Will Goldman Sachs Prove Greed is God?
So Goldman Sachs, the world’s greatest and smuggest investment bank, has been sued for fraud by the American Securities and Exchange Commission. Legally, the case hangs on a technicality.
Morally, however, the Goldman Sachs case may turn into a final referendum on the greed-is-good ethos that conquered America sometime in the 80s – and in the years since has aped other horrifying American trends such as boybands and reality shows in spreading across the western world like a venereal disease.
via Will Goldman Sachs prove greed is God? | Business | The Guardian.
This is a comment on Goldman and the Objectivist movement I wrote for the Sunday Guardian. For those wondering about some of the odd formatting and spelling, please remember that this is a British paper! I’ve already had letters pestering me about not knowing how to spell “Collateralized.”
Extra points to those readers who can identify from which spot the term “hairy-backed” was removed by the Guardian UK editors.
Post Your Comment
You must be logged in to post a comment
T/S Members
Log in with your True/Slant account.
Thank you for publicizing the existence of Objectivism — the only rational philosophy for living on earth. And you are correct, we Objectivists have every intention of ridding ourselves of the burden of looters and moochers and the power-lusters in government who cash in and gain power by assisting the looting and mooching.
(And in the business world, too, there are plenty of villainous businessmen cashing in on the looting and mooching — these need stopping as well. The solution is laissez-faire capitalism, which removes government’s power to get in bed with business and thus eliminates business’ ability to use government regulations to harm the public. Had you read Atlas Shrugged, you would know that such businessmen are as bad as any government looter.)
But really, you are making a fool of yourself over this Goldman Sachs deal. Goldman brokered a deal between one party that wanted to bet that home prices would decline and another party that wanted to bet they would continue going up. Both parties knew precisely what the securities that Goldman sold contained — both parties were sophisticated investors that make such bets all the time.
Goldman also bought the sucurities — they also bet that housing prices would continue to rise — so guess what? Goldman lost millions on the deal, just like the German investment bank that bet on rising prices and lost.
So the SEC’s accusation — which you have swallowed hook, line and sinker — amounts to accusing Goldman of defrauding themselves!
Goldman defrauded no one — the whole complaint is a massive and foolish waste of time.
But how can any thinking individual read Atlas Shrugged? Leaving aside the reprehensible morality, the writing sucks. How can any individual with half a brain take it seriously?
In response to another comment. See in context »Larryb33c,
The mind that saw the US moving from the world’s largest creditor nation to the largest debtor nation; the only thing they didn’t have was legitimacy (1947-1973); Nixon: “we’re all Keynesians’ now”; they built up the think tanks, the math’ed up the field to increase rigor, but they needed an icon from the past…. something to revere that didn’t involve thousands dying in a Santiago Chile Soccer Stadium; the metaphor is priceless
1) Holding up the world
2) Strength of will
3) Learned Helplessness led thinking
But I digress…
How the hell are you larry?
In response to another comment. See in context »I’m fine, thanks for asking.
In response to another comment. See in context »I was wondering how long it would take for a Randian kneejerk reaction to appear below this article, and I wasn’t disappointed! The very first comment! And a predictably uninformed one too!
“Both parties knew precisely what the securities that Goldman sold contained.”
The whole point of the SEC complaint is that the above is not true. Otherwise there would be no case.
In response to another comment. See in context »Shorter michealwsmith (and Atlas Shrugged):
Me, me, me, me, etc.
In response to another comment. See in context »Hah! I’ve made my way through “Atlas Shrugged” and I ended up laughing my head off.
The United States is the only country where the currency symbol contains its own acronym. How beautiful! Plus Dagny Taggart eschews the moochers/water carriers but would gladly lick John Gault’s toilet clean by the end of the story. And wtf, the “men of the mind” accomplish nothing over the years the novel takes place. only one more Halley concerto? Perhaps even he realized the folly of his compositions. Too bad Greenspan, Reagan, et. al. didn’t notice the folly of Rand’s compositions.
In response to another comment. See in context »I’m curious about a couple of things here. First of all, I’m curious about how a *work of fiction* is supposed to provide an unbiased, objective commentary on the relationship between government and business. You might as well have said, “Had you read Left Behind, you would know that all the cute children and Bible-believers will get sucked up to heaven on a golden chariot come Judgement Day.” Just because Ayn Rand wrote it doesn’t make it true. That was Alan Greenspan’s oversight, and it will soon be your own.
Second, I’m curious about how you know that Goldman wasn’t intentionally witholding information from their client. I could tell you that the SEC wouldn’t go after Goldman if they didn’t have info suggesting they more than did the usual mix of short and long betting on the underlying asset… but you will, of course, promptly inform me that the SEC is a stooge of “big government,” going after Goldman with a frivolous lawsuit. The problem is that the SEC has been a largely toothless stooge of government, having spent the last ten years meticulously ignoring any and all problems over credit default swaps, corrupt rating agencies, etc. etc. The Goldman lawsuit is the first time the SEC has done its job in the last ten years.
Third, I’m *really* curious about how the problem with the current financial meltdown is supposed to be a problem of excessive government regulation. If government had stepped in at some point and said: you can’t push adjustable-rate mortgages on people with zero credit rating; you can’t sell credit default swaps to people who don’t own the underlying asset; you can’t rely on quant formulas like Gaussian copulas to stand in for the real work of risk assessment; you can’t allow a situation where rating agencies inflate their ratings in order to maintain market share — if government had stepped in to do any number of these things, then we might not have had the massive implosion that we did. I’m really curious how you can look at the available evidence and come to a different conclusion than that.
In response to another comment. See in context »Ah, yet another brainwashing cult calling itself by a name which is exactly the opposite of it’s beliefs. Objectivism is nothing more than a tool used to rationalize purely subjective greed!
Humanity has always lived – and died – in societies. Humans are goup animals, we succeed and have always succeeded through cooperation. The premise of objectivism that the society and humanity in general is best served by the unfettered self-serving greed of the individual is completely ludicrous, and is only a tool used by the most immoral amongst us to justify damaging the lives of their fellow citizens for their own benefit, and to convince morons to support their own impovershment.
In response to another comment. See in context »I’ll go out on a limb and guess that your original sentence was “Confronted with the evidence of public outrage over these deals, the hairy-backed leaders of Goldman will often appear to be genuinely confused, scratching their heads and staring quizzically into the camera like they don’t know what you’re upset about.” And that’s too bad, b/c the description makes the sentence even better.
If I’m right, do I win anything? A Matt Taibbi defaced and autographed copy of Atlas Shrugged?
Even if there’s no prize, it was still fun to read the article and put “hairy-backed” in front of every reference to Goldman!
Here’s my guess:
“Much of America is going to reflexively insist that Goldman’s only crime was being smarter and better at making money than IKB and ABN-Amro, and that the intrusive, meddling government (in the American narrative, always the bad guy!) should get off Goldman’s Armani-clad hairy back. ”
This gives the image of someone’s matted back hair constantly being rubbed uncomfortably by an expensive jacket. To relieved the discomfort, they must constantly pillage and loot everything in sight. Including their own business partners.
In response to another comment. See in context »I’m going to guess it was right before “…hedge fund manager..”
