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Apr. 6 2010 - 5:37 pm | 4,991 views | 7 recommendations | 65 comments

Babies and Bathwater

Now there’s an idea. Maybe someone can stop Wall Street from corrupting the politicians by putting the politicians in charge of Wall Street. Find someone from Chicago who can do it. Or, if that doesn’t work, abolishing capitalism will get results so that in the first place there’s no money to corrupt anyone. Either more government or no business. That’s sure to work in the same sense that you can avoid cancer entirely by having all your organs removed.

via Belmont Club » “Stop me before I steal again”.

I think it’s time to place a ban, once and for all, on something I call the “Babies and Bathwater Defense.” I first started to see it last year after pieces written by Zero Hedge, New York’s Joe Hagan and I all went after Goldman, Sachs. The gist of it goes like this: if you criticize a corrupt bank, you must necessarily be advocating an end to the entire system of free enterprise. Asking these banks to adhere to, say, the law is unjustly punitive and just plain wrong — you’re restricting capitalism and throwing the baby out with the bathwater!

This stuff blows my mind. It’s like saying we shouldn’t prosecute ballot-stuffing because the alternatives to Democracy are too horrible to contemplate. You’d have to have a skull full of wilted lettuce to think a belief system like that makes sense. But there are a surprising number of people who cling to the Babies and Bathwater take on financial corruption.

I’m getting a lot of this now with the Jefferson County business. The above writer, an intermittently coherent fellow named Richard Fernandez from a thing called Pajamas Media, wrote the excerpted passage in response to a line in my piece about JP Morgan paying Goldman, Sachs $3 million to back out of the Jefferson County deal. The full quote, which includes in the middle a passage from that “Looting Main St.” piece, reads like this:

So how would one keep the tragedy of Jefferson County from being replayed everywhere?  Taibbi wonders why no one stopped the train wreck from proceeding.

That such a blatant violation of anti-trust laws took place and neither JP Morgan nor Goldman have been prosecuted for it is yet another mystery of the current financial crisis. “This is an open-and-shut case of anti-competitive behavior,” says Taylor, the former regulator.

Now there’s an idea. Maybe someone can stop Wall Street from corrupting the politicians by putting the politicians in charge of Wall Street. Find someone from Chicago who can do it. Or, if that doesn’t work,  abolishing capitalism will get results so that in the first place there’s no money to corrupt anyone.  Either more government or no business. That’s sure to work in the same sense that you can avoid cancer entirely by having all your organs removed.

So according to Fernandez, by wondering aloud why two giant mega-companies were not prosecuted for engaging in blatantly anticapitalist behavior, I’m actually advocating the abolition of capitalism. Where do these people come from?

Even after all the things that went on in the past few years, there are still people who defend the sort of fraud and robbery that went on in Jefferson County. Either that or they try to slap on a new take on the story to make it fit the same old red/blue, left/right narrative and distract people from the point, which is that this kind of corruption is a complex symbiosis of public and private interests that does not fit into the simplistic Fox vs. Air America storyline. It is not a liberal/conservative issue — this is about oligarchy, not partisanship — but there are people who insist on trying to make it into a partisan story.

If you talk about the corruption of a private bank in a place like Jefferson County, they flail their arms and say, “Yeah, they were guilty. But what about the local politicians? What about the EPA? You’re not complaining about the government’s role! You’re a leftist!” And the blame game starts. And if the debate makes it to the ears of some Tea Partier, he sees one side defending “free enterprise” and another seemingly denying that he’s a socialist, and he immediately knows which side to support.

That’s how this subject matter ends up getting buried before the general public can digest it — it gets split up into a right-vs.-left argument and fed into the Crossfire thresher, rendering it meaningless. I know I’ve been harping on this for a while, but it’s just amazing to me that this propaganda technique works even with something as objectively indefensible as the mass thievery that went on in Jefferson County.


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  1. collapse expand

    Seems like the one constant in all of this is greed. That is why I have no faith in the current economic system. Greed is too much of a variable to account for. Until you can start regulating greed, there will always be cases like this until the end of time.

    • collapse expand

      You CAN regulate greed. That’s what FDR’s reforms of the banking industry were, which were dissolved from Reagan onwards (and led to this great recession.) And that’s what the fairer income tax was before Reagan and Bush, and what demanding transparency and law and punishments for breaking them in markets are for.

      In response to another comment. See in context »
  2. collapse expand

    It’s the Wizard of Oz response, aka “Look! A shiny object!” The goal is to misdirect people, yourself included. You are NOT, under any circumstances, to pay attention to the man behind the curtain.

  3. collapse expand

    Mr. Taibbi,

    Mr. Fernandez has a point, although not the point he thinks he does. In a modern US of A where there is only a fraction of manufacturing that there once was and only a tiny portion of the population lives by farming, there is a only a very limit number of profitable investments opportunities out there. This is why Wall Street has gotten into these crooked deals, almost all of the honest ones are gone. There are no steel mills or tractor factories to invest in, no start-up manufacturers to loan money to. All that is left are Ponzi schemes and bubbles – they are the only game in town.

    So Mr. Fernandez is right, take away corrupt practices and you take away the one of the few remaining ways to make big bucks. There is no baby, only bathwater.

