How can you not enjoy an article that starts out like this:
“The first thing you need to know about Goldman Sachs is that it’s everywhere. The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.”
That, according to NYT columnist Frank Rich, is “the most-quoted sentence in financial journalism this year”, and it’s from an article in Rolling Stone, Matt Taibbi’s The Great American Bubble Machine. Matt makes a pretty good case that Goldman Sachs have not only profited enormously from most of the major financial crises since (and including) the crash of 1929 — they were instrumental in creating those crises in the first place. Most obvious instance, of course: the last big meltdown on Wall Street. GS not only have made enormous profits, they’ve also seen three of their four most important competitors destroyed. And the kicker is: almost everyone involved in funneling hundreds of billions of our cash into the GS maw are former top-level employees of that very same “bank”! (See the PS, below, for more on that.)
Better example: Remember when we were paying $4.20 for a gallon of gas last summer? Everyone knew we were being scammed, somehow, but we just couldn’t figure out how. The politicians argued pointlessly over whether we needed more off-shore drilling or more hybrid cars - obviously, oil was so expensive because it was in short supply. The only problem is, the actual numbers show that there was actually slightly more oil available that summer, and slightly less demand! Why, then, the high price for a barrel of that fun stuff? Apparently, in 1991, Goldman Sachs single- (and under-) handedly created a speculative market in oil, something which had previously been prevented by laws created in the 1930s. Remember, petroleum, like most commodities, is a “futures” market. Obviously, we don’t want speculators (ie banks (ie GS)) buying up all the “future” oil and then selling it back to us at twice the price, when all the “bank” actually did was shuffle paperwork around. Do we? Well, that’s exactly what happened! Again, GS was the biggest player and profiteer involved.
To make sure you get the point: last summer, we should have been paying about what we paid this summer for gas: around 2 bucks a gallon. Instead, we paid over 4 dollars per. That extra money we paid went directly to speculators: big Wall Street companies like — you guessed it! Goldman Sachs (and they didn’t even bother to pass “Go!” to get it)!
Ok, how about the so called “Technology Bubble” which popped around the turn of the century, costing the average American Idiot Investor (ie, you and me) perhaps a trillion or more? Again, Goldman Sachs. Used to be, before you could issue stock for the public to buy (ie, ye olde “IPO”), you first had to actually be a company that actually did something, and had to have actually made money for a few years. Well, GS decided to change all that! Tech stocks! It’s the internet, baby, it changes everything!! Too hot, too new-fangled for those fuddy-duddy ideas made up way back in the Thirties, as if they knew anything about financial crisis back then! Like, totally! As Taibbi memorably writes:
“Companies that weren’t much more than potfueled ideas scrawled on napkins by uptoolate bongsmokers were taken public via IPOs, hyped in the media and sold to the public for mega-millions. It was as if banks like Goldman were wrapping ribbons around watermelons, tossing them out 50-story windows and opening the phones for bids. In this game you were a winner only if you took your money out before the melon hit the pavement.”
(Matt does miss out on noting that Letterman had fascinated the nation doing something very similar ten years previously. I wonder if “Stupid Pet Tricks” is somehow equally ironic when we’re aboard the Golden Hindsight…)
Anyways. You must read this article. Herer’s the link:
http://www.rollingstone.com/politics/story/29127316/the_great_american_bubble_machine
PS: If you’re not freaked out enough by that, have a look at another of Mr. Taibbi’s notes, “The Big Takeover”:
http://www.rollingstone.com/politics/story/26793903/the_big_takeover
which starts out like this: “It’s over — we’re officially, royally fucked. No empire can survive being rendered a permanent laughingstock…” I’m tellin’ ya, this guy is a lotta fun to read!
PPS: I want an anchovy to go, and hold the pizza!
