Hard to argue that Goldman has preternatural luck. Oh, Matt Taibbi and that lot point to personal favors amounting to hundreds of billions due to some ‘old boys network.’
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.
Like you wouldn’t help a friend out in a jam?
But Peter Daou is definitely wrong when he blames Palin-mania as distraction for Goldman’s most recent larceny. Daou is pretty bright – when blogs were first rolling out in 2003/04 he twigged onto how the Movement uses institutions, fronts and meme distributors better than almost any Democrat/Progressive. (Compare his insight with a hilarious meeting we had with Reid’s senior staffers (off the record) at about the same time trying to explain the same to them. The looks of incomprehension are still worth a chuckle). Daou got it.
How on earth is Palin a bigger topic of discussion than this [Goldman], courtesy of Les Leopold:
I’m starting to wonder about the mental health of our nation when I read stuff like, “Analysts estimate that [Goldman Sachs] will set aside enough money to pay a total of $18 billion in compensation and benefits this year to its 28,000 employees, or more than $600,000 an employee. Top producers stand to earn millions.” (Update from Reuters: “That puts the average Goldman employee on pace to earn more than $900,000 this year. Chief Executive Lloyd Blankfein, senior officers and star traders will likely receive tens of millions of dollars.”) Are we out of our minds? How can we sit by and let this happen?
In sum, after paying off TARP, Goldman Sachs is still in hock to us for $52.6 billion. No wonder they can pay $18 billion in compensation. Correct that: We’re actually paying the $18 billion. Which brings us back to the problem of holding on to reality. When we bail out an entire sector to the tune of trillions of dollars, eliminate many of the competitors, make money available at near-zero percent interest rates, change accounting rules to make toxic assets appear less toxic for profit and loss purposes, and guarantee everyone’s remaining assets — after we’ve done all that, what does it mean to book a profit? What did Goldman Sachs actually do that was useful for society, after having helped to drive our economy off a cliff? And why aren’t our elected leaders doing something about it?
Great questions. Actually, Palin-mania is intricately tied up with the answer. Let’s lay out the strata for meme circulation. At the broadest level Daou is unquestionably right in his post’s unquoted parts discussing sexism. Sexy, too. Pretty women sell magazine covers and air time to both men and women. When was the last time you saw Roseanne Barr on ‘Cosmo’ offering her ‘hot sex tips to drive *him* wild in bed’? Or any non-tabloid magazine near a grocery store aisle?
One has to laugh when talking about an unspoken truism; women are the harshest critics of other women. Don’t believe it? Then you’ve not spent time around a college sorority. So Sarah doing something – anything – in the media is a guaranteed giant heat signature for AIM-9Ms to target from all directions, Left (what remains of it), Right, and the vast goo in between. It’s a given.
One strata up? We find more specific subsets, like Joe and Josephine the Plumbers that allow their enemies to define their affections for Palin. For whom finance is overly complicated and abstract, like jumping into ‘Lost’ in the middle of season 3. They get that MoDo doesn’t like Sarah. That’s enough. And how they nod to each other while observing that Dowd is still . . . unmarried.
Now we float up towards more interesting layers. Sarah here is one of those endless self-reflecting mirrors with light bulbs in vogue at the same time as the devil’s dandruff and Bad Company posters. A vast totem for vacant ‘Americuh-isms’. She is, after all, Pat Buchanan’s gal. Yet she is also the Neocon’s greatest hope as well. The Neocons could care less about nativism, parades, prayer circles yada, yada, yada as long as they get to wield macht abroad once more. And in the scheme of things? Numerically the Neocons are a single grain of sand on a Florida Panhandle beach.