    • collapse expand

      It would seem to me that Fernandez has no concept of capitalism.
      So for him to use it as a defense in critiquing Taibbi’s article is impotent, at best.

      Taibbi’s “Looting” piece was a specific identification of objective and manipulative fraud.

      It had NOTHING to do with the broader concept of CAPITALISM.

      It had nothing to do with “manufacturing” or value-added industries whatsoever.

      Perhaps if Fernandez had an introductory understanding or education of Micro-economics, he would comprehend that.

      The fact that Fernandez uses the “Chicago” school as a rhetorical defense (or offense) just proves that.

      This subject matter has NOTHING to do with capitalism, per se, but FRAUD overall…

      And predatory usury…

      Your point about “no start-up manufacturers to loan to” is also off base.

      Just ask LYNN TILTON about that situation.
      She’s been TRYING to get the message out how NO ONE is fronting cash to the Small-cap / Small-business people.

      And yet, Goldman Sachs with Warren Buffett making some off-hand promise to loan $500 Million to tiny America makes the front page?

      (any updates on that most humanitarian effort would be appreciated)

      The BANKS are HOARDING the cash (TARP or otherwise).
      They are not lending, since, like you, they see another crash coming (which I admit is probable).

      Here’s another quote from Fernandez:

      No money for nothing. Well, at least the new sewer system saved the earth. The county probably won’t be hearing from environmentalists for a while. Or maybe not. When the trash starts piling up in the streets, someone’s got to collect it, right? A few more protests, a little more militancy — the money’s in there somewhere. It’s got to be. Oh, did someone mention the money?

      What kind of conclusion is that?
      Does he know how money is created?
      He’s a fucking idiot, more so than ME!!!

      To be frank, I don’t know why Taibbi’s got his panties in a knot over this chump, since it is clear he’s not even standing on two legs (never mind three)

      In response to another comment. See in context »
    • collapse expand

      Mr. Taibbi,

      DavidLosAngeles has a point, although not the point he thinks he does.

      He believes Wall Street is now playing Three-Card Monte with our money because manufacturing and agriculture have gone Houdini on us and disappeared.

      In reality, manufacturing and agriculture are doing just fine, and productivity is up. The difference is that average investors now have access to just about anything they want, short of seeing the sorts of sleazy documents that flushed us in Jefferson County.

      Because the Perennially Elite Investor no longer has a permanent advantage in knowledge, he must create scarcity by establishing instruments that no ordinary rube can understand. Until Penn and Teller show up and tell us how the trick was done.

      Oh — and one of the factors weighing into our house search right now is finding a home with a septic tank, because we don’t want to be stuck with a sewer rate increase beyond our control.

      In response to another comment. See in context »
    • collapse expand

      Great point. Of course, the Anarchists/Monarchists (the name calling might as well swing both ways) will say this is all the Unions’ fault.

      In response to another comment. See in context »
  4. collapse expand

    Well said. That is an infuriating argument. Another BS argument that has been driving me nuts is the “nothing’s perfect” argument that I’ve been getting from my Democrat friends when I criticize Obama and his fraudulent Health Care reform. So I am a perfectionist because I point out the glaring flaws in the bill and the fact that Bushbama did fuck all to get a public option passed? Bullshit. They just don’t want to hear the truth–that there is no substantive difference between Bush and Obama when it comes to policy.

  5. collapse expand


    I’ve got a friend who is an influential attorney in the community, and an outspoken Republican. When Obama was inaugurated, this friend suggested that the Republicans should be the ones who led the efforts to prosecute those responsible for torture. It would take admitting they were wrong, but it would be the right thing to do, and would maybe even win them some political points. Instead, they dug in their heals and continue to support what amounts to a pro-torture agenda. Why? Because if the Democrats hate torture, the Republicans must love it.
    Healthcare is no different. There was very little dialog about what works and what doesn’t, and how best to improve the system. The whole debate was drowned out by the incessant hum of Republican buzz words like “government takeover” and “socialism.” For f@#k’s sake, the term “death panels” still floats around in the minds and mouths of many (the worst of it is that legit concerns about the bill were also drowned out by such nonsense).
    So as infuriating as it might be, we shouldn’t be surprised when a Democrat’s support for financial reform leads to automatic and instantaneous opposition from the Republicans. Admit no mistakes, fight everything.

  6. collapse expand

    Being against antitrust practices is being against capitalism.

    Yeah, right.

    This is called a false equivalency, Matt, which forms the basis for much of today’s public discourse, followed closely by ad hominem attacks.

    When neither of these works, they just make shit up.

  7. collapse expand

    I think with the help of those like our most excellent Mr. Tabbi, America is finally waking up to the realization that there is more than one axis on the political spectrum (Left vs. Right), there is a second: Statist vs. Libertarian.

    • collapse expand

      Ah… no. The fashionable epiphet “statist”, means almost nothing- how could a term that equates Monarchy, Maoism, European Parlimentary Democracy, and Iranian Theocracy make any sense in the real world? The absence of Governance is mere anarchy, in any case. Maybe I’m being unkind, but the Libertarian Party just seems to be a way of being socially liberal, while being financially reactionary. Don’t get me wrong. I love reading ReasonOnline- they make a lot of sense until they stop making sense. But if Libertarians believe that the Untied States Government’s power to regulate commerce is always an opression, well, they’re on the side of the banks.

