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Sacks of gold

We had some trepidation when Australian-turned-American press baron Rupert Murdoch bought the Wall Street Journal a couple of years ago.

Murdoch has a well-earned reputation for dumbing down his publications and infecting them with his retrograde political preferences. He most famously transformed the nation’s oldest daily, the New York Post, from a staid liberal icon into a snarling, outrageous tabloid unearthing headless bodies in topless bars.

But we have to admit that Murdoch’s feistiness has injected new life into the WSJ, and his brass-knuckles approach to the political class has enabled the Journal to throw a spotlight on the sleaziest machinations of the current fiscal crisis.

Like the seasoned war correspondents of yore who braved bullets with nothing more than a notepad and a camera, the Journal has been on the front lines of the global economic calamity exposing the scandalous behavior of the nation’s top bank executives.

When New York State Attorney General Andrew Cuomo alerted Congress in January that the Merrill Lynch gang had grabbed an estimated $3.5 billion in federal bailout funds and showered ”bonuses”on the traders who bankrupted the investment bank, the Journal put a rogue’s gallery of Merrill’s biggest money-grubbers on its front page.

Not doubt the WSJ would have followed this up with a directory of the 700 instant millionaires amongst Merrill’s bonus babies. Unfortunately, Cuomo refused to cough up the names produced by Merrill after his subpoena was upheld by a federal judge, despite promising to do so.

The latest fiscal atrocity to appear on WSJ’s front page involves the current chairman of the New York Federal Reserve, Stephen Friedman, who also holds a seat on Goldman Sachs’ Board of Directors.

When a desperate Goldman Sachs converted itself from an investment bank into a Fed-regulated ”bank holding company” in September so it could get in line for billions in federal TARP bailout funds, Mr. Friedman was obligated under federal conflict-of-interest rules to step down as a Goldman director.

Instead, the New York Fed chairman applied for a waiver from the government permitting him to continue to serve two masters. The former New York Fed president, Timothy Geithner, now the U.S. Treasury Secretary, took three months to ”evaluate” this request, then granted the waiver.

Here’s what happened while Mr. Friedman’s waiver was being processed:

– Friedman installed a Goldman Sachs executive as Geithner’s replacement as president of the New York Fed.

– Friedman, who already had significant holdings in Goldman Sachs as a director, purchased an additional 37,000 shares of Goldman Sachs stock, which increased in value by almost $2 million after Goldman received more than $10 billion in federal bailout funds.

The New York Fed has responded to the outrage generated by the WSJ’s scoop by issuing a tepid statement claiming that it couldn’t afford to lose Mr. Friedman’s expertise at such a critical time in the nation’s history.

Haven’t we seen this movie before?

Shortly after Barack Obama named Geithner as his pick to head Treasury, which runs the Internal Revenue Service, Geithner was exposed as a tax cheat. He was nonetheless confirmed as Treasury Secretary by a Congress that decided we couldn’t afford to lose his expertise at such a critical time in the nation’s history.

So we were all treated to the spectacle a few days ago of President Obama trying to keep a straight face while standing next to Timmy the tax cheat as he announced that Treasury is going to crack down on corporate tax cheats who park their profits in Cayman Islands havens.

As Obama himself famously said during the presidential campaign, ENOUGH!

It’s time to take out the garbage, Mr. President. It’s piling up, and it really stinks.

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