Was the Goldman Sachs Showdown Simply a Distraction Tactic?

This is a rush transcript from "Hannity," April 27, 2010. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: It was Goldman versus the government earlier today on Capitol Hill. Now, take a look at the mob scene that took place just prior to a hearing in which executives from Goldman Sachs defended their company against charges that it defrauded investors back in 2007.

Now, the banking officials were met by a bipartisan barrage of questions from the Senate Investigations Committee during the marathon Q&A session, which by the way, just ended a short time ago.

Now, the most outrageous moment of the day came when the committee's chairman, Michigan Senator Carl Levin, read an expletive-laced Goldman e-mail that was acquired by the government. Listen to this exchange.

(BEGIN VIDEO CLIP)

SEN. CARL LEVIN, D-MICH.: June 22 is the date of this e-mail. "Boy, that Timberwolf was one (EXPLETIVE DELETED) deal." How much of that (EXPLETIVE DELETED) deal did you sell to your clients after June 22, 2007?

DANIEL SPARKS, FORMER HEAD OF GOLDMAN SACHS' MORTGAGE DEPARTMENT: Mr. Chairman, I don't know the answer to that. But the price would have reflected levels that they wanted to invest in.

LEVIN: But they don't know — you didn't tell them you thought it was (EXPLETIVE DELETED) deal.

SPARKS: I didn't say that.

LEVIN: No. Who did? Your people internally. You knew it was a (EXPLETIVE DELETED) deal, and that's what your e-mail showed.

SPARKS: Again, I...

(END VIDEO CLIP)

HANNITY: And here with analysis of the day's events are the host of "Varney and Company" on the Fox Business Network, Stuart Varney. And former White House press secretary, the one and only Dana Perino.

You know, I just wish that we could put congressmen and senators under oath, and then we could start questioning them about the stimulus, about the skateboard parks that they paid for, about the taxpayer money that's spent on studying manure and swine odor.

DANA PERINO, FORMER WHITE HOUSE PRESS SECRETARY: And about how they ignored the Fannie and Freddie issue and never held a hearing. All of a sudden, now they're all concerned. I mean, I felt like today it was like watching a bad episode of "The Office." Where it makes you feel like you want to squirm, except it didn't have any humor.

I think that, also, with Senator Levin, I understand what he was doing, quoting an e-mail, but you don't have to say that. And I really — you don't have to say it on television. In fact, if you said it on television, you'd get fined by the FCC.

HANNITY: Might be.

STUART VARNEY, FOX NEWS BUSINESS ANCHOR: Wasn't it an exercise in distraction? I mean, an exercise in mass distraction, basically.

You focus attention on Wall Street. You say, "It's your fault. You did this." You distract attention from the politicians who really got the ball rolling in the first place. So you have the politicians telling — telling Wall Street, "You're the bad guys. You did this." And ignoring their own role in starting everything off in the first place.

HANNITY: Well, this is my thing. With the utter sanctimony and arrogance they do this. I mean, they — they did this to put them up as a pinata and beat them and knock them down...

VARNEY: For political advantage.

HANNITY: ... for political advantage because they want to get this bill passed.

VARNEY: Right.

HANNITY: And as — as Durbin said, Senator Durbin, the timing couldn't have been any better.

VARNEY: He's right. I mean, it looks like there will be a bill. They're going to get probably one Republican senator to go over with the Democrats and push this bill through. Looks like it is likely to happen.

But go back to the beginning. What is Goldman Sachs — I want to be critical of Wall Street. But what was Goldman Sachs doing dealing in liar loans, trading them, investing in them, selling them in the very first place? What was Goldman Sachs doing here?

PERINO: Here's — here's the thing if you take a step back. If you're in America and you're listening and watching us today, you think, "Well, that sounds totally wrong." The fact that it may have been legal. But that's not how people run their lives, and so this isn't going to help them.

But the other thing that will hurt them is that, for the first time in a long time, people are so engaged in this issue. And they understand even better. So while they try to make it a distraction, I don't think they're going to succeed. And if this bill does get passed, it will partly be because the Republicans continued to force them back to the table to negotiate and are exposing the bad parts of the bill.

