The last week of the California governor's race has been a silly game centered around one question: which of these three major candidate is most compromised by the Wall Street investment bank Goldman Sachs? Is it Jerry Brown because his sister works for Goldman? Or Steve Poizner because he borrowed money from the firm during a 2003 race for governor?
The answer: The candidate closest to Goldman is Meg Whitman, a former board member who benefited from special access to lucrative Initial Public Offerings, or IPOs, handled by the Wall Street Firm.
But which candidate has the closest ties to Goldman isn't a particularly important question. The query that Whitman should be asked is this: What role should financial services companies such as Goldman have in the economic recovery?
It's an important question because of concerns that financial services have become too big a part of the American economy -- and thus too big to fail. But Whitman, in her 48-page campaign policy paper, wants financial services to grow in California. She pledges to create 91,000 additional California jobs in financial services as part of her jobs plan, which consists of targeted tax cuts and various deregulatory actions.
Now is the time for reporters to stop dwelling on the past Goldman ties and bore on this plan. Among the questions that should be asked of Whitman: What sorts of credits and regulatory actions is she planning to take to aid the industry and create those jobs?Is it wise to bank on financial services growth? Will those 91,000 new financial services workers be the sort of reckless traders and executives who created the risky financial instruments that wrecked the economy?