Anyway this is most likely how the Goldman case will play out. And those who side against Goldman will ultimately associate the culprits as friends of Obama, which isn’t entirely true.
I like the description of the tea party movement for people who don’t live in this country. Following those statistics that came out detailing the actual demographics of the Tea Party we now know who really associates with the movement. I went to the rally in Boston last week, because obviously I’m fascinated and how could I pass up a chance to see Sarah and her red leather jacket in person. Anyway there I am surrounded by middle class whites from various Massachusetts suburbs and what was the line that drew the biggest applause? Basically a proclamation that the Mexican border needs to be sealed up so tightly that a rattlesnake can’t cross it safely. A real LOL moment, obviously this is the most pressing issue for middle class North Easterners. I guess its just the most black and white example of the bloodsucking poor that fits in with their narrative of America.
I’d say the original was “hairy-backed gremlin” which was then switched to the much more polite “gremlinish”. Gotta love the Brits and their manners.
my guess if its “hairy-backed” in reference to a person (i.e. Greenspan); it’s more about fear of the insane & expensive UK libel laws, rather than stereotypical British politeness.
In response to another comment. See in context »Great article. My guess is the term in question was taken out of “were examples of Goldman making millions by bending over their own hairy-backed business partners”… but I hope I’m wrong.
My guess as well. I think we should re-edit the article for submission!
Now I’ll be adding “hairy-backed” to everything I read this week.
In response to another comment. See in context »“Even if he stands to make a buck at it, even your average hairy-backed used-car salesman won’t sell some working father a car with wobbly brakes, then buy life insurance policies on that customer and his kids.”
Male pornstar Tyler Knight has been practicing writing for the past few months, and it’s been really interesting. I’m sure he’s got a book deal now, or he’ll get one soon. One of the things he occasionally mentions is that at times he’s been so depressed the only thing keeping him from drinking a gallon of gin and driving off a cliff is his devoted girlfriend. One might think his depression comes from the weirdness of being in porn, but he blames it on another job he once held. If you read more, you find out he’s referring to time he spent hard-selling old people and young couples into buying whatever stock his firm was hocking, knowing it’d probably ruin them financially.
Got that? Tyler Knight almost contracted HIV in the porn-HIV outbreak a few years ago, and he and his girlfriend were both white-knuckling it for a few months while test results came back, but the thing that makes him want to kill himself was the year or two he spent selling stocks.
My bet is on ‘hairy-backed used car salesman’ too. It seems the most logical place to place the adjective in the article.
In response to another comment. See in context »No, I believe it was “a young, hairy-backed Alan Greenspan.”
That might come across as anti-semetic, something Taibbi is more conscious of since he got some flack for the vampire squid metaphor.
In response to another comment. See in context »I’m with the “gremlinish [hair-backed] former Federal Reserve chairman Alan Greenspan” crowd
A sort of “street” Adam Curtis. Nice.
I suspect that only two things are going to move this argument forward, however.
1) Seriously disgusting evidence of the lobbying power of Goldmans.
2) The next crash (which needn’t be far away if we follow anything like the pattern they did in ‘29-’31).
Okay, here’s my guess:
“…which is a fancy way of saying we only need law enforcement for unsophisticated [hairy-backed] criminals.
I can imagine you inserting the word there, and I can imagine them taking it out. If I’m wrong, then I want to change my guess to “hairy-backed Ayn Rand.”
In any event, it’s a great article.
Either this is an example of the current journalistic practise of not fully researching a subject and instead relying on what someone else has said; or you simply lack the intelligence and concentration to read Rand’s writings in full and understand the message. One of her core messages is that money must have an objective standard of value and that any manipulation of such fits within the parasitic behaviour which you reference. And at its core, the recent global financial crisis was a function of the manipulation of interest rates by global central banks – the supposedly immoral behaviour of investment banks was only possible due to the mispricing of risk which came as a function of interest rates being held down for too long. To link Rand’s views to the current malaise purely as a function of Greenspan at one time being a follower of her views shows a complete lack in logic, a failure in intelligence and a desire to make headlines rather than deliver quality analysis. But what else could be expected from this author?
The most alarming thing about Randists is how much they get off on it. Doesn’t religion stimulate the same parts of the brain as certain drug addictions?
Settle down, dude. Ayn Rand’s dead. Even if you fucked her now, she couldn’t tell you how good you were.
In response to another comment. See in context »intelligent response, wish i could come up with something that well structured.
In response to another comment. See in context »If you were not such a parsing jackass talking about Randian core aspects of thought that only coincides with your pedonka donk flavored cerebral cortex (head up ass)you might consider that citing ‘objective standard of value’ financializes the conversation and reduces it to a King Kong size excrement of projection.
objective standard of value means that I am going to hide behind my field’s use of mathematics and science to bullshit, obfuscate and to ignore the white collar criminal behavior that I am about to unleash on poor unsuspecting non-economists… in the name the free hand of the market will save the day…
Dude, we live in a society who believes in a man in the sky controls all; that an invisible hand will correct economic market forces as if they are seemingly unrelated to social, moral, physical and political domains…..
I mind is a terrible thing to cut and paste
Signed the Easter Bunny & his Brother Santa
In response to another comment. See in context »pedonka donk flavored cerebral cortex
try “cranial-rectal inversion” – fits well into polite cocktail hour jibber jabber.
In response to another comment. See in context »consider it done; hyphens rock
In response to another comment. See in context »;~) –
In response to another comment. See in context »Well Greenspan kept rates low in order to facilitate the bank’s activities, which shows that the bankers were not smart people taking advantage of mis-pricing in a free market, but bankers being subsidized by the gov’t via low rates with Greenspan’s help.
In response to another comment. See in context »Without gov’t Goldman couldn’t make any money. Borrowing from the Fed, mortgage subsidies, low rates, FDIC,etc
[...] WіƖƖ Goldman Sachs Prove Greed іѕ God? – Matt Taibbi – Taibblog &… [...]
I’ll go with “bending over their own [hairy-backed]business partners.”
So many hairy backed cromagnons so little Darryl Hannah… Quest for back hair
I’ll take door #3 Matt! It fits
Behind Door #1: Hairy backed Russian Born Rand
While, outside of America, Russian-born Rand is probably best known for being the unfunniest person western civilisation has seen since maybe Goebbels or Jack the Ripper
Behind Door #2: Hairy-backed Randian ethos
In the Randian ethos, called objectivism, the only real morality is self-interest, and society is divided into groups who are efficiently self-interested
Behind Door #3: pissed off hairy back suburban white people whining about minorities
There’s a hatred toward “moochers” and “parasites” – the Tea Party movement, which is mainly a bunch of pissed off suburban white people whining about minorities consuming social services, describes the battle as being between “water-carriers” and “water-drinkers”
You think Ayn Rand wasn’t funny? Check out Francisco D’Anconia’s money speech.
It reads like a diddling clergyman railing about the evils of pederasty.
In that speech, Rand attempted to bullshit and distract and baffle and fig-leaf her crackpot philosophy by finger wagging against the very stuff it enabled and justified.
And all of it wrapped in the most pompous blowhard prose, well, ever.