      In response to another comment. See in context »
      • collapse expand

        Liberal and conservative can mean a whole bunch of different things too. That doesn’t mean they aren’t useful labels. Libertarianism doesn’t stand for the absence of government, just as most liberals aren’t socialists and most conservatives aren’t fascists.

        A discussion about the size of a government and the role it should have in the economy is more important I think, then whether or not abortion is legal. Yet, which issue do you think is a better determinant of whether an American identifies themselves as a Democrat or a Republican? What about being pro-choice makes someone more inclined to banking regulation. Why do pro-choice individuals tend to want lower taxes?

        The two party system has made American politics crazy. There needs to be a multi-dimensional discussion of the issues other than the Left vs. Right meme of the last few decades.

        In response to another comment. See in context »
  8. collapse expand

    Thank you for taking the time to harp on this for us. I can’t explain how much your writing on this stuff has kept me from having a nervous breakdown. Thanks again for taking the piss out of this guy for formulating the most ridiculous apologist crap I’ve seen in a long time.

  9. collapse expand

    The argument of politics being left or right is anachronistic…

    We live in a multi-dimensional world

    At the very least, one should consider political leanings in 2 dimensions, MINIMALLY.
    Whether it be the Nolan Chart or Political Compass.

    An economic scale (X-axis)
    with Collectivism/Communism on the left extreme,
    Neo-Liberalism on the right

    and a Social scale (Y-axis)
    Authoritarian/Fascism on the upper extreme,
    and Libertarian/Anarchy on the opposite

    If you consider political systems over the past 50 years, you would find that most elected governments, in nearly ALL Democratic systems, fall into the North-Eastern quadrant of Authoritarian Neo-Liberalism
    with a progressive movement into the extreme

    It doesn’t matter WHAT party…
    they are all moving in that direction…

    So if you like Mussolini meets Milton Friedman,
    then American politics is the place to be…

    Then again, it is like that almost all over the globe…

  10. collapse expand

    There is a cultural component to this sort of thinking Matt. Take the unfortunate story of Fuzzy Logic. It was invented in USA and cost nothing to adapt except changing your mind. We studiously ignored it. Yet the Japanese turned Fuzzy into a craze–putting fuzzy chips in everything from videocameras to machine tools. The economic benefit to Japan for embracing Fuzzy can literally be measured in the Trillions of yen.

    Bart Kosko, the guy who formulated the mathematical proofs for why Fuzzy worked claimed the USA could not embrace Fuzzy because if our attachment to Aristotle’s logic which tells us that a statement must be true or false. And if you believe that, then you logically must conclude that if you punish one bank, you must hate all private banking. Aristotle commanded we think this way–and it’s killing us.

  11. collapse expand

    If Goldman Sachs are crooks, why did Bush-obama

    give them billions in taxpayer cash? is everyone

    a crook?

  12. collapse expand

    So, every single example in your story was a right leaning media outlet or politician (real or imagined) either exaggerating or trying to turn the issue of bank regulation into an issue of free enterprise vs. tyranny. And your response was – a pox on both their houses for turning everything into a partisan debate before the public can digest it? Mr. Taibbi, I love your writing. But, it is just true that there is one party in this country that is against banking regulation in any form and one that is favor of, probably insufficient, banking reform. It is not accurate to say that this is an area where the two parties are equally complicit. I feel that, especially over the last few months, you have been going out of your way to create such false equivalencies because you are angry with and don’t want to be called a tool of the left and you didn’t like the health care bill. Fair enough, but this is a little too much. At least provide an example of a Democrat or Democratic leaning media outlet that is turning this into a partisan issue before you proclaim that both sides are doing so and are not addressing the merits of the issue. I agree that both sides are probably complicit in helping out the banks, but only one side is openly advocating for continuing to do so, and that is the right.

  13. collapse expand

    That’s exactly why these clowns make the baby/bathwater argument, because they’re defending the indefensible. It’s perfectly synonymous with saying “liberals hate America”. It’s all or nothing. When the abu gharab torture scandal broke it seemed an air-tight case of indefensible torture and abuse by US troops, right? Wrong. That was the America-hating media that put those pictures out. Why? Because they hate America.

    I’m convinced at this point that you could post a legitimate video on YouTube of George W. Bush fucking the dead bones of Betsey Ross and the conservatives would spin it as a patriotic act. Liberals who disagree would be painted as America-hating socialists. End-of-story.

  14. collapse expand

    Perhaps the best portrayal of the baby and bathwater defense was by the character Otter in the movie “Animal House”


    “Can you really hold an entire fraternity responsible for the behavior of a few sick and perverted individuals? …Then isn’t this an indictment on our entire American way of life?”

  15. collapse expand

    And that is how they want it. They depend on the coarse manipulation of public sentiment and apparently it works.

    But don’t listen to me. I’m clearly a Marxist Saddam loving terrorist communist.

