Matt Taibbi vs Goldman Sachs

By Felix Salmon
June 24, 2009

Matt Taibbi’s 12-page screed on Goldman Sachs has appeared on newsstands; Zero Hedge has scans, but I can’t link to the piece itself because Rolling Stone hates the internet. Suffice to say that in the second sentence of the piece Taibbi describes Goldman as “a great vampire squid wrapped around the face of humanity”; later on, he calls it “the planet-eating Death Star of political influence”. He’s also a dab hand at the pen-portrait:

Rubin was the prototypical Goldman banker. He was probably born in a $4,000 suit, he had a face that seemed permanently frozen just short of an apology for being so much smarter than you, and he exuded a Spock-like, emotion-neutral exterior; the only human feeling you could imagine him experiencing was a nighmare about being forced to fly coach.

Taibbi makes the case that it’s not just wheat futures which have been overrun by index speculation, but commodities in general and oil in particular. Indeed, Taibbi puts Goldman, Zelig-like, at the center of no fewer than four speculative bubbles: one in the 1920s in which Goldman-controlled entities ended up losing an astonishing $475 billion in today’s dollars; the tech bubble; the housing bubble; and the oil-price bubble ending in 2008. He calls the US “a gangster state, running on gangster economics”, and is very explicit about exactly who he thinks the gangsters are. (Clue: they paid just $14 million in tax on $2 billion in 2008 profits.)

I don’t agree with all of Taibbi’s article, but I’m surprised at how much of it I do agree with, especially when it comes to the subject of regulatory capture. Taibbi spends no little time looking at Goldman subsidiary J Aron, and the semi-secret letter it was issued by the CFTC in 1991, the existence of which wasn’t even known to Brooksley Born, who was then the chair. The letter allowed Goldman to ramp up its activities in Chicago by orders of magnitude. When Congress asked to see the letter, the CFTC was careful to ask Goldman first if that would be OK.

I can’t, off the top of my head, think of a single government regulation over the past couple of decades which has remotely harmed Goldman Sachs; by contrast, there are many which have done it a world of good. The chances that the Fed, or any other systemic risk regulator, will be able to rein in this powerful organization are probably slim. The best we can hope for, I think, is that Goldman will unilaterally decide to be a force for good in the world, rather than an inflator of bubbles and profiteer in busts.

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Comments
40 comments so far

“The best we can hope for, I think, is that Goldman will unilaterally decide to be a force for good in the world, rather than an inflator of bubbles and profiteer in busts.”

In that case, we’re screwed.

Posted by Bridgie | Report as abusive

“The best we can hope for, I think, is that Goldman will unilaterally decide to be a force for good in the world, rather than an inflator of bubbles and profiteer in busts.”

Goldman is a faceless, soulless company. Blaming “it” won’t help. Start naming names, and THEN we’ll see change.

To paraphrase an old cliche..we can hope in one hand & s*i* in the other to see which one fills up the quickest.

Posted by Griff | Report as abusive

Putting Goldman-traded derivatives, CDS etc on exchanges is a major threat to them, this administration is in the process of it.

They’re a bunch of money grabbers trying to make a cut of financial transactions.

Now Paulson’s AIG bailout to pay the the AIG counter parties while everyone else goes to hell… that’s a little suspicious.

But if they’re so bad, sick ‘em on North Korea, Iran, Mexican “drug enforcement” etc…

Posted by VennData | Report as abusive

Worth noting that Hank Paulson\’s first job out of university was with the Nixon Administration, where he served as one of Ehrlichman\’s team of plumbers in the White House – arranging political dirty tricks, blackmail, illegal wiretaps, etc. Must have been excellent work experience for a rapid rise to the top of Goldman Sachs through unremitting influence peddling at all levels of Washington power structure.

Posted by Well Informed | Report as abusive

GS is too entrenched in DC to get in any trouble, it seems. Even their miraculous 1% tax rate of last year due to “geographic changes” brought no investigation, as I and many others lamented.

GS is just too powerful to mess with. I often wonder about the wisdom of posting anything negative about them (usually do anyway). But I’m what some may refer to as a tinfoil hat enthusiast.

Feature request: could Taibbi look at JP Morgan/Chase next?

This guy clearly didn’t get past the first round of interviews at GS

Posted by Jon | Report as abusive

Barry Ritholz’s Blog, The Big Picture, has uploaded the article. With this and Guardian story from last week, I guess we should just realize that this is Goldman Sachs’ world, and the rest of us our just the janitorial staff.

Posted by Rick Kane | Report as abusive

Nice thought Bridgie. Unfortunately it will take brut force and allot of it to take these criminals down.

