The Great Debate

Matt Taibbi Is just plain wrong about Goldman Sachs

– Heidi N. Moore is a business writer in New York City. This article originally appeared in The Big Money. The views expressed are her own. –

bigmoneyCan one firm create a bubble? Can one firm create four bubbles?

Maybe, but it’s damn hard to prove. That’s why it’s so unimpressive that a fervent 10,000-word rant by Matt Taibbi in Rolling Stone’s July 9 issue-devoted purely to “Goldman’s big scam”-spent 12 pages on the subject of Goldman Sachs’ “Great American Bubble Machine” but never delivered any plausible proof. The mammoth article disappointingly failed to provide the smoking gun that so many people on Wall Street-who have envied and admired and hated Goldman for much of this decade-would have been delighted to see.

Context and good facts were in short supply in favor of a lively, if incoherent, narrative. As a fellow financial journalist put it: “If you read the article without knowing anything about finance, by the end you would still not know anything about finance-but you would hate Goldman Sachs.”

True. Goldman’s reputation is its own business-I’ve never owned any of its stock and don’t have any friends who work there-but as someone who’s written about Wall Street for a decade, it annoys me to see the public that wasn’t fully educated about the financial crisis before it happened get snookered again by misleading reporting afterwards.

Megan McArdle of the Atlantic apparently feels the same way, having dubbed Taibbi “the Sarah Palin of journalism” and pointing out intelligently that “[i]t’s not that everything he says is wrong, but the bits that are true aren’t interesting, and the bits that are interesting aren’t true. The whole thing dissolves into the kind of conspiracy theory he so ably lampooned in The Great Derangement. The result is something that’s not even wrong. It’s just incoherent.”

Cool, refreshing legislation for Philip Morris

– This article by Paul Smalera originally appeared in The Big Money. The views expressed are his own. –

Indulge me in a thought experiment. Pretend that drinking something called “lethalcoffee” has been found to cause cancer. There are five or six kinds of gross-flavored lethalcoffees that hardly anyone drinks, like chocolate, cherry, banana, and vanilla. But there’s one flavor, mint, that 30 percent of all lethalcoffee drinkers are hooked on. And there’s one particular group of lethalcoffee drinkers—let’s call them investment bankers—who drink mint lethalcoffee like there’s no tomorrow.

Allow 40 years for several million lethalcoffee-related deaths to pile up before the pandemic is taken seriously by the government. (Try to put aside any negative feelings you harbor about investment bankers.) Finally, Congress introduces a Lethalcoffee Safety Act that has a chance of becoming law. Would you imagine that law would:

A) Order the FDA to regulate lethalcoffee but withhold from the agency the power to ban it?
B) Ban every flavor of lethalcoffee except mint, the one most people drink?
C) Make it really hard for people to sell badcoffee, a new but much less hazardous cousin of lethalcoffee?
D) Be co-authored by Starbucks (SBUX)?