And you just know, narcissist that she was, she was fully convinced she succeeded in outsmarting everyone and throwing them off the trail. When she was doing nothing more than what every abuser between Miami and Bangor, Maine does when he goes on a pious indignant rant about how some other abuser is mistreating his wife and kids. Yep, keep ‘em scratching their heads and on their heels, totally bewildered and trying to figure out reality.
Comedy gold. Oh my sides.
In response to another comment. See in context »Here’s my “hairy-backed” guess:
“Much of America is going to reflexively insist that Goldman’s only crime was being smarter and better at making money than IKB and ABN-Amro, and that the intrusive, meddling government (in the American narrative, always the bad guy!) should get off Goldman’s Armani-clad hairy back. ”
This gives the image of someone’s matted back hair constantly being rubbed uncomfortably by an expensive jacket. To relieve the discomfort, Goldman Sachers must constantly grift and loot everything in sight. Including their own business partners.
Great article!
Matt,
Don’t forget to write about how Warren Buffet, the Oracle of Omaha bought into this, thereby implicitly endorsing that it’s ok to bet against America.
Buffet’s quite averse to bad reputations, even if he does have other people do the dirty work for him.
Well done, lazyichi. You have caught the red herring that Warren Buffett has been using ever since March 2003 when he famously described derivatives as “financial weapons of mass destruction”. Extra credit for catching it two days before the Ben Nelson financial regulatory reform flip, in the wake of the removal of the Buffett-benefitting provision, was reported on:
http://www.huffingtonpost.com/2010/04/26/nelson-flips-on-regulator_n_552742.html.
It should now be crystal clear that Warren Buffett does not take his own plain-spoken advice. Recall how Buffett preaches investing in businesses that you know, in businesses that you can actually figure out? I guess Buffett understands perfectly what Goldman’s business is, hence his investment in Goldman Sachs.
And it looks like Buffett understands all about those complex financial instruments, DERIVATIVES, and imbibes with relish. Watch what Buffett says, then watch what he does.
In response to another comment. See in context »This is why we need to get away from these calls for “regulation” and get back to enforcing laws.
The bureaucracy put in place to enforce these regulations serves as nothing but a gatekeeper between the people and justice. It is most often staffed with those of like minded philosophies to those they supposedly regulate.
The bureaucracy expanding to meet the needs of the expanding bureaucracy.
Although you yourself may be perfectly qualified in whatever endeavors you choose to pursue otherwise, and indeed may be a wonderful person, unfortunately your comment conveys the deep misconceptions of a blithering idiot.
Regulations are an integral part of the governmental legal structure. congress passes a bill providing for the exercise of certain powers by the executive branch; the president signs it; the agency affected or created by that bill promulgates a set of regulations to take the high-sounding, often squishy concepts in the bill to some workable state; the Senate-approved nominee to head the Agency takes responsibility for the proposition that the regulatory meat properly fits the legislative bones; and that head of the Agency is directly responsible to the head of the administration — the president — who has the constitutionally-embedded authority to express his — or her — displeasure by admonishing the head, urging appropriate change to repair any bad fit, and failing restoring the president to good humor, by sacking the head, taking such political heat and bother as comes.
Without regulations, the bones lack muscles, sinews and other connecting tissue, fat stores for energy, nerve channels to convey directions to the body as to what to do, and sensors to inform the brain what has been done.
Regulations are, in short, manifestations of law.
In response to another comment. See in context »I add the note, not at all in passing, the effect of the Grand Deregulation attributed to former sportscaster, B movie actor, witch hunter and corporatist spokesperson, President Ronald Reagan, was nearly not so much to cut red tape and streamline regulatory structure, as was claimed, as it was to eviscerate large functions of the body government, substituting therefore a serious level of disabling paralysis in some parts, and at least as serious a level of Versailles-style corruptible cronyism in others — a condition which is deeply connected to the current overall inefficacy of the federal government and is intimately connected to how much damage has been done to the economy as hinted in September, 2008. Reagan, two Bush’ and, to some extent, a badgered Clinton, set off to prove that government doesn’t work — and took it to a near vegetative state to advance their case.
In response to another comment. See in context »I’m glad you took time to catch your breath in between helpings of self-importance, we as a nation can ill afford the loss of such a startling intellect.
I in no way advocated the further elimination of regulation. I simply pointed out that the bureaucratic arms that have come to embody the very notion of regulation and enforce them are as inadequate and fundamentally flawed as the system they aim to regulate.
I want the courts and an investigatory body to be the tools of enforcement, not a herd of ex-industry hacks that owe their jobs to the very people they regulate and a cadre of ham-fisted pragmatists with law degrees.
Case in point – the civil suit against Goldman. If I went out and stole a gallon of milk, I doubt the local government would bring a civil suit against me on behalf of the Safeway. The regulatory sinew seems to react differently to flies like me then it does to giant squids.
I’m a bit late in response, but I look forward to another lesson in how the world “works”, so I can get a clearer picture as to why it’s broken.
In response to another comment. See in context »Matt, I love these lines FTA:
“Even if he stands to make a buck at it, even your average used-car salesman won’t sell some working father a car with wobbly brakes, then buy life insurance policies on that customer and his kids. But this is done almost as a matter of routine in the financial services industry, where the attitude after the inevitable pileup would be that that family was dumb for getting into the car in the first place.”
Way to break it down. Enjoyed the whole article.
The greed of GS is amoebic compared to the greed of government, federal, state, and local….and its hordes of government employees feeding off of the citizens like swarms of giant mosquitoes….
At least if I give GS my money, they might grow it and give me pack a profits…..while when government forcibly takes my money….I get nothing in return
Andy this type of horseshit always amazes me;
your government ranting is like mother-blaming; has it occurred to you that maybe government has been gutted over the past thirty years to make room for a corporate led state that is commonly called neo-liberalism?
Nothing wrong with corporations except when they get too much power and hire politicians to gut the very institutions they are responsible for; take a look at the corporatist’s who have fucked up the joint who are still employed currently both in private and public sectors… it makes no difference, they all have been captured by the apparatus…
I am sure somewhere you have considered your ideas, but you might try testing them out; making a profit (GS or Government)is not really essence of life when you have GHB in your milk, salmonella in your chicken, toxins in the water, Ninja loans in your CDO tranches, fraud in the precious metal markets, and whistle-blowers in jail…. also making analogies about insects and citizenship shows your derision and repulsion; usually this is always tied to something else like say worms roxanne worms
So you can blow all over yourself about the welfare state, entitlements, taxes, and douche-bag political parties, but stop the incessant bullshit about government employees feeding off the tit…. greed is systemic and isomorphic which means that is always operating in top down and bottom up processes… if we had regulation and enforcement you might feel differently
The greed of GS cannot be measured nor can their hubris…I am sick reading people’s individualistic experiences with government; quit bitching and be the change in the world that you want done…
In response to another comment. See in context »When you’re arguing with a Randroid it pays to ignore most of what they have to say and attack their premises directly:
“when government forcibly takes my money….I get nothing in return”
Except no, he gets a lot of stuff in return. To draw an example from Taibbi’s recent work, he probably uses public sanitation networks. The guvmint provides plumbing and sewer systems so people like Mr. Levinson can have indoor flush toilets instead of shitting in a hole in the ground, but he takes this and the many other services provided by governments via tax money for granted because he’s an objectivist doofus.