Posted by Revolt Now | Report as abusive

Above link posted in frustration at Rolling Stone’s epic internet shitness.

Posted by bert | Report as abusive

For those of you who loathe Thomas Friedman as well, make sure you read Taibbi’s pieces on him as well—laugh out loud hysterical and right on point…

Posted by microcapguru | Report as abusive

This is amazing. And what about the new movie just out: Stock Shock!??! Fantastic!!! Market manipulators watch out!! Stock Shock and Matt Taibbi are here!!

GO MATT!!!!!!! I just read the SEC requested to see a movie about this (see article link) called Stock Shock. Finally!!…taking some proactive action! http://satwaves.com/blog/2009/06/26/sec- investigating-illegal-naked-short-sellin g/

Posted by Denise Hubbard | Report as abusive

The House passes the energy-climate bill setting up bubble #6: Global Warming. GS is licking their chops now. Al Gore, he being involved with a new start up called Generation Investment Management with three GS alums is quoted as saying “an essential first step towards solving the climate crisis.” Great….

Posted by Tim D | Report as abusive

GS and cronies are the source of all evil. Shut it down!
http://www.goldmansachs666.com

Posted by Pen Kohen | Report as abusive

The bottom line is that we, as a nation, are more concerned with the death of Michael Jackson that a possible genocide in Iran.
As a young man, I can’t help but think about the temptation of thinking about taking monetary advantage of the stupidity of the modern generation, more apt to recognize Spencer Pratt than Martin Luther King, Jr.
It’s a sad state of affairs but as the author so nimbly pens, you can’t make this a quick, easy sound-bite, the weapon of politicians… so noone talks about it.

Posted by Ericus Maximus | Report as abusive

These guys make the Taliban look like amateurs. in fact if they could turn a profit they would probably do business with the Taliban. if they haven’t already.

Posted by PJL | Report as abusive

Hang the EVIL Bastards and everyone in their pockets.

Posted by george smith | Report as abusive

Perhaps Rolling Stone doesn’t “hate the internet” and is only waiting til it sells some magazines to pay for the investigative journalism that you are commenting on now. Liken it to a sports broadcast black-out, dude. Matt Taibbi deserves his pay.

Posted by MsInformed | Report as abusive

Goldman…. duh.

Treat names with precious stones and metals as ‘the enemy of man’

Where have we heard that before?

Some things just don’t change in 5000 years. It’s time to rethink our taboos.

Posted by Georgann Marks | Report as abusive

time to see this chosen people for what they are…..

Posted by George | Report as abusive

Pump and Dump has been around forever. The bucket shops of the 30′s comes to mind. It’s all variations on a theme and impossible to control since everyone wants on board. Clearly Congress and other government officials act as enablers along with with their speeches of Free Markets and anti-competitive regulations. Derivatives protect the Dump-side so you make money going up and coming down. Make a market and they will come.

Goldman has positioned themselves well and are untouchable. They probably have a chair warming for Obama. They will make a killing for a long time, buying, selling and betting on air. This will be the biggest boondoggle known to man and surpass tulip bulbs. Too bad the consumers will foot the bill with higher prices.

The Madoff investors are no different, they came with larceny in their hearts which easily made them the Marks, much like the movie The Sting. He doesn’t take fees, you are getting him wholesale. He has a system, don’t ask, don’t tell. Another role for Michael Douglas.

Posted by Ransome | Report as abusive

“Force of good”? Yup. We’re screwed.

Posted by bardmess | Report as abusive

force for good? Yup, we’re screwed.

Posted by bardmess | Report as abusive

BAIL, BAIL, BAIL (the Men of Goldman Sachs)
(Beer, Beer, Beer (Charlie Mochs) Irish drinking song)
WilliamBanzai7

Sing along Laddies and Lassies: http://www.youtube.com/watch?v=U9G-Np1HB 9M

1,2,3 Bail, Bail, Bail

A long time ago, way back in Bailout history,
When the best game in town was was schtupping AIG,
A long came a bank by the name of Goldmen Sachs,
And they invented a wonderful drink, and they made it out of subprime schlock.

Chorus:
Hey! they must have been bailout criminals, subprime sultans and/or PONZI kings,
And for them praise those busted bankers shall always sing;
Look at what they’ve done for us, they’ve filled Uncle Sam up with bailout beer,
Lord, bless those men of Goldman Sachs who invented…
Bailout Beer Beer Beer taxpayer Bail, Bail, Bail…

The Goldman pub, the Wall Street Inn, the AIG black hole in the wall as well
One thing you can be sure of, it’s Hank Paulsen’s bailout beer they sell;
So all you busted bailed out bankers, at eleven o’clock you stop,
For five short seconds, remember the men of Goldman Sachs!