  16. collapse expand

    The tune that came immediately to mind while reading your piece is Sonny’s & Cher’s ‘The Beat Goes On’.

    Believe me Matt, ‘those’ people don’t ever change. I’ve lived among them for decades. Truly the only way to live with them is to live without them. Or at least to live with fewer of them.

    It’s time the states break up into smaller federations. New England needs to seek an amicable divorce, via the constitution. Let it be the first to lead the way. It would be necessary to pass and ratify an amendment which annuls the union of the New England states and the rest of the United States and calls for a process to resolve a financial separation among other concerns.

    New England can then set up a government based on proportional representation to avoid the two party polarization which our current electoral process and legislative composition renders.

    Think of all the New England families whose loved ones would still be with them had New England not been sucked into the personal war of King George II.


  17. collapse expand

    Oh, I forgot to add:

    … who’s bent on destroying the United States, Israel, the free-markets, and the sanctity of the church. Not to mention I intend to sap and impurify all conservatives’ precious bodily fluids, the later of course being by far the most fun.

  18. collapse expand

    I feel your frustration. In comment to your last sentence, propaganda works because people are just trying to cling to something – anything to help them understand what has happened and what is still going on. It can be so misguided and unfortunate – for a total lack of a better word.

    We are all at various degrees of understanding of these issues – and yes, stupidity does run rampant as does ignorance that if you are speaking out on one issue it MUST mean you are for the polar opposite. It seems like just as soon as you get a grasp on one issue regarding economics, Wall Street,the schemes, the fraud and who was involved etc. the story deepens or changes into something different or something else is uncovered and you are back to being in the dark again or just dumbfounded.

    I feel like ( as a common citizen) this whole thing – everything – is like an earth quake. Yes, it has been building for years as earth quakes do, even though they seem sudden and unexpected. Like most citizens I knew nothing of this financial crisis before it hit. One night it was as if hell was unleashed. I was thrown out of bed by this event everything in an upheaval and I ran out in the street along with everyone else. I was in the dark, I didn’t really have a sense of what had happened or how bad it was and certainly I did not know what would happen next. In a daze people on the left are screaming and telling me this is what has happened and people on my right telling me something different…I either follow along with one of those groups in panic or stand still until I can get my head around what is going on and get enough information to make my own decision. There is continual chaos and confusion distracting me as I try to follow and understand why I am now never going to be able to retire and that I paid someone ( unknowingly) to rob me. Talk about mind blowing!
    I know this sounds child like and I hate the fact that I feel like I am always a day late and a dollar short when it comes to these issues. Propaganda unfortunately works because of anger and ignorance and panic – and then there are some of us who are still anesthetized trying to figure out what to do now with the information we have, not to mention all the new information still breaking.

    Has the ground even stopped shaking in Jefferson County?

    I watched your Rolling Stone piece online (way back) where you demonstrated Short Selling. At the end of watching it I felt two things: 1) Oh so THAT is what that means and that is and how it works! 2) Embarrassed that you had to break it down and talk to me like that ( with a white board and drawings) so I would understand it. BUT I do not think I would have understood it otherwise, and I thank you for taking the time to do so, in that way – it was also entertaining which made something heavy feel light.

  19. collapse expand

    The sad thing is, and this is true, is I actually find myself worrying that the NSA/CIA/FBI will see this attempt at humor:

    “But don’t listen to me. I’m clearly a Marxist Saddam loving terrorist communist.”


    “… who’s bent on destroying the United States, Israel, the free-markets, and the sanctity of the church. Not to mention I intend to sap and impurify all conservatives’ precious bodily fluids”

    and they’ll actually take me seriously and I’ll at a minimum end up on the “No Fly” list (which in turn would be inconvenient, if nothing else, since I’m flying tomorrow).

    Dear NSA/CIA/FBI guys:

    It was a joke. I love America. I hate terrorists. My sister dated Saddam in high school and I hated him – his mustache itched. Communism failed. Marxism is dead.

    I do however want to sap and impurify the precious bodily fluids of conservatives though. Sorry, it’s just too tantalizing.

  20. collapse expand

    The ‘babies and bathwater’ defence against any particular argument is utterly reflexive for most politicians, especially if they are defending policy or public statement.

    In Australia right now the government is planning to implement an internet filter to blacklist certain sites that are deemed too offensive to be viewed. If you ask why they are doing this, they claim that it is to prevent people from accessing child pornography and torture or rape porn.

    If you then say ‘well, it won’t work because of ‘, or ‘ that’s fine but why does the blacklist include sites containing regular old gay porn?’ or any other reasonable question, the only reply will always be:

    ‘…so you are against protecting children from molesters then?’

    It’s reflexive for most politicians (or any other profession populated mostly by habitual liars and thieves) to do this kind of thing, without even thinking about it. It’s the easiest thing to do, and despite being equally easy to argue against, the bulk of the voting populace seem all too eager to agree with it.

    This phenomena has been at the forefront of every anti-obama campaign so far, and it likely to only become more widely used as people’s critical faculties decline year in, year out.

    • collapse expand

      Yeah, and the baby and bathwater defense is hardly exclusive to anti-Obama forces.

