Is Goldman evil or just doing its job?

NEW YORK (CNNMoney.com) -- The Goldman Sachs Senate hearing is finally over, but people are still chatting about whether Tuesday's verbal dressing down of Lloyd Blankfein and other Goldman executives was justified or a case of overkill.

I argued in yesterday's Buzz that many people didn't care about the latest allegations of fraud against Goldman Sachs (GS, Fortune 500).

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Goldman Sachs: 7 power players

Lloyd Blankfein, Fabrice Tourre and 5 other Goldman Sachs managers appeared on Capitol Hill to defend the company's mortgage market moves.

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It was a provocative claim and many readers e-mailed to tell me that I was wrong to speak for everybody. Thanks for the e-mails and all the Facebook comments. It looks like there is still a lot of anger about how Goldman Sachs and others on Wall Street conducted themselves during the financial crisis.

Anita Volkomer shared the opinion that many of the senators on Tuesday's panel had about whether Goldman really contributes anything of value to the economy.

"The fury about Goldman isn't overdone. If anything, too many in the media are making that claim in defense of the indefensible. Goldman Sachs, and many of its competitors, is no longer about capital raising for businesses. Instead, it has jumped head first into the no-holds-barred world of gambling with synthetic products. It makes its money through trading."

She makes a great point. It is disconcerting that Goldman seems less dependent on businesses like advising companies on mergers and taking companies public.

There is some merit to the argument that Goldman is nothing more than a glorified bookie. I still think that too many politicians are making the mistake of equating short-selling and trading in general as evil though.

Of course, many readers are outraged that Goldman may not just be acting as an intermediary but also seemed to be playing favorites with certain investors. Don Turnbull said the situation stinks.

"Goldman played both sides against the middle. Had they simply made bets that the housing market was going to fall apart, I'd have to say they were shrewd, if somewhat heartless, and applaud their actions as being responsible to their bottom line... Instead, [Goldman] selected bad investments to bundle into larger, even worse investments."

I agree that this doesn't pass what many would call a "smell test." It does seem shady. I still am not sure if it's illegal though. But the point of my column was not about whether Goldman was right or wrong.

Still, some readers think that the SEC and Washington in general have to act tougher to rein in Wall Street. Timothy Lash described himself as a "mad investor" who said companies can't be allowed to bend the rules.

"Hopefully the investigation will be fruitful & wrongdoers will be punished. The question was asked, 'What will the success of the SEC's suit of Goldman Sach's prove?' or what good can come out of that? I believe that it sends a strong message to companies that continue to skirt regulatory compliance and conflicts of interest."

I don't disagree. In fact, on the day the SEC announced their charges, I wrote a column applauding the agency for finally taking some tough action. That said, in the past few weeks, I've grown worried that the fraud allegations have led to many presuming Goldman already guilty.

The Senate hearing Tuesday at times seemed like a Wall Street witch hunt, an excuse to beat up an easy, unsympathetic target. And that's simply not fair.

Some readers shared that assessment. Ed Elanjian pointed out the irony of politicians acting all high and mighty as if they shared no culpability.

"I'm saddened and disappointed that Washington is investing so much attention, time and effort on the search for a demon to blame for a horrendously failed system. While it makes for good political theatre, it distracts us all from issues like the roles that Fannie, Freddie, Ginnie and the FHA played ... There's plenty of blame to go around and as much of it can be traced to Washington as Wall Street during a decade of disastrous ineptitude."

That's a fantastic point. Another reader also said that the blame should not just be lumped on Wall Street. Al Kovacs argued that we all share some responsibility for electing many of the politicians who have proven to be clueless about how to fix the economy and financial system.

"Consider the government America has today. The average American has voted in all these crooks. Not much thought is given to our congressmen and the role of leadership ... The average American is preoccupied by voting for his favorite untalented singer on American Idol."

A sad but probably true point -- although I finally gave up my Idol habit this year. Some people probably are tuning out the Goldman debacle to some extent simply because it is hard to find a reason to care when there are more pressing daily concerns like paying the bills and keeping your job.

But I'd like to wrap up my making an important distinction that I should have yesterday. I was trying to find reasons why people didn't seem to care about Goldman. I did not mean to imply that you shouldn't care.

John Leach summed up the apathy -- and why that's a mistake -- perfectly. He's hopeful that the spotlight on Goldman will finally lead to long overdue changes to how the financial sector is regulated.

"Ever since the Goldman issue broke ... I have had a suspicion that public outrage was far short of the magnitude of the crime. Instead, the federal government ... has borne the brunt of consistent public outrage while big business has not ... Reform ... is exactly what we need. And this is precisely why how the government deals with Goldman Sachs is so important to everybody."

Amen to that. It's clear something has to be done to get Wall Street in line. I just hope that the government can come up with an intelligent plan to do so. Holding marathon hearings only prove that lawmakers are more interested in putting devil's horns on other people than finding actual solutions.

- The opinions expressed in this commentary are solely those of Paul R. La Monica.