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Taibbi's Bubble Machine

| Mon Jul. 13, 2009 4:40 PM PDT

A few days ago I described Matt Taibbi's recent Rolling Stone piece about Goldman Sachs as "terrible." And it was! He made one outrageous assertion after another without bothering to back any of them up. He flitted from idea to idea without developing any of them. The whole piece was disjointed and embarrassing.

Except — it turns out there was a reason for that: the morons at Rolling Stone hadn't actually posted Taibbi's article. They had only posted a short series of excerpts. I would have known that if I'd read the introductory material very carefully, but who the hell does that? I didn't. I just read what they posted, came away shaking my head, and panned it.

Well, I've now the read the entire piece, and I apologize. (To Taibbi, that is, not the morons at Rolling Stone, who should have either posted the whole thing or done nothing at all.) It's a very good takedown of the modern financial industry and well worth reading. There are some bits here and there that I'm not sure Taibbi gets quite right, and I do think that he made a mistake in casting Goldman Sachs as the "engineer" of every bubble in the past century rather than merely an unusually big and enthusiastic member of a predatory gang that's been ripping us off for a long time. This gives the piece a conspiratorial air that allows Goldman to laugh it off instead of being forced to engage with it, and that's too bad. They — and everyone else on Wall Street — should be forced to engage with it.

Beyond that, there are undoubtedly some mistakes in the piece, as well as places where Taibbi goes unnecessarily over the top. I'm still not sold on carbon permits being the next big bubble, for example. But those are quibbles. Overall it's a striking portait of an industry — not just a single company — of almost unbounded greed and recklessness. Worth reading.

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Kevin Drum is a political blogger for Mother Jones. For more of his stories, click here.

Comments

I have to say I was

Submitted by Anonymous (not verified) on Mon Jul. 13, 2009 5:23 PM PDT.

I have to say I was surprised at something of Taibbi's being labelled terrible. I know he's only human, but that seemed unusually harsh.

goldman Sachs, Suoer-villain?

Submitted by beb (not verified) on Mon Jul. 13, 2009 5:48 PM PDT.

I suspect that if Taibbi hadn't made Goldman Sachs out to be a century long villain in the finance industry they would have been even more successful in ignoring him. By suggesting that GS forces other people to at least consider how muchGS's greed and recklessness has been behind economic troubles. He had to hit them hard for people to even consider what he's reporting might have some truth in it.

If you'd read your comments

Submitted by Model 62 on Mon Jul. 13, 2009 6:05 PM PDT.

If you'd read your comments you would have known that, too.

Who the Hell?

Submitted by AndrewBW on Mon Jul. 13, 2009 6:44 PM PDT.

"I would have known that if I'd read the introductory material very carefully, but who the hell does that?"

Uhm, well, *cough* I read the introduction.

cop out! yeah right, kevin,

Submitted by Anonymous (not verified) on Mon Jul. 13, 2009 8:05 PM PDT.

cop out! yeah right, kevin, you are a true economist through and thorugh. "life can't REALLY be like this, can it?"
it was obvious he was going on record in front of the entire country and if you'd have watched the 60 minutes piece on the oil bubble instead of wringing your economist hands you'd have intuitively known someone wouldn't stick their neck out that far without insight. fail!

Unlike oil or houses, if a

Submitted by Anonymous (not verified) on Mon Jul. 13, 2009 8:12 PM PDT.

Unlike oil or houses, if a bubble pushes the price of carbon permits up thats a good thing since they will certainly be underpriced by waxman markey. and if GS political muscle can keep the prices up all the better.

But it does point out the need for the climate bill to have strong steps to deal with volatility. I forget if it currently includes a top price safety valve. if it does then a bubble will have little traction and a bit of a bubble will be all to the good.

You don't say?

Submitted by PatP (not verified) on Tue Jul. 14, 2009 3:11 AM PDT.

You should know you don't get credit for alluding to unelaborated criticisms which intimate rather than delineate.

So, if there are "undoubtedly some mistakes in the piece" by all means get on with it. What are they then?

Waiting...

Greed is Good, sayeth Gordon Gecko

Submitted by Anonymous (not verified) on Tue Jul. 14, 2009 6:15 AM PDT.

"Overall it's a striking portait of an industry — not just a single company — of almost unbounded greed and recklessness."

I always smile when people call out Wall Streeters for being greedy and reckless. Oh, it's true all right, but that misses the point. Yes, greed and reckless behavior in the financial services industry nearly destroyed the nations economy. But most of it was completely legal and encouraged by the cultures of the respective firms.

That's the problem. And it's not being addressed or even discussed.

I think you get this

Submitted by Joesbrain (not verified) on Tue Jul. 14, 2009 7:12 AM PDT.

I think you get this right.

It was written in a provocative style that is probably well suited to Rolling Stone -- though I did find it odd being mixed in with their usual stuff.

Nonetheless, I would definitely agree that GS can not have every bubble pinned to them, though they seem to be eager players in most. The latest bubble, however, is where they became a leading player.

Having said that, GS now needs to go away. We need a trust-buster-in-chief to make these guys nothing but a bad memory. Anybody who can sleep at night knowing GS exists is not paying attention.

Just what we need - asset

Submitted by MacGruber on Tue Jul. 14, 2009 7:17 AM PDT.

Just what we need - asset bubbles for energy outside of oil. Can't wait for GS and the other titans to fiddle with electricity prices from coal or nuclear power; not being able to pay a monthly utility bill will do wonders for the GOP and should sink the Democratic Party into mediocrity for the better part of the century.

All the while, CO2 will increase, thanks to China and India.

At least the rising CO2 won't raise global temperatures. Ah science, when will liberals listen to you?

I'd bring up all the hidden gems in the Waxman Bill, like the trade tariffs and whatnot, but I'm betting a GOP Congress will eviscerate Waxman before the bill can do any long-term damage.

multigenerational fraud

Submitted by ericf on Tue Jul. 14, 2009 12:06 PM PDT.

"At least the rising CO2 won't raise global temperatures. Ah science, when will liberals listen to you?"

Right, because the greenhouse effect isn't real. It's this fraud perpetrated since the "discovery" of the greenhouse effect in the 19th century, and thousands and thousands and thousands of scientists for over a century have been fooling us so that long after they died, we'd still be falling for their trickery. But the deniers have seen through it! There is no greenhouse effect! In fact, I'm not convinced CO2 is real.

There might not even be such a thing as a greenhouse. Tell 'em Macgruber!
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