Mainstream financial journalism is doing its level, eye-rolling, heavy-sighing best to stuff Matt Taibbi back into the alt-press hole he came from, but he’s not going along with it, and the mainstreamers in any case are making a big mistake.
The Rolling Stone writer cemented his status as the enfant terrible of the business press with “The Great American Bubble Machine,” a 10,000-word excoriation of Goldman Sachs, a muckraker’s-eye view of Goldman history, exploring the bank’s and Wall Street’s contributions to various financial disasters, starting with the Great Depression, skipping to the Tech Wreck, the Mortgage Wreck, the oil bubble of 2008, the bailout, and the looming cap-and-trade plan. Salted with “fuck”s, “shit”s and written with brio and hyperbole in the New Journalism tradition, it caught the financial community, which very much includes the financial media, utterly off-guard, unused as it is to hearing its flagship described as a “giant vampire squid wrapped around the face of humanity.”
Financial cognoscenti quickly sought to dismiss the piece as so much conspiracy-mongering perpetrated by a financial illiterate. Funny, but that illiterate’s piece ran more than a month ago, and people can’t stop talking about it. Perhaps not coincidentally, it feels like the general financial news has been all-Goldman, all-the-time ever since.
Ex-Deal and Wall Street Journal staffer Heidi Moore stepped into a buzzsaw last week week when she wrote one of the biggest non-sequiturs of the financial crisis, a column in Slate’s Big Money arguing that Goldman’s success comes from the fact it’s better at what it does than everyone else, therefore, apparently, criticism is unwarranted.
Will Everyone Please Shut Up About Goldman Sachs? The bank has a culture that works. So what?
As Taibbi (who needs no help defending himself) pointed out on his own blog, Moore addresses precisely none of the substantive criticisms that have been leveled at the bank, including big ones, like (1) buying predatory loans, (2) selling defective mortgage-backed securities while (3) shorting them at the same time, and (4) buying defective insurance from American International Group, then having those bad bets redeemed in full by government programs ratified by ex-Goldman executives. This is to say nothing of the role ex-Goldman alums played in laying the groundwork for the decade’s financial recklessness—Robert Rubin’s contribution to deconstructing financial regulation and Henry Paulson’s lobbying to loosen capital restrictions in 2004, to name just two.
Or, as Taibbi put it:
And the winner of this month’s Most Retarded Horseshit Written In Defense of Goldman Sachs award goes to… Heidi Moore at Big Money! Come on down, Heidi!
CNBC’s Charlie Gasparino pulled out all the bizpress cliches—Taibbi is not just “dead wrong” but “pretty naive” believed by “half-literate bloggers” (you can add your own eye rolls)—but has to misread Taibbi in order to dismiss him. He says Taibbi says “Goldman either single-handedly or with very little help, was responsible for the financial crisis.” But that’s not what Taibbi actually says, as we’ll see below.
RealClearMarkets’s eyes rolled practically back in its head in this attempted takedown (many things are “laughable,” “laugh-inducing,” etc.—yuck, yuck), pointlessly pointing out, among other things, that other parties were on the other side of Goldman trades, therefore, apparently, everything’s okay. Nothing to see here, folks.
(And yeah, Goldman is an Audit funder, having given us $25,000, or about 10 percent of this year’s budget. What can you do? Deal columnist Yvette Kantrow weakly accused The Audit a few weeks ago of being in the tank for Goldman. Our response to that irresponsible cry for attention is here and here.)
A better use of all this expertise, I’d say, would be to probe what the right Goldman story might be, rather than dwelling on what they think is the wrong one. We’ll be keeping an eye out for those.
The more general reaction to Taibbi’s piece was all over the place and ranged from this rapid and complete dismissal by mainstream-media types leveling their usual charge—”simplistic”—as well as others who found the idea of trying to put any one institution, even Goldman, at the center of a century-long scheme to inflate and profit from bubbles, preposterous on its face. Another camp could express nothing but gratitude that someone had taken on directly an important actor with a sense of fury proportionate to the scope of the financial crisis—“finally!” And then there was the largest camp, people who just said: “Wow, look at that.”