Goldman strikes back
The other day, I pointed out an article in Rolling Stone magazine that’s getting a lot of attention. It’s called “The Great American Bubble Machine,” and in it, writer Matt Taibbi goes to town on Goldman Sachs. I quote: “The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity.” Well, Goldman thinks this is hysterical.
One of Goldman’s PR people, Lucas van Praag, called Reuters blogger Felix Salmon to set the record straight:
Taibbi’s article is a compilation of just about every conspiracy theory ever dreamed up about Goldman Sachs, but what real substance is there to support the theories?
We reject the assertion that we are inflators of bubbles and profiteers in busts, and we are painfully conscious of the importance of being a force for good.
This is the way Salmon sums it up:
… you don’t read a Taibbi rant for an evenhanded look at both sides of a complex story. It’s more a forcefully-put case for the prosecution: some of his charges might not stick, but he’ll throw a few chancers in as well for good measure…
And although there’s a strong case to be made that Goldman has failed to capture the legislative branch… I think there’s a pretty compelling case that both the executive branch (home to countless Goldman alumni) and the regulators, like the CFTC, have a pretty strong track record of doing whatever was in the best interests of Goldman Sachs.
Van Praag told me that in the wake of the events of the past year or two, Goldman’s partners have pretty much lost their appetite for going into public service. Maybe that’s for the best. They are generally smart and talented and knowledgeable people, and I daresay that many of them have done a lot of good after leaving the firm and joining government. At the same time, however, we’re supposed to have a government of the people, not a government of multimillionaire Goldman Sachs technocrats. And when you have the latter, you’re inevitably going to end up with a lot of mistrust and conspiracy theories sooner or later, whether they’re well-founded or not.
My initial reaction to the article was similar — it feels like hyperbole, but it’s hard to believe there aren’t sand dunes of truth in it.
By the way, you have to buy Rolling Stone to read the article. I guess the magazine is resisting coming out of the uh, stone age.
- Jun 30, 2009 12:54 PM — Scott Jagow
- 7 comments
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Comments (7)
June 30, 2009 2:05 PM PT
It’s an amazing article. Taibbi is one of our last great journalists. GS has captured all segments of the federal government it needs to advance its agenda. Taibbi asserts that the next bubble GS will take advantage of is the market created by cap-and-trade legislation. One need look no further than the house’s recent bipartisan passage of that legislation to confirm GS’s choke hold on our government; no partisan divide on this one, because the powers that be in congress all report to GS.
June 30, 2009 2:35 PM PT
Salmon sez: “Van Praag told me that in the wake of the events of the past year or two, Goldman’s partners have pretty much lost their appetite for going into public service. Maybe that’s for the best.”
This statement doesn’t jive with:
http://trueslant.com/matttaibbi/2009/06/08/mean-street-it%E2%80%99s-time-to-enshrine-hank-paulson-as-national-hero-deal-journal-wsj/
[…] Paulson got a $200 million tax deferral thanks to an obscure rule that allows executives who join the government to defer taxes on their holdings.
How could you lost an appetite if you could game the system and rewarded for it?
June 30, 2009 6:29 PM PT
When I read the Taibbi piece I thought his use of Goldman’s as the boogy man of capatalism was a bit silly as well. However, that shouldn’t distract from the broader point of the piece that can apply to most large financial companies.
We operate in an economic system which is very far from the ideals of capatalism where risks and rewards are paired. Companies like Goldman and many others have worked out mechanisms which enable them to make money regardless of outcome of their decisions. They have partially decoupled risk and reward. This is not a good thing for the economy as it systematically encourages risk, and if Goldman and other’s aren’t holding the risk, then someone else certainly is, because there is no way to make risk magically go away.
July 3, 2009 1:53 PM PT
Its not just about risk. You have to answer not just who is settled with the risk, but who has the money and where is that money now, because it most certainly is not in our financial system. It seems that our banks get cleaned out on a regular basis, the lute is stashed in foreign banks and the US taxpayer is forced to debt to make the banks whole again and again. If this isn’t a racket, then I don’t know what is. You also have to answer why you didn’t see it first in a mainstream media publication. Could it be that the collusive interests conspiracy nuts weren’t so nutsy after all. As they say, if there is smoke, there is fire.
June 30, 2009 8:52 PM PT
The article is frightening and sobering. Having a company like Goldman pulling the strings in so many huge banks and political positions and using that advantage to pillage to lower and middle classes is unconscionable.
Knowing that this is taking place and doing nothing to stop these people and punish them is unconscionable.
Oh, and by the way, you don’t have to buy Rolling Stone to read the article. Just google The Great American Bubble Machine. It’s plastered all over the internet.
July 1, 2009 8:58 AM PT
Thanks Fred N, I will read it. If it smells like a fish (salmon) it stinks! -J
July 3, 2009 3:49 PM PT
Is Taibbi the last journalist with balls left to confront and expose the parasitic interests for what they are. Where is the main stream media - on the take?