HANNITY: Alright. Well, that's important. But they don't want to get to the truth, Stuart. This is what you're getting at. They don't want to get to the truth or the bottom line, because if they do, not only will they be excoriating CEOs of companies. They'll have to excoriate themselves and their own bad policies which created the environment for this to happen.

VARNEY: Look. Just go back not that far and you'll see politicians trying to shoehorn people into houses which they could not afford, into loans which they could never pay back. They received money from the Goldman Sachs of the world.

HANNITY: And government forced banks and financial lending institutions to do this. Why? Because under liberalism and redistribution, every American had the right to a home, whether they can afford it or not.

VARNEY: It was a worthy social goal. Give them that. But then Wall Street jumped onboard: cheap money, easy money, complete lack of regulation about what type of mortgages were put out there. Wall Street made money on this, paid off the politicians with major campaign contributions. So you have the biggest, richest...

PERINO: It wasn't just Wall Street. Remember, it's Fannie Mae and Freddie Mac, that's a really important point. And Fannie Mae and Freddie Mac's not even in this bill. That's an outrage.

HANNITY: Right. It hasn't even been addressed. And all these guys are running Fannie and Freddie made tens of millions of dollars. What, Franklin Raines made $90 million while this was all going bankrupt, and the bubble was created. Right?

VARNEY: You have this huge distraction today. I mean, it made all of the headlines as you browbeat and play class war on Wall Street and distract attention from where the blame should lie in the beginning.

HANNITY: Let me ask you this. What does it mean when Tim Geithner, our Treasury secretary, says, "I've never had a real job?" I'm like, thinking, you know...

PERINO: It probably means he's never going to run for office, because he has a tendency to stick his foot in his mouth.

HANNITY: Barack Obama never had a real job either, you know.

VARNEY: He doesn't inspire confidence. When you look at the man on television, when you look at him speaking as the Treasury secretary of the United States of America.

HANNITY: He really doesn't.

VARNEY: He doesn't.

HANNITY: Now the president has put together this — this debt panel on taxes. Is — this is basically a panel that they're not going to report to the American people until after the election. So I think it's a panel that's going to provide cover for the president to say, "Well, the best minds have studied the issue. We've got to raise taxes on the American people."

PERINO: What drives me crazy is that there are people all across our country, 435 — 535 of them, who were elected to do exactly what this commission is being asked to do. And there needs to be a focusing of the mind and a focusing of attention on this issue.

And it's really hard for people to swallow that all of a sudden they're so concerned about deficits when they just rammed through the health care bill.

HANNITY: Well, the problem is, though, that raising taxes, which is the ultimate recommendation that I think comes out of this, is going to result in lower tax revenue for the government. If they would cut taxes, it would stimulate the economic activity.

VARNEY: That's only if they raise income taxes. If they create a value added tax, the hidden sales tax...

HANNITY: It will increase revenues?

VARNEY: Huge. That is a revenue gusher.

PERINO: Stuart Varney will become the spokesperson against it.

HANNITY: It's a revenue gusher, but doesn't it take money out of the pockets of people that would otherwise be investing and creating jobs and doesn't it stop job growth?

VARNEY: Of course it does. Takes money out of a private economy; gives it to the government.

HANNITY: Net gain or net loss then?

VARNEY: In terms of revenue, it's probably a net gain. Because there's so much money involved.

HANNITY: A gusher.

PERINO: Well, how much does...

VARNEY: I coined the word. It is a gusher. A one percent VAT tax gives you a trillion dollars in revenue in 10 years.

HANNITY: And the average European country is 20 percent.

VARNEY: Fifteen, 20 percent. Can you imagine that?

PERINO: I think you should be the spokesperson against the VAT.

HANNITY: I think he should run the Treasury. That's my idea.

But alright, guys. Good to see you. Thank you.

And you could be the spokesman.

PERINO: No. I graduated.

HANNITY: You have experience at that.

PERINO: I graduated from that job.

HANNITY: OK. That's true. We're glad you're here, by the way.

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