Friday, July 03, 2009

Matt Taibbi strikes again: "The Great American Bubble Machine"

Oh, I'm a huge fan of this guy's investigative journalism, this time "on how Goldman Sachs has engineered every major market manipulation since the Great Depression." (Cue emphatically vague, prosaic protests from the PR wing of Goldman Sachs.) Especially as at times he seems like the only one who is effectively doing this: translating our reality of in all but name only criminally-organized economic-apartheid/financier dictatorship to a popular audience, and with proper pathos of indignation. Taibbi may not have been possible without the likes of Chomsky, but he sure does a better job keeping us awake. (Needless to say, part of this work is holding otherwise sympathetic but obviously worn-down, increasingly platitudinous critics-become-automatons to a higher standard, which Taibbi also does pretty well.)

His conclusions are especially disturbing:
The collective message of all of this — the AIG bailout, the swift approval for its bank-holding conversion, the TARP funds — is that when it comes to Goldman Sachs, there isn't a free market at all. The government might let other players on the market die, but it simply will not allow Goldman to fail under any circumstances. Its edge in the market has suddenly become an open declaration of supreme privilege.


Fast-forward to today. It's early June in Washington, D.C. Barack Obama, a popular young politician whose leading private campaign donor was an investment bank called Goldman Sachs — its employees paid some $981,000 to his campaign — sits in the White House. Having seamlessly navigated the political minefield of the bailout era, Goldman is once again back to its old business, scouting out loopholes in a new government-created market with the aid of a new set of alumni occupying key government jobs.

Gone are Hank Paulson and Neel Kashkari; in their place are Treasury chief of staff Mark Patterson and CFTC chief Gary Gensler, both former Goldmanites. (Gensler was the firm's co-head of finance.) And instead of credit derivatives or oil futures or mortgage-backed CDOs, the new game in town, the next bubble, is in carbon credits — a booming trillion- dollar market that barely even exists yet, but will if the Democratic Party that it gave $4,452,585 to in the last election manages to push into existence a groundbreaking new commodities bubble, disguised as an "environmental plan," called cap-and-trade. The new carbon-credit market is a virtual repeat of the commodities-market casino that's been kind to Goldman, except it has one delicious new wrinkle: If the plan goes forward as expected, the rise in prices will be government-mandated. Goldman won't even have to rig the game. It will be rigged in advance.

Update: Strangely, TPM would rather talk about Mark Sanford.
Update II: Even more strangely, Rolling Stone, for whatever reason, apparently neglected to post the article online for over a month, until just a day before the "environmental"/carbon tax/let's make Golman Sachs even richer even more easily/Cap-and-Trade bill passed....

No comments: