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Friday, July 3, 2009

More on the Goldman story...



This is just too good! Here are some more excerpts for your enjoyment:

"But then, something happened. It's hard to say what it was exactly; it might have been the fact that Goldman's co-chairman in the early Nineties, Robert Rubin, followed Bill Clinton to the White House, where he directed the National Economic Council and eventually became Treasury secretary. While the American media fell in love with the story line of a pair of baby-boomer, Sixties-child, Fleetwood Mac yuppies nesting in the White House, it also nursed an undisguised crush on Rubin, who was hyped as without a doubt the smartest person ever to walk the face of the Earth, with Newton, Einstein, Mozart and Kant running far behind.

Rubin was the prototypical Goldman banker. He was probably born in a $4,000 suit, he had a face that seemed permanently frozen just short of an apology for being so much smarter than you, and he exuded a Spock-like, emotion-neutral exterior; the only human feeling you could imagine him experiencing was a nightmare about being forced to fly coach. It became almost a national cliché that whatever Rubin thought was best for the economy — a phenomenon that reached its apex in 1999, when Rubin appeared on the cover of Time with his Treasury deputy, Larry Summers, and Fed chief Alan Greenspan under the headline the committee to save the world. And "what Rubin thought," mostly, was that the American economy, and in particular the financial markets, were over-regulated and needed to be set free. During his tenure at Treasury, the Clinton White House made a series of moves that would have drastic consequences for the global economy — beginning with Rubin's complete and total failure to regulate his old firm during its first mad dash for obscene short-term profits."


And this...

After the oil bubble collapsed last fall, there was no new bubble to keep things humming — this time, the money seems to be really gone, like worldwide-depression gone. So the financial safari has moved elsewhere, and the big game in the hunt has become the only remaining pool of dumb, unguarded capital left to feed upon: taxpayer money. Here, in the biggest bailout in history, is where Goldman Sachs really started to flex its muscle.

It began in September of last year, when then-Treasury secretary Paulson made a momentous series of decisions. Although he had already engineered a rescue of Bear Stearns a few months before and helped bail out quasi-private lenders Fannie Mae and Freddie Mac, Paulson elected to let Lehman Brothers — one of Goldman's last real competitors — collapse without intervention. ("Goldman's superhero status was left intact," says market analyst Eric Salzman, "and an investment-banking competitor, Lehman, goes away.") The very next day, Paulson greenlighted a massive, $85 billion bailout of AIG, which promptly turned around and repaid $13 billion it owed to Goldman. Thanks to the rescue effort, the bank ended up getting paid in full for its bad bets: By contrast, retired auto workers awaiting the Chrysler bailout will be lucky to receive 50 cents for every dollar they are owed.

If you're having a "Tea Party" over this Fourth of July weekend, don't forget to rally your friends and colleagues for a revolt against Goldman Sachs' influence on our policy making. Goldman officials and officers should be barred from ever being in high Government posts!

4 comments:

  1. WHY NOT TRACK DOWN ALL THE TAX FREE TRADING HOUSINS IN THE CARRIBEAN THAT ARE CONNECTED TO GOLDMAN SACHS ?

    LIKE SHELL OIL'S IN BARBADOS ?

    I AM SURE YOU WOULD FIND SOME TAX DODGERS ON THE HOOK !

    THERE ARE NOT ENOUGH BRIDGES, ROADS, SCHOOLS, CHURCHES THAT NEED TO BE BUILT TO SHOVEL THE ECONOMY OUT OF THIS ONE.

    AND PELOSI GOES TO ITALY TO SELL OUT CHRYSLER TO THE FIAT MAFIA.

    ReplyDelete
  2. here is an email I sent to NY times columnist Frank Rich who used the "tax payer on the hook" phrase :

    _________________

    You are out of paradigm on economics.

    Taxpayers are not on the hook since tax revenues are never collected before spending ( misnomer: tax and then spend ),
    and that these are credits made via the banking system which are paid back by those central banks who receive the credits
    with interest payments. The Fed Res & Tsy make forex swaps ( something you would never be able to comprehend and report on nor anyone at NY Times ) such as those made last fall when the Fed made hundreds of billions of profits in forex swaps, plus there is buying of toxic assets and selling them later like the S&L crisis of the late 80's which were sold in the 90's with a profit.

    Tax payer on the hook is a smoke screen for liberals and conservatives and actually blends them into this false out of paradigm thinking which is destroying the recovery. This moniker encourages policticians to seek to balance the budget as did FDR in 1938 and this created a huge slide into the depression just after the sprouts came out - people like you cut back and the sprouts shrivelled.

    You should begin with Mike Norman :

    mikenormaneconomics.blogspot.com
    www.pitbulleconomics.com

    ______________________

    ReplyDelete
  3. mr Scott

    I am going to create a template letter and just fire it off to all columnists and pundits.

    I probably will not need to change anything - everyone uses these monikers that are catchy.

    ReplyDelete