In response to another comment. See in context »duly noted; it was 4am and I was my own caffeine induced rand rant… lesson learned
In response to another comment. See in context »GS doesn’t keep me awake at night, but shit bumms like Obama, Pelosi, Reid as they try to remake America into the image they have in their neo-commie brains…..they need to control themselves, not corporate America….
In response to another comment. See in context »By dividing us into left and right parts of the apparatus Andy, they co-opt us all irregardless of whether it is corporations or government…
The fact that you are not up late at night disturbed about Corporate America is due to probably three reasons:
1) your interests are directly aligned with them and your own personal power diminished as theirs does
2) you are more interesting in winning an individualized battle where demonizing government serves an emotion need to feed the inadequacy of not being able to do anything about it
3) you are not very well read in the areas that would most challenge you; if you were reading in these areas presently you would be greatly disturbed (anyone with a pulse is)
By directing your anger at a few public figures that you have no real relationship with shows how childishly naive the idea of commie-brains is: Communism is used as a fear tactic by the right to maintain the status quo
If we moved left as a country, this wouldn’t mean communism; it would be the re-balancing of power in a right-leaning country; mark these words: Communism is a no-go in America
In response to another comment. See in context »So, educate yourself Andy; a mind is a terrible thing to cut and paste
I don’t stay up late worry about corporate America.because I know corporate america is busily working 24/7/365 pumping out pension dollars for America’s greedy teachers, police, fire whose pensions, pay and perks are driving every America city and state toward bankruptcy….
But if you want to substitute Obama’s printing presses for corporate america’s greed, be my guest…it will be good for the wheelbarrow industry….as America’s five million public school teachers wheel barrow home their worthless Obama dollars……
In response to another comment. See in context »Obama is about as communist as Ronald Reagan, broheim.
In response to another comment. See in context »Andy, if you get nothing from the government, then please tell us how you manage to get around without using the roads, how you protect your house and loved ones without calling the police or fire department, how you were educated in private schools and how you will never ever take a dime of Medicare and Social Security.
And by the way explain to us how much you want to end the wars and dismantle the military. I’d love to hear that one.
In response to another comment. See in context »And the house you live in was probably built with gov’t subsidy. Gov’t has subsidized every type of housing since the 30’s. Tea parties always ignore this
In response to another comment. See in context »You want to talk about greed, let’s talk about police and fire…and all public employees…whose pension plans own 1/7 of all investable assets in america….and are quite happy to have GS manage part of their pension funds….
Let’s talk about the greed of California biggest business, education…..and it’s 340,000 public school teachers who devour everything in their path…..
Let’s talk about dow the freeway here where we have San Juan Capistrano teachers on strike….they average $76,000 nine month contract plus benefits, bringing in twice the average private sector pay of the taxpayers who pay their way thru life
In response to another comment. See in context »Andy,
these are reasonable points; corruption exists in California (yes), but by separating out the parts you do not want to examine and by focusing on only those select pieces that confirm your world view you miss the larger pieces…
A good example of this in how we have moved from a society of generalists to one of the specialist where no one really knows what is happening in other domains; because of corporate efficiency we are encourage to focus on specializing knowledge that prevents ordinary people in making connection between private and public interests…
In response to another comment. See in context »Point is GS is but a pimple on the back of the elephant called government greed….which consumes everything like a wildfire….the government can inhale the gross worth of GS in one breath
In response to another comment. See in context »Wow. The civil service is, apparently, the place to go for the greedy scumbag who wants to make money hand over fist. Who knew?
In response to another comment. See in context »That’s why all of the MBA schools say: don’t go to Wall Street and make chump change at some hedge fund……. nooooooooooooooooooo
Instead, find a local, state or federal post where the big bucks really are… You know, places like Birmingham Alabama or Rust belt cities in the Midwest where the jobless rate nears 25%….
Come on! Government oppression occurs in the context of a dominant corporate ownership of the apparatus we call democracy….. Andy needs to read to Perkins, Klein, Galbraith, Black, Johnson & Kwak, Yves Smith, Karen Seccombe, Eduardo Galeano, Harvey, Karger, Bernays, Ralston-Saul, Baker, Ehrenreich, Chomsky and Hacker……….. once you integrate this dude maybe… just maybe you might have some credibility… (note: I know there are so many I left out)
In response to another comment. See in context »Intriguing article. Trust Matt Taibbi to come up with a new angle. But if I remember correctly, Ayn Rand’s heroes were always handsome, muscular, tall, and very masculine – including the heroines. While the villains were effeminate and looked like… well, let’s not name people, their feelings might be hurt.
For people like Blankfein and Greenspan to take themselves for John Galt, is like Tom SuckOnThis Friedman thinking that he looks like Rambo. Maybe complicated financial regulation isn’t necessary after all; maybe we could prevent financial meltdowns (and wars) simply by ruling that derivatives trading (and warmongering) may be done only by people who have flat abdomens, and who can get laid without paying for it. Way to get over-compensating couch potatoes away from behind the steering wheel.
Then again (sorry but not sorry to be cruel), when I look more closely at God’s Work, it strikes me that he may be modelling himself after a character invented not by Ayn Rand, but by Jim Morrison:
“I am the lizard king
I can do anything.”
You learn a lot more about Ayn Rand through her disciples posting on message boards than you do by reading her half-wit turgid prose. The best part is that in this case, its plainly clear Goldman didn’t even follow the basic premise of capitalist trade – but hey, everybody knew what they were getting anyway!
I say Goldman execs should be forced to watch the Fountainhead film – a fitting punishment, and a fate worse than death.
I had sex with an Objectivist stripper once. There was some fucked up pillow talk afterwards. She also played weird industrial music on her tinny computer speakers for a while. Sounded like pigs stabbing each other with screwdrivers.
In response to another comment. See in context »Fingers crossed that it was “hairy-backed boybands” — it has a nice ring to it and dovetails well with the “aped” reference in the same sentence.
I know there’s a Python joke in there somewhere.
[...] WіƖƖ Goldman Sachs Prove Greed іѕ God? – Matt Taibbi – Taibblog &… [...]
Nice article. Some important observations about the crossroads we currently face. One point, we will disagree on is that Matt seems to believe that this “greed-is-good” ethos is limited to the rich Wall Street types (which appears to be a description they embrace).
Rather, in my observation, it has percolated down to nearly every person in our economy. I call it the “money for nothing” economy. In the last 10 years, I have noticed a discernable movement by many folks in the service and retail industries to get money for nothing. Gardeners, mechanics, plumbers, etc, charge you whatever they want to, unconnected to the real costs or the value they actually provide. This is conduct is no different than Wall Street but of course, a plumber who slips in an extra $100 profit will not bring down our economy. I have since tied these types of services to hourly rates and it’s amazing how much “nothing” comes right off the top.