But Sarah is more than just ‘Amerikuhn’. Still further upwards is another strata. Here we see fierce contention. Both Palin and ‘Goldman’ are crucial avatars representing significant coalitions in relentless political combat. ‘Goldman’, you see, is code for ‘Jewish’ in Pat Buchanan’s world and among his many legions of fellow travelers (you’d be surprised how many there are and *where* they are). ‘Goldman’ is thus a stand in for ‘cosmopolitanism’, ‘international finance’, Davos, immigration, racial dilution and ultimately war (the perfidious Neocons poke up here).
Goldman is a specifically targeted, separate meme from Wall Street in general or mere bailouts, etc. Sarah, otoh, is a svelte club swinging for ‘Come Home America’ nativism, her erratic and aggressively ignorant personality an ip so facto refutation of Bob Rubin’s, et al. condescending smugness. Sarah on this strata is the custom-made (God given) anti-Goldman meme. That she represents ignorance as quintessential Americana contra shadowy elites touches deep wellsprings in the American subconscious. And as with Sham Wow, she also works great for more general anti-TARP, anti-Wall Street and other anti, well . . . anti-anything projections.
Cui bono? How to raise the ‘Goldman’ situation in today’s volatile politics, characterized by victorious Democrat lethargic fecklessness and the defeated’s vitriolic even unhinged rage? Apparently, Obama via Geithner thinks enlarging the Fed’s regulatory purview should do the trick. Nothing to see here. Move along. Move along.
Naked Capitalism noted a month ago:
But the biggest gap is that the US is embarking on a program of reform without having done sufficient diagnosis of where the problems and vulnerabilities lie. By contrast, the securities laws passed in 1933 and 1934 were based on a detailed understanding of the chicanery and follies of the Roaring Twenties, and provided many specific mechanisms to prevent their recurrence. By the time the Bear Stearns crisis hit, it was clear that the financial system was not going to heal quickly, and that the eruptions were symptoms of far deeper problems. Yet every time, the authorities tried patching the patient up and hoping for the best in place of making a real diagnosis.
For instance, one of the assumptions of the current programs is that Something Must Be Done about too-big-to-fail institutions simply because we’ve just had to throw a lot of money at them. That may be a necessary part of any reform program, but is is complete? Doubtful. Bear Stearns would not have been on any list of systemically important institutions (it did not make the grade in the Bank of England’s April 2007 roster of “large complex financial institutions” deemed crucial for credit market intermediation). Yet the concern that it might be a big enough credit default swaps writer to take down a lot of the financial grid along with it led to Fed backstoping of its unwind. LTCM and AIG would not have been on a TBTF list prior to their implosions either.
That suggests that there needs to be not just an institution-based view of the financial markets, but probably also a product-based persepctive and increased attention to system dymanics. For instance, repos are very big source of non-bank funding for the investing community, and there is evidence that suggests that much higher haircuts on repo collateral played a significant role in the contraction of liquidity. Yet there are no official figures on the size of the repo market, and perilous little consideration of how it played into the crisis. As I read them, the proposals would not address this funding source, which some experts estimate at $10 trillion, comparable in size to the total assets of regulated banks (note there may be some double counting in the repo market size estimates, since it probably includes reverse repos).
So now you see the links: a vacuous Palin, a Potemkin financial reform plan and ‘Goldman’ are in fact all of a whole cloth. None really distract from the other. Almost everyone but the American people have a vested interest in this tapestry. To liberals or progressives reading this — where are your priorities? Fixing our financial system? Cap and trade? GM? Stimulus? Son of Stimulus? Some watered down health care ‘reform’? Foreign policy/Iraq/Afghanistan? To say all are priorities is to say you have none — which is where we are today.
Another reason we pray the netroots are able to reform the Democratic Party from either within or without. Soon. Much of our policy bulemia is Obama’s doing, albeit some forced by circumstance. What’s done is done. The Democratic Party nonetheless could still steer priorities. Priorities are governance. The Democratic Party is too enfeebled. It has trouble even existing as political bloat.
Daou’s critique? It’s ultimately to the mirror when he brushes his teeth every morning. And we’d likely agree with him on alot. Like we said, he’s bright.