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Jul. 7 2009 - 11:26 pm | 598 views | 12 recommendations | 68 comments

On The ‘Everyone Was Doing It’ Excuse

“The [Rolling Stone] article makes a very compelling case against Goldman Sachs, but I think the problems it identifies are pervasive in financial firms and corporate America in general,” says Nell Minow, who is the co-founder of the Corporate Library, a research firm that tracks corporate-governance issues. “We need to launch substantive financial reform rather than weighing the faults of one firm versus another.” Minow’s point is this: spend too much time on Goldman and you miss the fact of how broadly the financial system and the regulations that are supposed to keep profiteers in check failed us. And she’s right.

via Goldman Sachs vs. Rolling Stone: A Wall Street Smackdown – TIME.

It’s been interesting, to say the least, watching the public reaction to my Rolling Stone piece last week. I of course expected that some kind of highly unpleasant response would come my way from Goldman and its allies in the press, but I admit to being surprised a little by the form this response took. Obviously I don’t want to dwell on this business, because it’s beyond boring when someone in my position complains about his critics, but I feel like I have to say something about at least a few of the talking points of the inevitable Goldman counteroffensive, which in various forms (letters sent to me personally, public comments) have reached my desk in the last few days.

The most ludicrous of these, and the one that surprised me the most, is the accusation that my article was anti-Semitic propaganda. The first letter I got on this score I actually mistook for a joke sent to me by one of my friends. Then I got another one which I quickly realized was not a joke at all. “Isn’t it convenient,” it read, “that an Arab-American writer for Rolling Stone looks at Wall Street and picks the most prototypically Jewish firm around to demonize.”

The last time I heard something similar was a few years ago, when Debbie Schlussel, a severely dimwitted Detroit-based right-wing pundit, railed against my supposed Arabness after I wrote an article about the Lebanese population in Dearborn, Michigan. I wrote to her to let her know that I’m actually Irish and Filipino, and not at all an Arab, but never got a response. This time the charge is a little different, as several writers complained that my article was “a rehash of every classic anti-Jewish conspiracy theory” and “a pale copy of the Protocols of the Elders of Zion.”

The evidence for these charges seems to be as follows. One, I used the word “tribe” somewhere near the end of the piece. Two, the term “blood-funnel” was used (one person also hinted that the use of a squid image was somehow anti-Semitic, but I was not entirely clear what was being referred to there). Three, I “singled out” Goldman and failed to level similar charges at “less Jewish firms” (yes, one letter-writer actually used that phrase) like Morgan-Stanley.

A few points in response to this preposterous argument. Firstly I’m going to make a blanket denial and just say that the question of religion was so far outside my thinking while writing this piece that I never even considered it. If this issue had even entered my head so much as once, I probably would have been more careful, and it is remotely possible that I might not then have used a distantly suggestive word like “tribe,” if only to avoid having to answer charges like this. But I didn’t consider it, for the simple reason that it’s completely ridiculous and not at all relevant.

For one thing, while Goldman’s founders a gazillion years ago were apparently Jewish, I seriously doubt that religion plays any role at all in the makeup of the modern Goldman. I don’t have any way of knowing this, but I would be shocked if it weren’t true that a majority of Goldman’s current employees were not Jewish. And whatever the reality is, I don’t care; it’s not a concern of mine and we didn’t make it a concern in the article.

If anything it seems to me that what defines these Wall Street characters is not religion but the absence of it: even a hardened atheist like myself comes away from the experience of reading about the last two decades of Wall Street history shocked by that community’s complete and utter Godlessness and moral insanity. What I’m saying in other words is that if any of these clowns actually had a real religious sensibility, we wouldn’t be in this mess — and that’s coming from someone who believes all religions to be inherently ridiculous. For Goldman now to hide behind the cloak of Jewish victimhood is both more obnoxious and less convincing than Marion Barry wearing a dashiki after the indictment.

Then there is this other argument, the one being bandied about by Time magazine, among others. According to Steven Gandel of Time, the problem with my piece is that it is — get this — too specific. According to the above passage, focusing on Goldman in particular when attempting to explain (in general) the crimes of Wall Street to ordinary readers is somehow a distraction from the “real problem.” To repeat:

…spend too much time on Goldman and you miss the fact of how broadly the financial system and the regulations that are supposed to keep profiteers in check failed us.

I had to read that passage several times to even begin to grasp its ostensible meaning. Apparently this is the best argument that Time could come up with to discredit this article, that the rhetorical technique of using a specific example of a specific bank like Goldman to tell a broader story about Wall Street in general distracts readers from the “more important” issue of how government regulators… failed to stop banks like Goldman! I mean, really, how’s that for circular thinking? This is silly stuff even by Time magazine’s standards.

I’ve been shocked by how many grown adult people seem to have swallowed this argument, that the argument against Goldman’s behavior during the bubbles of recent decades is invalid because “everyone was doing it” — and other banks, like for instance Morgan Stanley, were “just as bad” as Goldman was.

Two things about that. One, it isn’t true, not really. By any reasonable measure Goldman is and has been the baddest guy on the block for a long time. When it comes to government influence, no other Wall Street company even comes close. And while maybe one might have made an argument that other players were more damaging to society before the crisis of last year, there’s simply no question now, after the bailouts and especially after the AIG fiasco, that Goldman now reigns supreme in the area of insider advantage. To pick any other bank to tell the story of the rapidly growing influence of Wall Street on politics and the blurring of public and private roles would be a glaring journalistic oversight, and surely even Goldman’s biggest supporters would admit this.