And, of course, corporations have taken the “money-for-nothing” mind set to a whole another level. Baggage fees? Are you kidding me? I have the pleasure of paying an additional $60 bucks for the exact same service that I used to get for my total airfare. What a deal? UPS, thanks for charging me an additional $9 bucks for your “fuel fee,” I guess they didn’t use fuel until recently. ATM fees, processing fees and my favorite, administrative fees, which really is charging us for the costs of charging us. Really? You want to charge me $3 bucks a month so you can bill me?
So in the end, our problems will not be solely fixed by focusing on Wall Street. Yes, we need to start there but we also need good, decent people to take a look in the mirror and starting being honest with themselves so that they can be honest with others. The sad part is that people don’t realize that by ripping off others, you end up ripping off yourself as the valueless rise in prices will make everyone pay more.
So if you want to do something in your self-interest then give an honest day’s work for an honest day’s wage.
Mr. Breen, you have indeed “nailed it.” I have made the same observations and have been trying to relate that “cause-effect” model to “everyone” for more than a decade. True, there are some who will “give an honest day’s work for honest day’s wage” but 1) they are few and far between and 2) there are even fewer “employers” paying an “honest wage.” I refer to it as a “fair exchange of value.” Alas, most “employers,” be they corporate tycoons or your neighbor “hiring” someone to mow the lawn, would much rather pay absolutely nothing for that “honest day’s work.” It appears to me to be a tacit collusion of the arrogantly ignorant to cheat and deceive others for their own enrichment, consequences be damned.
In response to another comment. See in context »Matt Taibbi’s artcle is fabulous!
Making the Guardian even better
The truly frightening thing about Randist’s is how superior and intellectual they believe themselves to be when it is clear to a majority of rational people that Randian ‘philosophy’ is nothing more than codified narcissistic personality disorder. To most of us they appear to be victims of a charismatic sociopath–figures of pity because, like Charlie Manson’s family, they have been thoroughly and unwittingly duped by her anti-social rhetoric and their own narcissistic traits into spreading her poison. To set the record straight: No, you are not better, smarter or more deserving than everyone else by virtue of your existence. You don’t work harder, produce more or contribute inordinately to society compared with most others (with a tiny handful of notable exceptions–few of whom are followers of Rand). You just have a warped, most likely pathological-sense of your importance that is nourished and coddled by Rand’s repugnant ideology. Your punishment will be to actually have to live in the ugly, selfish, hostile world you dream of. Unfortunately, so will the rest of us.
Taibbi is right that most American ‘Randian’s’ know little or nothing about their hero. They would be surprised to learn that Rand’s inspiration for her ‘real man’ heros like John Galt was a real-life serial killer, William Hickman. The pinnacle of his criminal activity was to murder and dismember a 12-year-old girl–probably a ‘moocher’ or ‘parasite,’ so no doubt deserving of that fate by Randian standards (http://www.alternet.org/story/145819/?page=1; http://www.michaelprescott.net/hickman.htm). Rand admired that he didn’t let pesky issues like basic morality and human decency stop him from achieving his goals and she mourned his capture. She wished he was a little less degenerate, but felt it was tragic for society to condemn such a man of action. Some role model. The woman was simply a garden-variety sociopath. It’s like idolizing Jeffrey Dahmer’s crazy, doting aunt.
Tragically, the last bastions of pseudo-morality, the churches, have now been polluted with this nonsense, too, with ‘prosperity gospel’ (have these people actually read the Bible?) and the recent vilification of religious social justice programs taking a more prominent role in American religious life. It begs the question: Don’t you people ever think for yourselves? Seriously, do you just swallow whatever swill is being served up by the narcissist/sociopath of the moment and adopt it as your personal life philosophy? There is nothing objective about objectivism. You live in the same world with other people, some more intelligent and productive than you and some less–that is objective reality. Enlightened self-interest would say that it is best for all of us if the world we live in is not an amoral shithole.
mickey7,
In response to another comment. See in context »Your post is as good as Matt’s article. Kudos!
Excellent post!
In response to another comment. See in context »I especially liked your first sentence. We get the Wall Street Journal (using up some frequent flier miles)and it was with some alarm that I noted the frequent Rand references in the letters to the editor section. I did not realize just how popular she was. I checked out Atlas Shrugged on Amazon and was horrified to see that almost 2000 people had written reviews– many quite long winded (I guess they want to ape their heroine). This was pre teabagger. I was just amazed that anyone could take this crap seriously.
In response to another comment. See in context »Flattery works. Rand’s popularity proves it.
Here’s more of what I believe Mr. Taibbi is trying to get across. At one point, the guest points out the leading text on corporate law basically says that laws to stop fraud are neither necessary or important.
http://www.pbs.org/moyers/journal/04232010/watch.html
It’s too bad Mr. Moyers is retiring.
I think you are making a mistake comparing Rand and Greenspan, a Rand disciple. Granted, Rand was proud of who Greenspan had become, but I am not so sure she would have been proud of how he acted.
The cliff notes version of Rand is not me, me, me. Rand came from the USSR and rewards were doled out based on need. In the U.S., ideally, rewards are given out based on how productive one is. The Atlas Shrugged, while I admit dragged at times, had a section that absolutely laid out the fall of communism using the death of a factory.
When workers were paid there based on need, they got less productive and more needy. But when they were paid based on productivity, they had so much (and this is the part that has never been mentioned by superficial Rand readers) that they were able to help others when they were down.
The heroes in the Rand book were producers: an architect, innovative steel producer, and a builder of railroads. The villains were the ones who mooched off the producers and took the fruits of their labor as if they owned said rewards.
Perhaps the best example I saw of this in modern life was the absolutely stupid and irrelevant reaming Microsoft got by the DOJ. The line that a journalist wrote that had my head spinning was “Microsoft cannot do whatever it wants with Windows”. Here we had others/the government taking ownership of something that was not theirs.
The Goldman folks are not producers. They are selfish thieves/con men, and a true Rand follower should have nothing but contempt for them. The virtue of selfishness involved being selfish with your dreams and being a producer.
What Goldman has done is the equivalent of being a pickpocket, paying off the police, and then accusing us of being anti-capitalistic when we condemn their behavior. The whole leech like behavior of private gains, public losses, that has been attributed to Rand, no doubt has her spinning in her grave.
By attacking Rand, Matt, you are allowing Goldman the chance to disguise their crony capitalism/stealing as Rand capitalism when they could not be more different. In short, Rand followers want laws in place to protect producers like Bill Gates and Steve Jobs. The last thing we want are laws to protect leeching thieves like the folks at JP Morgan and Goldman.
jz,
Your comments are more savvy than most Objectivist supporters here, but the variety of interpretations show s that each reader can fit Rand’s thoughts to support their own. I think that GS has done just that.
Also, I feel that Rand’s writings are definitely period pieces. In the name of communism, the Soviets took over her father’s pharmacy. This and other acts under the moniker of communism colored Rosenbaum–>Rand’s life. While I’m not a communist, the government created by the Russkies was not communist or Marxist, although they used those terms to make it seem as if the resulting dictatorship was something for the common people. The “section that absolutely laid out the fall of communism using the death of a factory” reflects Rand’s and others’s views of the USSR as a communist state, which it really was not.
