You've turned over another rock to find another example of GS malfeasance, so thanks for the info, but you're wrong about economies in the long term. The fact that GS was backstopped by the public in this case, and that their ownership of Treasury had so much to do with that (now I see why a knucklehead like Geithner was fast-tracked into his current position), will inspire not just GS to keep doing the same thing, but everyone else in the market to emulate them. Next time around, all the amounts will be bigger, maybe even big enough to break the nation, but since everyone at every department and agency will be a puppet of some financial firm, our reaction will be even more corrupt. All because Bush the Lesser didn't have the stones to tell Paulson to go pound sand when he started his high-pressure sales routine. The seeds of future disaster were planted during this pretend disaster.
I've heard all the whining about pension funds and whatnot, but surely they weren't all all-in on GS and its ilk? When the stupid investment banks fail, the big institutional funds might drop 10 or 20%, but life will go on. This is an example of the well-known fact that sometimes securities decrease in value. The services that GS provides, others could provide just as well. The damage that was done to good regulation and fiscal prudence in this nation, will never be fixed.
ps. thanks for resurrecting this thread!