Two, even if it is true that “everyone else was doing it”: so what? Who cares? To me this response is highly telling. We published a piece accusing Goldman Sachs of systematically ripping off pensioners and other retail investors by sticking them with rafts of toxic mortgages it knew were losers, of looting taxpayer reserves to cover its bad bets made with AIG, of manipulating gas prices to massive detrimental effect, of helping to explode an internet bubble that caused over $5 trillion in wealth to disappear, and numerous other crimes — and the response isn’t “You’re wrong,” or “We didn’t do that shit, not us,” but “Well, Morgan did the same stuff,” and “Why aren’t you writing about Morgan?”

Why didn’t we write about Morgan? Because we didn’t. Because it’s your turn, you assholes. Maybe later someone will tell the story of the other banks, but for now, while most ordinary people are only just learning about the workings of the financial innovation era that blew up in their faces last year, the top dog in that universe is going to be first in line to get the special treatment. That might be inconvenient for Goldman, but it doesn’t make the things I or anyone else say about them untrue.

Normally I don’t care so much when people criticize my work. It goes with the territory. But in this case, the response of a bank like Goldman and Goldman’s supporters is characteristic of the subject matter in a way that is important to point out, even after the fact of publication. These are powerful people who know how to play the public relations game, have all the appropriate contacts, and have a playbook that they follow to discredit their critics. Whether it’s me now or the next guy who takes them on, they’re going to come back with some kind of charge, be it “Everyone was doing it,” or “We’re just smarter than the other guys, you can’t blame us for that,” or “The real culprits are the ineffective regulators,” something.

They’re going to say that and more, but whether it’s this time or the next time, the important thing is to pay attention to what they don’t say. And what they didn’t say about this piece is that it was wrong. They didn’t deny any of it. They said others were just as bad, they said I was a bad guy, they said it was a conspiracy theory. But they didn’t say it was mistaken, and that’s the only thing that matters.


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  1. collapse expand

    “Goldman is and has been the baddest guy on the block… surely even Goldman’s biggest supporters would admit this.”
    They boast about it.

  2. collapse expand

    Henry Paulson is a Christian Scientist.

  3. collapse expand

    Dude Matt you are a rad writer. But, I have to disagree with your conclusion in “bubblemakers,” I don’t think it is good to know the person screwin you over without your consent. If we are all being f’d over and there is nothing we can do, what is the point? Drink vodka, be broken hearted, and scream an explicative when anyone says the byword “democracy.” Maybe, I am missing the point I didn’t read too indepth. I didn’t want to be seen in Borders with a magazine with the jonas brothers on the front. Dude, I think you need to get religion, like Peter Tosh sings, “Downpressor man, Where you gonna run to
    Oh along that day.” Other than that I hold no hope for justice in our lifetimes… Make that a double on the rocks….

  4. collapse expand
    Wes
    Wes

    I may be below everyone to read it, but go check out Megan McArdle’s blog on the atlantic.com. It was written on the 10th, and has the “everyone was doing it” concept all over it.

  5. collapse expand

    I’ve learned more about banking in general, and douchebaggery in finance than I thought possible from your brilliant articles.
    Keep up the good hard work.

  6. collapse expand

    The problem with the article is that it completely mis-characterizes Goldman employees and investment banks in general. You make them out to be incredibly brilliant, evil geniuses that hatch sophisticated, long-term schemes to inflate bubbles, wreck the economy, and get away scot-free and laugh all the way to the bank. In fact, they wrecked the economy because they are dumb.

    These guys don’t think long-term. They are working for bonuses, which are based on the current year’s profits. They see a market going up, they assume it will keep going up forever, and they find ways to dump as much money as possible into the market (this is where they are actually talented: in turning $1 into $1000). while the bubble’s inflating, the profits and bonuses are massive. Of course it’s not sustainable, and when the bubble pops they get taken to the cleaners. They don’t get off without a scrape like the article seems to imply; the losses are staggering. three of the big 5 investment banks don’t even exist anymore. Goldman’s still standing because they were actually less involved in mortgage-backed securities than the others.

    The important point is, none of this is planned. maybe some bankers know the bubble isn’t sustainable, but that’s not part of the equation; only short-term profits matter. They are not evil and sophisticated, just stupid.

  7. collapse expand

    Oh, wah! Didn’t any of these people learn in childhood about the answer to the Everybody’s Doing It excuse? It started out, “If everybody jumped off a bridge, would you?” Hmmm. Maybe you aren’t hearing from, uh, grown-up adult people here, eh? Congratulations on yet another good piece, Mr.Taibbi.

  8. collapse expand

    Love your response to the criticism. I agree, it would have been insane to expect anything less than guns-a-blazing after you took a bite out of such a major firm but using an anti-semetic argument to discredit such a well-researched, brutally honest, and intelligent piece… Really? That’s absurd.

    I guess all I have to say is I actually bought a magazine with The Jonas Brothers on the cover for the sake of reading yet another illuminating piece on the financial crisis; hopefully that counts for something.

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    About Me

    I'm a political reporter for Rolling Stone magazine, a sports columnist for Men's Journal, and I also write books for a Random House imprint called Spiegel and Grau.

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