I’ll agree with your stance on rewards for productivity, but would add/argue that part of the function of any society is to consider how its overall well-being is best managed. Sometimes that means taking care of some strays.
In response to another comment. See in context »jz1861, I think your view of the Rand-Greenspan comparison and of “Atlas Shrugged” are primarily valid. However, your likening of Bill Gates and Steve Jobs, while similarly legitimate, misses the mark in that neither of them are/were “producers.” I did an extensively, if not thoroughly, researched paper on the history and evolution of computers from the early ’50s until the mid-’80s when I was in college. It became very apparent to me that Paul Allen was probably most responsible for writing the code for the “original” DOS (some of which was, with IBM’s assistance, stolen from Digital Research) and, respectively, Wozniak was mostly responsible for the technical brilliance behind Apple. Gates and Jobs were merely the “salesmen” or, as I view it, the same con-men that predominantly populate the sector we call “captains of industry.” For decades now (if ever) neither Gates nor Jobs do ANY coding yet they hold a plethora of patents, and profit greatly by them, on code that was in fact created by people to whom they pay a relative pittance. If that’s not “mooching and looting,” I don’t know what is.
Another example that most people are probably unaware of involves the the transistor itself. W. Shockley and a team of 4 other engineers, working for AT&T Bell Labs in the early ’50s, invented that remarkable switch. AT&T was so pleased, they awarded each member of that team an entire year’s salary, roughly $30K-40K. The very next year AT&T made more than one million dollars _profit_ from the sales of transistors, and sky-rocketed in subsequent years. Shockley and his team didn’t receive another penny beyond their current salaries. “Mooching and looting?” You decide.
In response to another comment. See in context »I absolutely consider Jobs and Gates “producers.” Without any reservation.
I think it is a mistake to limit the idea of “productivity” to only those who stamp out widgets. Without Gates (who actually did write code, by the way) and Jobs, those two companies would not be the successes they are today. They were co-founders of their respective companies, for crying out loud, so everything the company produces is sort of a testament to their productivity.
I would contrast them to investment bankers and hedge fund managers (and many others) who are, at best, simply intermediaries taking money from investment-seeking savers and funneling it into the hands of Jobs and Gates and the like, who in turn make things that can be sold. I’m not saying investment bankers play NO role; intermediaries have a role. But their work does not directly lead to a product and, as things are today, they are a very big tail wagging an increasingly smaller dog.
So while I fully recognize your point — and come down on your side more often than not when it comes to the Jack Welches and Carly Fiorinas — I think we need to be careful to make a distinction between those types and founders of companies.
In response to another comment. See in context »cruss, thank you for your comment and partial(?) support. Furthermore, I emphatically concur with most of your 2nd paragraph, too, as well as the 3rd. However, please allow me to encourage you to do a little more research into the birth and evolution of Microsoft and Apple. You are, of course, 100% correct that Gates and Jobs were “co-founders” of those enterprises and I, prior to my research, had held the same view you express regarding those individuals’ “productivity.” Alas, it is now more than 25 years ago and, unfortunately, I am unable to recall the sources I had investigated. Nonetheless, the more I read on the topic, the more clear it became that Paul Allen did, indeed, do most of the “heavy lifting” of OS development as did Wozniak. I didn’t mean to imply that neither Gates or Jobs did ANY coding, just that their contributions in THAT regard was minimal at best. It most certainly WAS Gates that “persuaded” IBM to let “him” provide the OS for IBM’s “new” PC, even though Digital Research had already done a substantial amount of work on that project at the behest of IBM. However, IBM was in such a rush to get the machine to market, and DR was “playing along,” there were no “settled” contracts with anyone by the time Gates said “Paul and I can do it… for less money.” In other words, DR wanted a lot more money “up front” for developing the OS and, otherwise, didn’t think IBM’s product had much of a future. (DR was also heavily engaged in developing proprietary HW and SW in which, at that time, they had more “faith.” Funny how that worked out!) Don’t you ever wonder why Gates & Allen or Jobs & Woz have virtually _never_ been seen together in 2 decades or more? By all accounts I’ve seen, they don’t even communicate with one another, either. In general, Gates and Jobs, just like the Welches and Fiorinas, personally profit more considerably than the “real brains” that actually produce their companies’ innovations, and that’s just fucked up. In other words, the “intellectual property” laws of this wonderful country, and most others, are heinous and pathetic. Even more egregious is the way “venture capitalism” works, where the “guy” who provides nothing but some cash takes a larger share of the proceeds than the inventor/company making “the product” possible in the first place. Isn’t that mooching, looting, or both?
In response to another comment. See in context »Entertaining as usual! Here’s my vote–On the other side of the debate were the people who argued Goldman wasn’t guilty of anything except being “too smart” and really, really good at making money. This side of the argument was based almost entirely on the Randian belief system, under which the leaders of Goldman Sachs appear not as the “hairy-backed” cheap swindlers they look like to me, but idealised heroes, the saviours of society.
That spot works for me.
By the bye, Matt, the NFL draft not holding your attention?
Thanks (thankz) for the extra post!
Stupid, irrelevant bone of contention here, but the British deserve at least half or more blame for the popularity of “Reality TV” as we do. Most American Reality TV shows are imports of British (or other Euro) shows.
Blaming one philosophy for mankind’s ills is not enlightened thinking. Greed is what got Lucifer kicked out of Heaven. Randiness is just a part of the spectrum of the “I-am-God” views of the world, that will never quit changing shapes and colors, until He appears again. Unless “Atlas Shrugged” is mandatory reading for public schools in America, Matt cannot say it is the one true cause. But he can say it may have contributed, as I think he did in his fluent article. Or it this Matts example of the genre? More to the point is the question Matt asks, how are we to then live? There are two sides to the answer. Mans side, or Gods side. Morality is the key word here. God imposes morality, He made the moral rules. Love God, and love your neighbor. Without God there are no rules, absolutely. Without God everything is relativism, including mans morality, subject to majority rule, or a big stick. You are on a slick rink without ice skates if you don’t have an absolute morality. There is imposed from outside of ourselves, rules, to be followed or we suffer the consequences. Rands faulty thinking of man as the producer, without considering the complexity of our existence, is nonsense. Its the same mistake Darwin made, because he did not know about our only recently discovered microbiological complexity. Try to imagine the statistical spread of a cyclone passing a junkyard and leaving behind a fully-fueled and running jet airplane. Life is not by chance, nor is man left to his own devious and black heart.
I really cannot complete reading your thoughts here opismath without first injecting the question: who said God was a man?
We know that the winners of society can write whatever they want… just look at the ‘the hairy-backed’(Taibbi, 2010) man named David Brooks… fully sanctioned by power to spew non-sense….
Now, picture a few centuries in the future when Duke progeny and relatives of the homo elitus have spawned blue demon seed and are praying at the alter of Brooks…. No not Brooks Hadlin, David Brooks…. who wins the history writes the cultural version that suits there interest (holy scripture included)
I take the position (as a white male heterosexual living in a G-6 country with a financial miseducation) that God is more likely a woman than a man…. I take this gendered stereotypical position because of many things but among them is that this century has seen more murder, holocaust, ethnic cleansing and genocide than at any time in recorded history as we have evolved….
mostly done by men unto women and children; wars, colonizations, ritualized rape cultures and religious pissing matches have tended to be more patriarchal….. not to suggest that women cannot act as cruelly, but the numbers do not suggest this…. cyclones are more indian ocean storms and junkyards are for dogs and wrestlers….