      Remember early last year around the time the Obama administration had finished slitting the throat of the public option or Medicare buy-in and people (liberals mostly) had clearly caught onto the health care bill game – to pass a reform bill in name only that would now officially not even take a step in the right direction of public involvement in health care (as opposed to every other country in the developed world who does to better health care results).

      The blowback from liberals was serious enough that Obama went out there and threatened that if liberals killed this health care bill (guffaw) the sky would fall, “If you care about our deficit, you HAVE to be for this health bill”, he said in so many words, even though he’d carefully removed the parts of it that could actually get at fixing the problem in order not to upset the insurance industry.

      I look forward to the November version of this argument: “Vote Democrat, or we’ll shoot this puppy.”

      In response to another comment. See in context »
  21. collapse expand

    By now, given all that’s happened on Wall Street and, as a result, to the country, a sensible person would run screaming in the opposite direction at the first mention of “free enterprise,” because in this country, particularly, that means a license to steal.

    Which is the point of the Fernandez obfuscation and misdirection–it’s propaganda in favor of theft. Either/or straw men are the overripe specialty of the right wing–always have been and always will be–because the technique works on the unsophisticated.

    American business owes much more of its character to the snake-oil salesman than to the humble shopkeeper, and it’s only in times of enormous economic stress that ordinary people start to believe that it’s one grand con game. The propaganda’s necessary to head that sort of thinking off at the pass, lest the public gets tired of guessing who’s pulling the levers behind the curtain and decide to just kill the motherfucker….

  22. collapse expand

    As many posters have noted, politicians use a “baby and the bathwater” defense as easily as one would say “hello.” If they can’t win a debate, then political posturing will do, and at least most people can understand a good old baby/bathwater analogy; it’s so much easier to comprehend than nuance.

    exkiodexian has the other important point: if you aren’t with us, you must be agin’ us: you hate America! Why oh why do you hate our great land??

    This is the nefarious side of the same type of distraction made fun of in the movie “Up”: Dug (Doug?) will be carrying on a conversation of varied importance, when all the sudden “Squirrel!” and that’s the end of that.

    In the long run you personally don’t need to worry about people like Fernandez, but our country needs to be wary of them since they block progress at every turn. There are a lot of “babies” out there that need to be in jail for their actions. The bathwater will be that much cleaner for their removal. The Wall Street dirty dealers need to be thinned from the herd, and so what if the remaining herd is small? As long as the herd is strong, the re-building effort will pay out big benefits.

  23. collapse expand

    It is not a liberal/conservative issue — this is about oligarchy, not partisanship — but there are people who insist on trying to make it into a partisan story.

    If it’s about oligarchy, it IS a partisan story.

  24. collapse expand

    i didn’t think anyone, most of all you, Taibbi, took the ‘babies and bathwater defense’ seriously. it’s just a rhetorical tactic — not meaningful in any sense.

    so, i’m not sure what i’m missing here.

    to believe that someone was even attempting to be serious, you’d have to believe they would actually put regular people above their party, or ‘the elite’, their publication, or whoever it is they’re paid to represent/defend.

    Pajamas Media?

    i do wish there were principled people who we could actually argue with, but we’re not interested in the same things. you think Pajamas Media actually wants to fix things, but they just want to make sure inequality continues to rise, the rich get richer, etc., and they aim to do this by making sure the conversation is never productive — making sure it always gets pushed into the Left vs. Right thing.

    i’m open to _any_ evidence that suggests that Pajamas Media is to be taken seriously or wants to actually solve problems for real/ordinary Americans.

  25. collapse expand

    “Where do these people come from?”

    Honestly sir, I’m not exactly sure where they come from, but I know they became emboldened and more widespread just a handful of years ago when it became the norm to call people who were questioning the justification for bombing a country that did nothing to us even further back into the Stone Age than they already were “unpatriotic” because no evidence was presented for such a provocation. By their “logic” if you had the gaul to ask where the WMD’s were, you were siding with the terrorists that attacked us… that were not even from the country we were declaring war on. When that kind of BS can run rampant for half a decade, and we bore witness to something like Living Wills being turned into “Death Panels” just this past year, should it really come as a surprise that they taking it to this subject matter now?

  26. collapse expand

    Where do they come from? They come from the verge of retirement age.

    Lots of Boomers on the precipice of Medicare see the complete corruption of many critical institutions and simply cannot imagine having to remake them. First, it indicts them personally, since these are institutions shaped by members of their own generation. Second, they NEED these institutions now more than ever, and rightly can’t imagine Generation X and Y having the necessary force to remake banking, business, government, and healthcare in time for their retirements.

    That is the basis of the logic of protecting institutions at all costs – if you start prosecuting their abuses, they might disappear altogether, an unimaginable fate. So, better corrupt and useless authority figures than none at all.

  27. collapse expand

    Thanks to davidlosangeles for drawing attention to the rot of hyper-capitalism….

    We have become a nation of capitalistic derivative gamblers pushing paper money after paper paper…

    For me this important for two reasons related to babies & Bathwater…. First, there is a tremendous embedded belief in disposability in this country: people, things, families, companies, institutions; repair is less preferred than starting over… this type of thinking is a major part of the consumptive mentality in this country (little patience to stay with a problem, analyze and repair it); This becomes a major problem in crisis when the essential elements of fixing our problems are also bound and jettisoned into trash as well…. where the solution is intermingled with problem.

