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Goldman Sachs and the political battle over aluminum

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With the Senate Banking Committee already holding hearings over Goldman Sachs’ now-infamous aluminum market manipulations, Slate’s Matt Yglesias wonders if there may be a backlash. He notes that the victims are no longer the diffuse and poorly-organized residents of the mythologized “Main Street.” Instead, they are now the big industrial purchasers of aluminum, notably the big beverage companies and automakers. As Yglesias argues:

The key thing here is that while Goldman Sachs is a big company with political clout in the United States, so is MillerCoors. So is Coca-Cola. So are PepsiCo and the Dr Pepper Snapple Group. So is General Motors. When you get a situation where large industrial firms want the federal government to do something that banks don't to do, then the odds of the banks losing get pretty good.
Yglesias has a good point. When resources and clout are substantial on both sides, resources and clout are much less likely to be determinative. When both sides have the money to get in the game, other factors (such as, say, the low public esteem of Goldman Sachs) may turn out to be equally important. Indeed, this could be a fascinating political battle, as business vs. business scraps often are. Who knows how it will play out? What we do know is what the current balance of resources looks like. And the current balance of resources comes down strongly on the side of securities and investment industry. aluminum

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