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Two noteworthy stories chronicling the hegemonic position of the Goldman Sachs Group appeared last week. The first was a scoop by The Guardian about an internal announcement regarding the record

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Two noteworthy stories chronicling the hegemonic position of the Goldman Sachs Group appeared last week. The first was a scoop by The Guardian about an internal announcement regarding the record bonuses that Goldman will pay at the end of 2009, assuming that the company’s year-end profit projections are borne out. The second piece was a 10-page Rolling Stone spread by Matt Taibbi elucidating Goldman’s central role in every major economic bubble since the dawn of bubble economics.

In the midst of the greatest financial crisis since the Great Depression and with credit markets still frozen and unemployment approaching 10%, where on earth could Goldman be locating such lucrative “profit centers?” It’s been widely reported that at least $7 billion in AIG taxpayer bailout funds have ended up in Goldman’s coffers, so perhaps the most generous enablers of Goldman’s bonus bonanza are you and me.

Another lesser-known donor to the Goldman bonus pool is none other than Harvard University. In an article on the monumental collapse of Harvard’s endowment, Forbes reported that Goldman was on the winning side of the university’s abysmal derivatives positions, many of which were placed by former Harvard Management Company chief Mohamed El-Erian.

Harvard’s interlocks with Goldman Sachs stretch back nearly a century. Paul Sachs, eldest son of company founder Samuel Sachs and himself a Goldman partner, was a legendary figure at Harvard as both a patron and longtime associate director of the university’s Fogg Art Museum in the WWI era.

More recent Goldman connections provide some cause for concern and require deeper investigation. Following El-Erian’s abrupt departure at Harvard Management, Goldman Senior Director and former Vice Chairman Robert Kaplan was named interim head of the fund in what appears to have been a fox-guarding-the-henhouse scenario. Kaplan’s oversight of the endowment at a time when the university was adversely entangled with Goldman raises a plethora of questions about potential conflicts of interest. It is unknown, for example, whether Kaplan sought to unwind Harvard’s bad bets with Goldman or whether they were intensified under his watch. It should also be noted that, if Forbes is correct and Goldman is a signficant Harvard counter-party, Kaplan could personally benefit from Harvard’s payouts to the firm.

Another Goldman tie to the upper ranks of Harvard is the university’s first ever Vice President for Finance Edward Forst, who was global head of Goldman’s investment management division. Shortly after taking the Harvard job in 2007, Forst was called by Henry Paulson to help design the $700 billion TARP bailout, which, to close the circle, helped to make Goldman’s historic bonuses a reality.