    A second issue for me lies with risk; as the gambling mentality of the financial services sector reigns over us & GDP, it is important to take heed to Naomi Klein’s work about how people are so much more easily manipulated when they are in shock (financial, physical, states of unpreparedness); this is the time when decision get made….

    Hence, babies become an analogy for regression of thought, role and resistance… we become more pliable and reliant on the people who are running the show like Goldman Sachs…. our regression is one of the reasons why most of our systems have been captured without real public dialogue… the bathwater is the residue that is left over after these decisions get made…..

  28. collapse expand

    Sometimes I don’t get it why such things still exist? If for some reason the goverment can’t make things right, they have to be replaced by people who have the power to do just that.
    Goverment people should investigate things that happen in Jefferson County and make it straight again.

  29. collapse expand

    I want to be clear that I have been following Matt Taibbi’s expose’s from the start, and I have regularly forwarded them to many of my friends and associates. Matt has been doing the job that none of the more lofty “investigative journalists” in the MSM have been willing to do. I

    Unfortunately, I found this article to be by far the most disapointing of the series. It wasn’t for what was written, it was for what was left out. It was as if you told 1/2 the story and then edited out the most important pieces for reasons that I’m not sure of. This is what I think Richard Fernandez was hinting at in a sarcastic, offhand way. He wasn’t saying that what GS and JPM did was justified, but rather, how come leave out all the political actors who aided and abetted this scheme? Why edit a major player, Al LaPierre, out of the story completely?

    Well I have no idea as to motive, but Matt isn’t constrained for space and hasn’t shown a need to shy away from sacred cows before. I can’t know if he’s trying to edit his story to protect an ideology, but I do know that this information would have greatly added to the story and greatly added to his readers understanding of just what went on in Jefferson County:

    The only time any political party is mentioned is for a case in Illinois involving a Republican. The word ‘Democrat’ does not appear anywhere in the article. Larry Langford, the individual most responsible for all of this, is a Democrat. Bill Blount is a former AL Democratic Party chairman. Al LaPierre, the major player not mentioned in the article, is a former executive director of the AL Democratic Party.

    Why was this information so toxic to Matt’s case that it had to be hidden? This is a black mark against what otherwise has been a very fine series.

    • collapse expand

      This is exactly what I’m talking about. The piece is full up and down with references to corrupt Democratic politicians, from Langford to Blount to Rod Blagojevich to Bill Richardson. And the main villain in the article, JP Morgan, is a Democratic-Party friendly organization whose chief, Jamie Dimon, is on the short list to be Obama’s next Treasury secretary. The only reason I even mentioned the Illinois bagman Robert Kjellander’s party affiliation was to show that this phenomenon is partisan-blind — here you had a Republican taking graft for a Democratic governor. Moreover I spent most of last year whaling on the Democrats for their ties to Wall Street. I even wrote a 10,000 word piece specifically on that subject. And now supposedly I’m shilling for the Democrats?

      I’m not bringing this up to be defensive, I’m just pointing out, again, that no matter how hard you try to present this as a non-partisan issue, someone will try to make it into one.

      In response to another comment. See in context »
      • collapse expand

        Wws102 fully deserved that.

        In response to another comment. See in context »
      • collapse expand

        It’s okay to be defensive.

        There was nothing in your blog that screamed partisanship. No disrespect to the commenter, but it struck me as if he read the piece through partisan glasses.

        If you are not partisan by nature, then you don’t need to be worried about being “balanced”. Just go after the creeps where ever they may be and whoever they may be and whenever the passion moves you.


        In response to another comment. See in context »
      • collapse expand

        I do hope you realize the high regard I hold for your entire financial series. Your piece on the takedown of Lehman was brilliant, and no one else that I’ve seen even got close to the depth and skill of your analysis.

        *Of course* Wall Street screwed over Jefferson Parish, and *of course* I would like to see them punished for what they did. But that, to me, seems to be only the setup for the real story here, the preliminary step that leads the way to exposing the real game.

        What I see as the real issue is that there is now what might as well be called a ruling class, made up not only of Wall Street financial manipulators but also the Political class of both parties. The two are so completely intertwined that it is virtually impossible to separate them anymore – just look at how intertwined Goldman Sachs is with every level of our government today. (and I know you have) The Jefferson County fiasco happened because the Financiers *And* the leading Political leaders conspired with each other to knowingly defraud and steal from the citizens of Birmingham. Sure, go after the Wall Street players, but if you leave their political allies in place the same thing is going to happen over and over again. ALL of them have got to be rooted out of power!

        This interlocking web of both financial and political corruption is at work in the Jefferson County story in a way that is more clear and easy to follow than in almost any other case in this country. The corruption convictions have barely scratched the surface, since it’s a safe bet that the payoffs went far above the level of sad sack Langford. Call them all out! Don’t let any of them walk away free and clear!

