Day: July 14, 2009

As a supplement to Matt Taibbi’s article — described and linked to in the previous post — I thought this paragraph from George Packer in a February article in The New Yorker about Florida’s foreclosure disaster — “The Ponzi State” — was particularly apropos.

Dan knew that his plight was the result of rising unemployment in a bad economy that was shedding the few remaining manufacturing jobs. In Hillsborough County, forty-eight thousand people had no work. And yet, in pondering the cause of his trouble, Dan couldn’t avoid the feeling that the world had singled him out for some terrible payback, that it must have been his fault, that the failure was his alone and he had no right to anyone else’s help. It occurred to me that this was an attitude that no senior figure on Wall Street had adopted.

Matt Taibbi’s controversial report on Goldman Sachs, The Great American Bubble Machine, came online in full today, coincidentally the day Goldman announced second-quarter profits of $3.44 billion. I haven’t read the article yet — I am about to — but I know it’s important reading to understand the economic world in which we live. As Taibbi writes, “It is a history exactly five bubbles long….” [It’s funny, informative, important and deserves your time.]

Here’s the second paragraph to possibly whet your interest.

By now, most of us know the major players. As George Bush’s last Treasury secretary, former Goldman CEO Henry Paulson was the architect of the bailout, a suspiciously self-serving plan to funnel trillions of Your Dollars to a handful of his old friends on Wall Street. Robert Rubin, Bill Clinton’s former Treasury secretary, spent 26 years at Goldman before becoming chairman of Citigroup — which in turn got a $300 billion taxpayer bailout from Paulson. There’s John Thain, the asshole chief of Merrill Lynch who bought an $87,000 area rug for his office as his company was imploding; a former Goldman banker, Thain enjoyed a multibilliondollar handout from Paulson, who used billions in taxpayer funds to help Bank of America rescue Thain’s sorry company. And Robert Steel, the former Goldmanite head of Wachovia, scored himself and his fellow executives $225 million in goldenparachute payments as his bank was selfdestructing. There’s Joshua Bolten, Bush’s chief of staff during the bailout, and Mark Patterson, the current Treasury chief of staff, who was a Goldman lobbyist just a year ago, and Ed Liddy, the former Goldman director whom Paulson put in charge of bailedout insurance giant AIG, which forked over $13 billion to Goldman after Liddy came on board. The heads of the Canadian and Italian national banks are Goldman alums, as is the head of the World Bank, the head of the New York Stock Exchange, the last two heads of the Federal Reserve Bank of New York — which, incidentally, is now in charge of overseeing Goldman — not to mention …

Taibbi’s description later of Robert Rubin is laugh-out-loud funny.