Is Goldman Evil?

Some weeks ago, I read a mediocre rant about the alleged “evils” of Goldman Sachs. I rolled my eyes at yet another knee-jerk-populist, unproductive reaction to the recession. The next day at the gym, Chris Matthews had the author, Matt Taibbi, on, and began drooling all over him as some kind of investigative tour de force. The meme caught on. Not only has Taibbi been on TV nonstop, but friends who usually scrunch their noses in confusion at my business-journo world have been chatting me up constantly about the Goldman conspiracy and crediting Taibbi with discovering it. Allow me to correct the record.

According to Taibbi, Goldman Sachs deliberately inflates speculative bubbles by finding or manufacturing securities out of worthless assets and selling them to the public as secure; then they  get themselves out before it crashes; or, they rely on high-placed alumni to to save them. Moreover, they’ve done so in “every major market manipulation” of the last century. His case studies: The Great Depression, the DotCom Boom, the Housing Boom, the Commodities Boom (ie high gas prices), The Bailout, and (coming soon to a theater near you), Cap and Trade. This argument, which I’ve summarized in one paragraph, takes Taibbi  (get this!) 10,000 words. I’m going to explain why he’s a hack in 1/10 the space. Still a long post, for which I apologize. Read the rest of this entry »