July 03, 2009

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The Great American Bubble Machine : Rolling Stone
From Matt Taibbi's "The Great American Bubble Machine" in Rolling Stone Issue 1082-83.

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.

Any attempt to construct a narrative around all the former Goldmanites in influential positions quickly becomes an absurd and pointless exercise, like trying to make a list of everything. What you need to know is the big picture: If America is circling the drain, Goldman Sachs has found a way to be that drain — an extremely unfortunate loophole in the system of Western democratic capitalism, which never foresaw that in a society governed passively by free markets and free elections, organized greed always defeats disorganized democracy.

They achieve this using the same playbook over and over again. The formula is relatively simple: Goldman positions itself in the middle of a speculative bubble, selling investments they know are crap. Then they hoover up vast sums from the middle and lower floors of society with the aid of a crippled and corrupt state that allows it to rewrite the rules in exchange for the relative pennies the bank throws at political patronage. Finally, when it all goes bust, leaving millions of ordinary citizens broke and starving, they begin the entire process over again, riding in to rescue us all by lending us back our own money at interest, selling themselves as men above greed, just a bunch of really smart guys keeping the wheels greased. They've been pulling this same stunt over and over since the 1920s — and now they're preparing to do it again, creating what may be the biggest and most audacious bubble yet.


1 comment:

Bukko_in_Australia said...

The friend whose house we're staying at in S.F. works for a tax accounting firm whose office is literally across the street from the San Francisco Federal Reserve office. I was reading Taibbi's article, and playing the YouTube clips that were on each page of the online Rolling Stone. This friend, who has personally lost money from her retirement funds due to stockbroker malfeasance that steered her supposedly "safe" money into risky accounts, was mildly interested. However, as Mrs. Bukko and I were hooting and jeering like paranoid conspiracy monkeys at how Taibbi was bringing it on Goldscum, she was mainly looking at us as though we were being slightly unhinged again.

What's it going to take for people to get a clue? This is an intelligent woman who's at the heart of the industry (albeit in a worker bee role) and has personally suffered losses as a result of the meltdown. But she does not have the intellectual curiosity to learn about the root causes. I can't fathom how people would want to be so oblivious.

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