One… two… three… four… five…

Repeat Chorus

A busted hedge, a barrel of toxic asset slop, stir it around with a stick,
Just the type of lubrication to make your networth sink;
Another trillion dollars of TARP wallop will keep alive those bailout hacks,
It’s only eighty cents halpenny a pint, but a trillion more in tax.

One… two… three… four… five…

Hey! they must have been bailout criminals, subprime sultans and/or PONZI kings,
And for them praise those busted bankers shall always sing;
Look at what they’ve done for us, they’ve filled Uncle Sam up with bailout beer,
Lord, bless those men of Goldman Sachs who invented…
Bailout Beer Beer Beer taxpayer Bail, Bail, Bail…

The men of Goldman Sox!

take your blinders off!!! the fed is in it with goldman up to their eyeballs….and they’re hidden in plain sight. what a complete crock.

Posted by glen | Report as abusive

Our best hope is that someone,Elliot Spitzer, gets their teeth into the scumbags from Goldman Sachs.They life to make money and think,and maybe rightfully,that they run the world.Obama seems to work well with them,which points to his lck of integrity.Hillary should have been “the one” insrtead of this weak kneed suck up.Has the primaries been concucted as the election was,she would have won decidedly.

Taibbi’s pieces are all available at lewrockwell.com

Posted by henry slothrop | Report as abusive

Don’t forget that at the end of the Rolling Stone article, Taibbi calls cap-and-trade for what it is: A non-existent market that will be the next bubble. Cap-and-trade is a scam worth trillions.

Posted by Phil | Report as abusive

These parasitic evil trolls (bankers) should be hung or shot on sight. These people are greedy beyond all reasonable limits, power mad and should be put down for the sake of humanity.

Posted by will farrell | Report as abusive

It was excellent reporting by Matt Taibbi – the kind of investigative journalism that is not often seen. Well done Matt and keep up the good work.

Posted by Merril Christie | Report as abusive

goldman sachs = jewish company

Posted by p cohen | Report as abusive

“Don’t purchase items you cant afford and save for a rainy day”. If the American consumer followed that simple saying Goldman or any other investment bank would not have been in a position to gain from last years economic collapse nor any other time in history. http://www.voicedup.com/?p=682

Posted by US consumer | Report as abusive

What are you thinking? The Fed being a systemic risk regulator? They’re in Bed with GS and have paved the way for them to take over the government.

This all started in 1913 with credit manipulation ala the Federal Reserve.

BTW. What is this about GS having “market manipulation” software?

http://www.bloomberg.com/apps/news?pid=2 0601039&sid=aFeyqdzYcizc

Open your eyes people! It is Bastille Day you know.

Posted by MC | Report as abusive

GS become a force for the good. And hell will freeze over, too. This is a soulless entity whose only aim is gigantic profits, even if they are profits taken directly from the taxpayer’s pocket.

Posted by gutterdandy | Report as abusive

I saw nothing in Matt’s article that hasn’t been reported in the mainstream press spoken in the halls of Congress. The collusion between Goldman Sachs and their various associates at Treasury is unholy enough. The laddering of tech stocks is certainly true. The exemption they received on oil futures and the Lehman Brothers issues are a matter of public record. Matt may use some creative writing to describe these people, but the fact or intact. If they are not, the Goldman Sachs sue Rolling Stone for libel – Matt outright accuses them of securities fraud. If they are, the goverment should procecute. Outside of that, all our words and opinions are really just worthless.

One fact for sure. These chareletons just posted the record profits on taxed borrowed from people, many of which no longer have a job or house becaue the action of Goldman Sachs, AIG, et al.

Human spirits are amputated, vaulting careers, and dreams are massacred with the evil practices of the moneymaking schemes of the few. They are Sam Walker, Bernard Ebard (At&T) CitiBank Chiefs, Wachovia head hanchos, Leona Helmsely Bernie Madoff, and now Goldman Sachs.
Read this with eyes of your heart and soul. When a centipede gets into the brain through the ear, and sits on top of the cerebrum (Brain). This predator than pokes all his segments in to the soft tissue of the brain, and wont let it go! Reader, I ask you to edit this article your way, and read it again. You can’t remove the centipede, because it is clinging to the brain. Almighty the God Bless us all, from the ‘jaws of this monster.

Posted by Sardar Saeed Malik | Report as abusive

gangsta is right – about time more people talked about this.

Posted by Sem | Report as abusive
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