.
This week's data will be seized upon with far greater interest than usual – and will presumably set the backdrop for the final leaders' debate, which is meant to major on the economy. In a month or so, however, that data may come to be seen as very misleading.
Normally, that wouldn't matter, but if Friday's data takes on too much significance in the election campaign, it would be unfortunate. It's never a good idea to make a decision on the basis of information that is incomplete.
Comments