Corey______ Hart
In response to another comment. See in context »I vote for:
in America Rand is upheld as an intellectual giant of limitless wisdom. Here in the States, her ideas are roundly worshipped even by hairy-backed people who’ve never read her books or even heard of her.
Matt, you do to unrestrained giants of greed what Hunter Thompson did to Nixon and his unrestrained giants of power. A million thanks.
Fraud is still against the law. Sounds like GS and John Paulson have committed such?
Some of Rand’s stuff speaks to me (being a strong individual)…but I couldn’t finish reading any of her books…didn’t like the writing. Taking advantage of others in the name of greed turns me off completely.
“Hairy-backed Ayn Rand”?
Very good Guardian article.
What is the point ? I worked all this stuff out before you did (focusing on Lehman) and I am a (relatively) uneducated idiot. Larry Eliot (Guardian economics editor) is smart, he called it as a scam when Bear Stearns went down, then had to shut his mouth when the scale became clear.
Either the rest of them are morons or liars. Your squid analogy (which again, they are far too stupid to know the origins of) has been used at least twice on the Guardian in a week, because of the official investigation into Goldman. It became safe to come out of their burrows.
When Goldman say they are doing the work of God, I assume that is a reference to the ‘perfection of the world’ work given to the Jews by God. Making money by investment is the most efficient way of creating more money and developing the world.
Even the gigantic financial scam we just went through, put the proceeds in the hands of hedge funds and banks, and it will go to India and China. To make more money.
Same philosophy as Rand but with added divine approval.
Ayn Rand is just Nietzsche for stupid people.
Love this; will cite you often spk22!
In response to another comment. See in context »I suspect it was:
“…thanks in large part to the effort of gremlinish, hairy-backed former Federal Reserve chairman Alan Greenspan…”
…but it would have been even better as:
“…ponderous, hairy-backed Russian emigre novelist Ayn Rand.”
Matt,
I wish you’d use Twitter more. I subscribe to you via RSS, but I find Twitter far more efficient — I’m increasingly using it more than RSS. That’s how I found your latest, through Twitter.
Jesus, Calvinists have nothing on Randroids. At least Calvinists, in their backward way acknowledged the capriciousness of the universe.
The way I see it, the world is not divided into producers and moochers. The world is divided into those who realize that their fortune in life has a more to do with dumb luck rather than diligence and hard work and those who flatter themselves with the belief that they are masters of their destiny. The former belief does not insulate you from self doubt and requires that you have some sort of requirement to see that resources are distributed more justly.
Nice take on Rand, I tried Atlas after reading about the guy who started Wikipedia. He was all into that stuff and I figured there must be something there. I never made it through and I thought the book was pure shit. I think you summarized this objectivist philosophy pretty well because the only use it really serves at this point is the defense of selfishness. Another one of those dumb shits that the teabaggers are coerced into loving is Adam Smith and his amazing “invisible hand”. What a joke! He had a fancy way of saying that when you are selfish, it tends to work out that you help everyone even though you were never concerned about their welfare. Hey, just a thought. wish you were in Knoxville when Palin takes the stand… It has the perfect setting for one of those Mencken/Twain type stories you are so good at… I really like how you hit at the root of this teabagger movement, too.
Adam Smith foresaw some of the problems that naturally arise with capitalism and could see the need for intervention by the government at times.
In response to another comment. See in context »Have you read Adam Smith? His “admirers” often distort what he said. It seems to me that they purposely misunderstand him, which is a shame.
In response to another comment. See in context »An “octopus wrapped around the face of humanity” as one journalist put it; the New World Banking Order has arrived. In 2009 speculative, uncontrolled derivatives were the Worlds largest market at an estimated 600 Trillion. The Worlds total economic output was an estimated 58.07 Trillion and the total World bond market was an estimated 82.2 Trillion. Yet, there is no “crime” that the bankers can be charged with as they bankrupt citizens and Nations into the New World Order?
The appropriate criminal charge should be Treason to the American People and our Democratic Republic and Constitution. The members of the Trilateral Commission and the Bilderberg Group in government and banking who conspired to overthrow our soverenity as an independent nation, who conspired to bankrupt our Treasury with three unjust Wars and multinational corporate “rolling” bailouts, conspired to control mass media “free Press” propaganda, conspired and manipulated “financial crisis” for their own gain, conspired to “relocate” American manufacturing/industry and technology, conspired to offshore “American Income Tax”, and who have conspired to enslave American citizens with National debt (about $64,000 per citizen) and personal debt. Deserve the death sentence by firing squad for Treason.
Obama, your New World Order is Totalitarian and we Patriots, American free citizens, will fight for our Democracy, Independence and Freedom.
“Obama, your New World Order is Totalitarian and we Patriots, American free citizens, will fight for our Democracy, Independence and Freedom.”
Yeah, until a white Republican is back in power, then you’ll forget all about democracy, independence and freedom. Oh, and please learn the difference between common and proper nouns.
In response to another comment. See in context »Yuh know, it’s all right to think about what I said, and object. If you don’t want to agree there is an absolute morality imposed by a self-revealing God(in the Bible), and if you don’t agree that He is either a nut, or a liar, or He told the Truth, and there are no other alternatives, then you are stuck with your personal worldview, and good luck with that. Man’s strife is a result of his disobedience. If we loved God and our neighbor there would not be wars. Hitler and Stalin were not Christians. Lots of other evil has been done in name of Christ, that doesn’t mean He did it. I was kind of pointing out that Ms. Rand was one of many writers who did not want to acknowledge an Absolute. True Christianity says we will give up our earthly lives for a heavenly one, and it’s better to give up our own life that take the life of someone else. Really. Situational ethics is for sissys. -I vote for hairy-backed John Paulson.
The reply above was meant to be an answer to “trendisnotdestiny” at 6:56 pm on 4/25/10. I enjoy the transaction of ideas on this interwebs, and I want to thank Matt for doing the hard work of training his pen and mind to get his thoughts across that make an impact on people and ideas. Matt, I admire your writing ability.
In response to another comment. See in context »opsimath,
First, I appreciated you reply which required, in my mind, some integrated thinking…
When I am reading Matt’s blog, I guess I am less concerned about God’s existence and more reactive to thinking in absolutes; The people I admire the most admit mistakes, have and share their pain, and are humble in the face of certainty…. organized religions often does not resemble this when asking to pass the hat for money…..
While I disagree with your certainty (unproven) that God is more likely a HE than a SHE; I’ll fight for your right to say it….
Anywho, I admire anyone in this environment that can trust in something so much that alternate beliefs are suspended; I tend to think it is exhausting reminding me that if religion were finances; we’d all pretty well be
complicit with nearly half of the worlds’ population living on less than $2/day…..
Well we prolly shouldn’t worry about that; he is our god, he’ll help us out because we believe…..