        In response to another comment. See in context »
  30. collapse expand

    I agree, babies/bathwater is one of many techniques to distract people from actual issues and get them talking about semantics. Another I have noticed is taking an innocuous statement and spinning a conspiracy around it. The people who use it come from the Right, largely Fox. The people who fall for it? I fear they come from our deteriorating educational system in which people are not taught to think. But don’t be afraid of calling it out too often. Repetition is also a very effective technique. Keep shaking people. It’s never too late to wake up from a media-induced stupor.

    Oligarchy is and is not a partisan issue. Oligarchies are supported primarily by conservatives, but not all people who call themselves conservatives support oligarchies. One of the purposes of noise generally and demonizing in particular is divide and conquer: to prevent ordinary people on left and right from realizing they have more in common than they think.

    In the financial sector, manufacturing vs. service investing is a false dichotomy. The real divide is growth investing vs betting. Growth investing is stocks and bonds–things that give working capital to business. Betting is anything else, from securitized mortgages to (unless you are a farmer or developer) commodities.

    Financial reform has got to put a “stop loss” limit on betting as a percentage of the market to keep investment dollars working and prevent the market from blowing up.

    Bubbles are not natural. They occur when too much money flows away from prudent growth investments and into high-risk things like X tranches, junk bonds, and stock in companies with no assets. Stop the imbalance and you stop the biggest internal threat to the economy.

    Of course Jamie Dimon is going to suggest that bubbles are natural phenomena. Wall Street makes more money when the market is volatile, when bubbles cause swooping peaks and crashes. Wall Street can’t create bubbles, but after a few successful bubbles, it now knows how to lay the seed and fertilizer to make one grow.

    In contrast, ordinary investors make more money when the market is less volatile–one of those counterintuitive math things.

    A consumer protection agency is a nice thought for bank and credit fraud, but it won’t catch major market crashes because it’s staffed by humans, and humans don’t see major market crashes coming.

    Trying to limit the development of harmful individual instruments is like trying to catch a waterfall at the bottom of the cliff. You just can’t get your arms around it all. To stop the waterfall, you need to build a barrier at the top, before the risk topples over the edge and takes the rest of us with it.

  31. collapse expand

    Anyone looking for an in depth article on the “there is no baby, only bathwater” theme can check out this piece on monopoly-finance.


  32. collapse expand

    Prosecute ‘em ALL.

    Pols, bankers, raters, regulators. Orange jumpsuits for one and all.

    And anyone who sticks up for them? Caning. Vigorous and furious caning.

  33. collapse expand

    hi, just went thru the join-up so i could extend a compliment and offer a tip. Compliment is to Mr. Taibbi, for breaking new ground with a whole new audience –X’rs and younger, without any doubt whatsoever sorely in need of some level-truth reportage on the financial mess. The series has been great and has done an enormous public service which is, unlike so much of the so-called of same, actually important and vital.

    Related, Mr. Taibbi is a riot on the Imus Show and has somehow tripped the magic fantastic on gaining the old cowboy’s affectionate respect.

    The tip comes from a longtime Belmont Club fan, me: Some of you guys n gals in the comments, as well as Mr. Taibbi himself, are badly misreading Mr. Fernandez’ piece. He’s writing ‘in voice’, illustrating for critique a few of the currently rampant mal-thought patterns that here on this site are being likewise criticized –and are here being mistakenly ascribed (at least once inexplicably belligerently) to author himself personally.

    While i don’t ‘do’ mens rea, and not to overgild what was for Mr. Fernandez only an ordinary effort; the word is ’satire’ –think “A Modest Proposal” –a mode which he slips in and out of often in his stylistically highly-varient several-weekly essays.

    –anyhoo, he’s no yahoo blog goofoff, he writes from Australia, and pressed will admit to being a Harvard man, f’r cryin’ out loud (Public Policy iirc), a Filipino who, if I may be forgiven for embarrassing the guy, as a younger man actually put his life on the line where his keyboard now is, as a soldier in the so-called People Power Revolution which unseated Marcos and brought to power if not the assassinated Benigno Aquino at least his beloved Mrs.

    For most of “The Belmont Club” existence, until his readers finally succeeded in cajoling him into revealing his identity, he wrote under the name “Wretchard the Cat” –hardly the art of a celebrity-seeker or self-promoter (i say this as a friendly heads-up against the whiff of that accusation in the comments here).

    IOW, he comes from about the same place as Matt Taibbi –a sort of renegade who speaks up for the interests of sanity and decency –and us common folk.

    Well, that’s what i wanted to enter in the record –so, thanks, folks, for listening!

    Buddy Larsen
    Dripping Springs, Texas

  34. collapse expand

    A better question is why you are still defending capitalism.

    Man lives through neoliberal Russia, watches millions die like flies while coffers are raided by corporate interests while for-profit mass media turns a blind eye. Man moves to America, writes a half-dozen articles about hundreds of billions in corruption in Iraq, a few about endemic corruption in NYC, a few about the United States government being completely bought off by lobbyists, two dozen about the rotten-to-the-core nature of the financial industry. In every event declares capitalism a salvageable thing, betrayed by bad apples.

    • collapse expand

      Hear, hear!

