The Senate tries to get the bankers to admit they sold America a pile of crap.

The question at the center of Tuesday's Senate hearing on the role of investment banks in the financial crisis: Are Goldman Sachs bankers criminals or merely a big bunch of jerks?

Put another way: Did the employees of Goldman Sachs deliberately mislead investors by failing to disclose that one of the people creating a certain mortgage-backed security was also betting against it, as a new lawsuit by the Securities and Exchange Commission alleges? Or did they simply recommend mortgage-backed securities to investors, then turn around and bet against them—essentially betting against their own investors?

The Permanent Subcommittee on Investigations may have failed to prove the former, but it presented a strong case for the latter.

The hearing pitted senators determined to find wrongdoing—they sifted through a five-pound stack of  internal e-mails, company memos, letters to investors, and financial statements—against Wall Streeters insisting they were just doing their jobs. As a result, the hearing was less about litigating the SEC case than it was about senators highlighting and assigning blame for the causes of the financial crash.

Committee chairman Carl Levin, D-Mich., who, as always, appeared to have stepped right out of The Pickwick Papers, got right to the point in his introductory remarks: "Goldman Sachs didn't just make money. It profited by taking advantage of its clients' reasonable expectation that it would not sell products that it didn't want to succeed, and that there was no conflict of economic interest between the firm and the customers it had pledged to serve." In other words, Goldman has an obligation to be honest with its customers. And part of that obligation is to tell them what Goldman thinks of the investments it's selling.

Goldman Sachs didn't just disagree. The half-dozen current and former employees dragged before the panel, including CEO Lloyd Blankfein, took a position so contrary, it's as if they were speaking a different language. Levin said Goldman was "shorting," or betting against, the housing market. Goldman said it wasn't—it was merely hedging against its bets that the housing market would succeed—and that its "short" was hardly "big." (The shorts just happened to outweigh the longs.) Levin argued that Goldman was misleading its clients by hiding the fact that it thought subprime securities would fail. Blankfein argued that its clients don't care what Goldman thinks of the assets it's selling, even if it were possible to ascertain what all 35,000 Goldman employees "think" of a security. Levin said Goldman has an obligation to disclose how an instrument is created. "I don't believe there's a disclosure obligation," Blankfein said.

That much was clear. Blankfein and company mastered the nonstatement so well they brought to mind Alberto Gonzales circa 2006. Take this exchange between Levin and Daniel Sparks, head of the Goldman Sachs mortgages department, over whether clients betting on the subprime securities should have been informed that Goldman was betting against them (edited for length):

Carl Levin: Should you have told [your customers] you were going short?
Sparks: Mr. Chairman, this is not particular to this specific—
Levin: No, this case. I'm asking in this case …
Sparks: Again, I don't know—
Levin: I know you don't know. My question is, assuming you get short …
Sparks: Again, I'm trying to understand what the question is. …
Levin: Don't you have a duty to disclose adverse interest to your client?
Sparks: The question is about how the firm is positioned, how the desk is positioned? …
Levin: If you have an adverse interest, do you have a responsibility to tell the client?
Sparks: Mr. Chairman I'm just trying to understand …
Levin: No, you understand it. I don't think you want to answer it. …
Sparks: Mr. Chairman I—
Levin: I'm just gonna go on, because you're not gonna answer the question, it's obvious.

Repeat for 10 hours.