In response to another comment. See in context »[...] WіƖƖ Goldman Sachs Prove Greed іѕ God? – Matt Taibbi – Taibblog &… [...]
Hairy-backed boybands?
“The world is divided into those who realize that their fortune in life has a more to do with dumb luck rather than diligence and hard work and those who flatter themselves with the belief that they are masters of their destiny.”
Larry, I have to wonder how you live your life health wise with your philosophy. Seeing as how there is nothing but dumb luck that dictates success/health in life, do you smoke, not exercise, drink to excess, do illegal drugs, and drive on the left side of the road?
Your point is good. I overstated my case for sure. Still, the universe is probably more random than many of us like to believe. I mean, I could have been born in Liberia. I imagine my life would have been very different.
In response to another comment. See in context »And– yes (not a huge amount, mind you), no, no, no, no. I wear my seatbelt too. If I do feel like driving on the wrong side of the road, it makes it a little safer.
It’s understandable, but I’m pretty sure the vast majority of people opining on this civil suit don’t have a handle on the process.
Somebody made a complaint to the SEC about this. Maybe more than one somebody. Undoubtedly someone who loss a hell of a lot of money on the deal, and by the time both the extent of the loss and it’s irretrievability were realized, came to know of John Paulson strutting around like no tailor on the planet could make an inseam big enough for him, and put it together. I should think probably that somebody is answerable to a large European government authority which bailed out his company.
SEC is supposed to follow up such complaints. We’re are led to understand they don’t always — or didn’t always, under the Bush era leadership of Christopher Cox [see Madoff; see "Sir" Allen Stanford], or maybe never didn’t much at all under Cox. But it’s supposed to — as part of its function.
I should think this complaint would have been lodged sometime in early 2008 at the very earliest, rising as it would have had to from the ashes of the deal and the investor’s autopsy. Actually, I would think it more likely the complaint came far later: sometime after the events of September 18 and the panicked atmosphere that followed for weeks. Indeed, it would not surprise me at all to learn of it being lodged after the presidential election, given particularly uncomfortable, even wince-inducing, experiences certain personages in said European government authority had with the last Bush who will ever be elected dog catcher in this country.
So SEC would make an initial contact with GS — which clearly didn’t resolve the matter. What … a … surprise.
Then the SEC would — should — follow up, say with a letter — which would articulate the complaint, formalize the SEC’s interest and set out with some precision the questions SEC had at that point, the people it wished to discuss the matter with, and documents to support any response from GS.
The process through those first 3 steps alone would exhaust weeks, perhaps months; after all, the new administration was just then clearing its throat, and didn’t even have it’s own appointees confirmed to the SEC — the latter being a common bureaucratic reaction since at least Thomas Cromwell’s day in setting up a more-or-less professional bureaucracy under Henry VIII.
Then there would be communications effecting stalls, mostly on the part of GS, mostly couched in the need for ‘clarification’ on particular ‘points’, and on the purpose of the SEC’s ‘quite unprecedented [over the 8 years preceding it] action’ in even demanding an explanation. That could eat up weeks, so we’re deep into 2009.
Eventually SEC investigators would be despatched to visit the GS Vaulthalla, and the fencing would turn verbal. I expect there were several such visits, followed up by increasingly insistent letters from the SEC and increasingly entrenched positions from GS. Weeks, I tells you; maybe months.
These complaints eventually reach the point where they get listed on the agenda of the meetings of the membership of the SEC. I’m surmising here, but it’s quite normal for a panel to err on the side of giving the subject of the complaint, now investigation, a further chance to behave, urged along by a letter from the Enforcement division explaining all this — effectively if not actually warning the subject as to the next and subsequent steps in the process.
I doubt GS would be any more impressed with a communique from no stinkin’ SEC Enforcement division than it would be from no stinkin’ SEC investigators, and make such sentiment known, couched in whatever diplomatic language of which GS may be capable.
And so the next regular meeting of the SEC would come up on the calender, with the item still on the agenda, but now for a report not from the investigators but the Enforcement Division, and that would be met with at least some … disappointment.
The upshot would be a VERY formal, VERY carefully worded letter from the chief management of the SEC, possibly even the Chief herself [after a vote which may not have been as close as the vote to file the civil suit], which I would think would have been conveyed during the most recent snowy season.
I also expect that, sometime in this long, drawn out process, the SEC evinced an interest in discussing the matter with the Fabrulous One himself, Fabrice Toure, described as being at the heart of the GS bottom of the overall deal. GS could say “why?” for a while; then “he’s on vacation”; then “he’s dead”; then, “oops, sorry, he’s not dead; he’s overseas”; then “London, actually” — can’t travel, poor fellow — gimpy leg you know; then “thing of it is, he’s not paid his cellphone bill for a while now”; and eventually: “ahh…no — you see you’ve alarmed poor Fabrice, and us too we might add, so he’s, how do they put it there, barristered-up”.
All of which just COULD impress certain members of the SEC as stone-walling, obstructionism, being f***ed over, what-have-you.
And THAT is the condition in which the matter would be when it returned to the SEC for the fateful vote to file or not.
I suggest that I need not dwell on speculating into the potential discussions and motivations of the SEC members, but I do note in passing that the vote was, as they say, ‘partisan’ and the tie broken by the independent — which is a lot more consistent with showing support for resolving bureaucratic frustration and taking the only available action in light of immovable hubris on the part of the subject of the complaint, than it is with any grand unified conspiracy theory.
Matt is quite correct that the matter is as narrow as he describes it. It’s very much not the fault of the SEC that it is obliged by law to set out sufficient particulars to put the matter into proper context, which also happens to be vastly more than sufficient to set off relative firestorms in the investment world and the blogosphere.
In concluding, I put 3 questions:
[1] How many times does an entity under the authority of the SEC need to be told there’s a new sheriff in town before it listens?
[2] Why is that GS just produce Fabrulous to the SEC investigators?
[3] WTF?
In haste I posted the above with Question 3 in a state worthy of Goldsachian obtuseness.
The question, I trust you’ve gathered, was intended to read:
“Why is that GS doesn’t just produce Fabrulous to the SEC investigators?”
For utmost clarification, note the added word: “doesn’t”.
Please accept my apology for any misunderstanding.
Paragraph ten, first sentence, before “business partners.”
I’ve found that devout Randians come in 2 basic flavors, under-25 year-old and over-25 year-old.
When confronted with the under-25 Randian I will cut them some slack, because as every human-being grows up and develops their individual personalities they will invariably go through an ego-centered stage where the sociopathic sensibilities of Ayn Rand will make some sense to them. Eventually, most of these nascent Randians toss aside the puerile absurdities of Randism, rejoin normal human society, and grow into mature mentally-healthy adults.
It is the over-25 Randians who are irredeemably beyond hope. They are incapable of understanding that human-beings are social creatures whose complex civilization is a product of humans working together for the common good as opposed to the absurdly primitive and uncivilized barbarism of narcissistic self-adoration that is Randism. They are unable to become normal mature adult human-beings who develop their individual personalities strictly in relation to the society at large. There is no individual human who exists outside of the society that birthed them.
Which is why I always slowly back away from the mentally deranged sociopathic over-25 Randian. They are a danger to themselves and to society.