      Wall Street is simply fulfilling superbly, efficiently, an imperative of capitalism: profits to the owners of (financial) capital. If Wall Street (the City, etc.) rigs the regulations, flouts the law, dupes the gullible, robs little old ladies, straitjackets the government and conspires globally, it is doing exactly what it should be doing; it is fulfilling its entire raison d’être.

      If working for a profit is a good thing, then working for a bigger profit is even better. And working at making the whole profit-producing system more streamlined and efficient is the best thing. And here we are.

      Michael Moore asks a good question: Is it possible to regulate capitalism? Ancillary questions arise: Can profit-making be controlled? Is it feasible to control the motivation/incentive to make profits?

      I don’t know what Richard Fernandez intended to discuss, but this post got me thinking about the present and future state of our good, old capitalism.

      In response to another comment. See in context »
  35. collapse expand

    Well, MAYBE not a left/right issue, but troll the murky waters of Wall St., JP Morgan, Goldman Sachs et al, and in this story a safe bet the local politicians in ‘bama and find one, ONE Democrat. Sayin’.

  36. collapse expand

    I’m in total agreement. You often hear people talk about educating the voting public when what they really mean is getting the public to vote like they want them to. I’d like to see the public truly educated, so they can instantly recognize the “Babies and Bathwater Defense” as well as all the other tricks and logical fallacies we are exposed to on a daily basis.

    About Fernandez’s piece, if it was satire, the clues must have been in some other piece he wrote because I couldn’t find them in that one.

    You wrote, “this is about oligarchy, not partisanship — but there are people who insist on trying to make it into a partisan story.” It’s certainly advantageous to the oligarchy to frame everything as politcially partisan and have a battle raging where no matter which side prevails, they win.

    It is disappointing to see so many commenters, despite the points you made, still fall into the standard Democrats vs. Republicans rhetoric. I guess all you can do is plant a seed and hope one day they look into the idea of an oligarchy or power elite on their own. There are hundreds of corporate boards of directors that are “bipartisan” politically — yet fully united to screw shareholders and employees to enrich themselves.

  37. collapse expand

    Sorry i wasn’t more clear. Of the maybe thirty paragraphs in the Belmont essay, about half of them quotes from the Taibbi piece or John Stossel or Tom Perriello, two are written ‘in voice’ as satire –the very two quoted in the post here as examples of wrong-headed partisanship.

    I never meant the entire piece was satire –i assumed that would have been clear anyway, to anyone who’d seen the piece and noted its construction.

    But see it for yourselves, i’m not the author, what do i know, other than that the two whiney, cynical, sarcastic voices in the two paragraphs under examination are not Fernandez speaking in his own voice as it appears thru years of belmont to those who (among the eight or nine million hits Wiki counts it) comment there, and clearly he meant them as illustrations, as examples, of the sort of thinking that allows Jefferson County blowups –and ‘crisis of 08′ catastrophes –to happen in the first place.

    IOW, not only did he not come to bury Taibbi, he came to (rather fulsomely) praise him.

    But suit yourselves –i think you’ve flipped the essay’s meaning 180 degrees (no wonder it peeved you) but as old Foghorn Leghorn sez, ‘i tried, i say i say i tried, ta tells ya!’

  38. collapse expand

    Firstimer here, but a regular at Belmont Club. I am a resident of Jefferson County. But, in Colorado. Thankfully our commissars are not yet as corrupted as the figures central to that other JeffCo.

    After reading most of the comments above, I’d suspect many commenters here are missing out by not visiting that community at Belmont. You too, Matt.

    Ayn Rand, Milton Freidman, George Orwell, et al. It’s not like they didn’t describe in agonizing detail, what the real agonizing was going to be like. Remember Jeff Goldbloom in Jurassic Park? “Now all the running and screaming starts.” Many have warned how really difficult any escape from the steel-to-titanium-to-digital shackles inexorably created by statism would be. At some point, escape becomes nearly impossible, which leads to impossible, or not.

    All tax is theft. Otherwise it’s called a gift or contribution. To argue over how much is “fair,” when that’s measuring fairness to everybody but you, is to not understand the problem. If one is beholden to the motivations of the thieves, it’s called elective slavery. Extortion at best.

    On a lighter note, imagine, right now, all gov’t bureaucracies (local, state, regional, federal and int’l) are busy preparing next year’s budgets. And, they’ve not been ordered to cut them by 50%. They’re budgeting for the continuous total refit of the Titanic, while steering toward every iceberg, and forcing US to buy passage.

    Gov’t workers now make 30% more than their private sector counterparts, wtih healthcare and retirement packages most non-gov’t workers would covet. However, not one of them produces a new dollar.

    Puzzle me this. How can a tax-payer strike but either illegal or immoral? Isn’t it their money? Or, are property rights so last century? Only those who actually pay taxes can solve this problem. And, we’d better get cracking.

    If “passing a bill you haven’t read” or buying votes, or payoffs to constituents are not criminal offenses, worthy of prosecution, then the US is doomed to civil war.

    Course me, I want to resume waterboarding in 5, 4, 3…and apply it not only to all terrorists (here and abroad) but also to Congresscritters and their staff. Just the threat should produce all the evidence necessary for convictions. Expand Gitmo.

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    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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