Audit Notes: Taibbi on TBTF, the paranoid rich, Olympics

An NYT op-ed elides some critical context

It’s unclear why The New York Times is running op-eds on finance from a guy who is still operating under an SEC ban as part of a settlement in a kickback investigation. But Steve Rattner, Obama’s former car czar, gets prime space to argue that Too Big to Fail banks should remain Too Big to Fail.

A bit of recent history: none of the institutions that toppled like dominoes in 2008 — the investment banks Bear Stearns and Lehman Brothers, the mortgage-finance giants Fannie Mae and Freddie Mac, the insurance company American International Group — were commercial banks.

Matt Taibbi rips this apart:

Not just some, but many of the institutions that “toppled like dominoes” in 2008 were giant commercial banks of the TBTF type. Does Rattner remember Washington Mutual, which was only the sixth-largest commercial bank in America when it collapsed in 2008? How about Wachovia, the fourth-largest?

More to the point, does he not remember all of the other commercial banks that required massive federal bailouts to avoid “toppling like dominoes” that year?…

Rattner wrote some other crazy things. He said, “it is wrong to think we can shrink [banks] to a size that eliminates the ‘too big to fail’ problem without emasculating one of our most successful industries.”

One could go on at length in answering this ludicrous passage, pointing out for instance how insane it is for Rattner to call TBTF banking “one of our most successful industries” when the business is now known all over the world to be so totally corrupt that nobody was even surprised when they found out that global interest rates were being manipulated.

— Jessica Pressler’s New York profile of paranoid billionaire Democrat Jeff Greene is fascinating:

It’s hard to think of any superrich person as vulnerable, just as it’s hard to think that a bear with outstretched claws and giant teeth is more afraid than you are. But over the past few months, it’s become clear that rich people are very, very afraid. Sometimes it feels like this was the main accomplishment of Occupy Wall Street: a whole lot of tightened sphincters. It’s not a stretch to say many residents of Park Avenue harbor vivid fears of a populist revolt like the one seen in The Dark Knight Rises, in which they cower miserably under their sideboards while ragged hordes plunder the silver.

“This is my fear, and it’s a real, legitimate fear,” Greene says, revving up the engine. “You have this huge, huge class of people who are impoverished. If we keep doing what we’re doing, we will build a class of poor people that will take over this country, and the country will not look like what it does today. It will be a different economy, rights, all that stuff will be different.”

More often than not, fears like these manifest as loathing for the current administration, as evidenced by the recent wave of Romney fund-raisers in the Hamptons. “Obama wants to take my money and give it to do-nothing animals,” one matron blurted at a recent party at the Pierre for Dick Morris’s Screwed!, the latest entry into a growing pile of socioeconomic snuff porn geared toward this audience.

There’s a prime anecdote about Niall Ferguson and the piece ends with Greene talking about the gates he’s installing to thwart the “50,000 angry people coming across the river” he thinks could come someday.

My only beef is this piece should have been given more space.

Ad Age’s Simon Dumenco slams the Twitter echo-chamber complaints about NBC’s tape-delayed Olympics coverage:

There’s something insanely white-collar elitist media circle-jerkish about all this whining about tape delays. Think about it: Some people are throwing hissy fits because NBC is showing tape-delayed events during American prime time, and in some cases those people — horrors! — have already found out who won those events via news reports and social media. If you want to watch all the live streams of events during the day via as they actually happen in London, you have to be able to authenticate that you have a cable, satellite or telco TV subscription that includes MSNBC and CNBC. (Unless, of course, you’ve taken Mashable’s advice to seek out bootleg streams.) But wait a second. How many people in America who are gainfully employed have the sorts of jobs where they can actually stop working during the day if they feel like it and instead watch the Olympics at their desks? For starters, I guess, cranky-ass bloggers who can set their own hours. But beyond the media bubble, how many white-collar office workers — let alone blue-collar workers — can really devote endless hours during the work day to watching the Olympics?

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at Follow him on Twitter at @ryanchittum. Tags: , , ,