Archive for July 12th, 2009

When a music magazine takes on Goldman Sachs

12 July 2009

It is probably applicable to other spheres of journalism as well, but it is surely no exaggeration to state that business journalism has completely lost the ability to tell it like it is.

Unless, it is some small, worthless, unimportant target.

Reporters, writers and editors, fearful of losing “access”, are held hostage by PR, freebies, and worse. Publishers and proprietors, trying to squeeze every dollar, are indebted to advertising. Etc.

Result: readers, viewers, listeners, surfers are served up numbers and theories held up by hope.

Little wonder it took a comedian (Jon Stewart) to buttonhole a “mad” CNBC anchor (Jim Cramer).

Little wonder it has taken a music magazine to throw light on the “great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.”

Take a bow, Matt Taibbi (in picture).

The Rolling Stone columnist, who has been compared to Hunter S. Thompson, sticks a long, sharp knife into the investment bank in the latest issue of the magazine, calling it a “planet-eating Death Star of political influence”, accusing it of engineering every major market manipulation since the Great Depression of 1929.

The internet bubble, the housing bubble, the oil-price bubble, and the coming “carbon-credit” bubble (hello, Jairam Ramesh) are all the handiwork of Goldman Sachs, writes Taibbi, accusing the company of an incestuous old boy network to shut out competitors, prevent regulation, and stay out of trouble in perpetuity.

“They achieve this using the same playbook over and over again. The formula is relatively simple: Goldman positions itself in the middle of a speculative bubble, selling investments they know are crap. Then they hoover up vast sums from the middle and lower floors of society with the aid of a crippled and corrupt state that allows it to rewrite the rules in exchange for the relative pennies the bank throws at political patronage. Finally, when it all goes bust, leaving millions of ordinary citizens broke and starving, they begin the entire process over again, riding in to rescue us all by lending us back our own money at interest, selling themselves as men above greed, just a bunch of really smart guys keeping the wheels greased.”

Goldman Sachs responded to Taibbi’s article through Reuters blogger Felix Salmon, calling the Rolling Stone piece “hysterical”; “a compilation of every conspiracy theory ever dreamed up about Goldman Sachs”.

“We reject the assertion that we are inflators of bubbles and profiteers in busts, and we are painfully conscious of the importance of being a force for good,” Lucan Van Praag, Goldman Sachs’ top flack, writes.

Matt Taibbi responds in kind, answering every spineless reporter/editor’s feeble excuse about “giving the other side a chance”, about being “balanced” and “objective”.

“My feeling is that companies like Goldman Sachs have a virtual monopoly on mainstream-news public relations; for every one reporter like me, or like far more knowledgeable critics like Tyler Durden, there are a thousand hacks out there willing to pimp Goldman’s viewpoint on things in the front pages and ledes of the major news organizations. And there are probably another thousand poor working stiffs who are nudged into pushing the Goldman party line by their editors and superiors….

“Goldman has its alumni pushing its views from the pulpit of the U.S. Treasury, the NYSE, the World Bank, and numerous other important posts; it also has former players fronting major TV shows. They have the ear of the president if they want it. Given all of this, I personally think it’s absurd to talk about the need for “balance” in every single magazine and news article. I understand that some people feel differently, but that’s my take on things.”

There have been even wild accusations of “anti-Semitism” in Taibbi’s piece (he is Arab-American) against “the most prototypically Jewish firm around.”

Taibbi has also been accused of picking on Goldman Sachs when there were plenty of other bandicoots with their hands in the loot, like, say, Morgan Stanley.

“Why didn’t we write about Morgan? Because we didn’t. Because it’s your turn, you assholes. Maybe later someone will tell the story of the other banks, but for now, while most ordinary people are only just learning about the workings of the financial innovation era that blew up in their faces last year, the top dog in that universe is going to be first in line to get the special treatment.”

Read the Rolling Stone article: The great American bubble machine

Read Matt Taibbi’s blog: Taibblog

Read an interview with Matt Taibbi

Visit Goldman Sachs’ unofficial blog

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