I just got around to read a recent blog post by Justin Fox, who comments on finance for Time, and whose work I admire. In it (here), Justin chides those who criticize Goldman Sachs for its outsize profits, who gripe that they are unseemly in a time of credit and general financial stringency. GS, he argues, makes the money it does because it does what it does (trading, underwriting etc.) better than anyone else.
But here's the thing. TARP and the FDIC "free money facility" and related stimulus/credit loosening initiatives are not supposed to finance that which Goldman does best. They are supposed to free up credit, not bankroll program/proprietary trading and positioning. To get its hands on this taxpayer money, Goldman became a bank - but it does nothing that banks do: it certainly conducts no retail lending business. I admire Goldman for its trading skills; just don't do it with my money.
One other thing: thanks to Henry Paulson, the "anyone else" whom Goldman does what it does better than has been shrunk by around 50%. Seeing one's competition cut in half does wonders for one's pricing and one's profits.