
The Great American Bubble Machine (Goldman Sachs exposé) - zackattack
http://sites.google.com/site/disclosuredelta/
======
chasingsparks
This article has been submitted probably a dozen times, each time failing to
spark a discussion. I assume in the context of what's going on with the SEC,
it's more appealing now.

That being said, this article -- like most of Taibbi's -- is a well-written,
entertaining narrative that sews together selective elements to construct
something plausible. Go one step further by looking at the environments of
each "bubble" to get a less filtered context -- what other companies were
doing, what economic forecasters were saying, etc -- and it falls apart
quickly.

Goldman Sachs is a company comprised of smart people. Sometimes elements of
the company get involved in shaddy things. That happens everywhere -- finance,
government, gumball manufacturers.

Interestingly, John Galbraith's chronicle of the crash of '29, did detail
perhaps the most egregious of the young company's offenses. He also said: _Our
political tradition sets great store by the generalized symbol of evil. This
is the wrongdoer whose wrongdoing will be taken by the public to be the secret
propensity of a whole community or class. We search avidly for such people,
not so much because we wish to see them exposed and punished as individuals,
but because we cherish the resulting political discomfort of their friends. To
uncover an evil man among the friends of one's foes had long been a recognized
method of advancing one's political fortunes. However, in recent times the
technique has been greatly improved and refined by the added firmness with
which the evil of the evildoer is now attributed to friends, acquaintances,
and all who share his way of life._

------
tptacek
Dupe:

<http://searchyc.com/bubble+machine>

Incidentally, Megan McArdle's takedown of the article is more interesting than
the article itself (and I actually like Taibbi, when he's not writing about
finance):

[http://www.theatlantic.com/business/archive/2009/07/matt-
tai...](http://www.theatlantic.com/business/archive/2009/07/matt-taibbi-gets-
his-sarah-palin-on/21084/)

~~~
madair
I think most people except those who are compromised by Wall St. influence
consider Megan McArdle more of an apologist for Wall St. and laissez faire in
general than as someone who did any sort of "takedown". Read closely, it's a
pretty weak article, it's whole premise rests on criticisms of the delivery
and attempts to bring reasonable doubt to a debate that has very little
reasonable doubt about systemic abuse of public good faith by the big
financial players.

~~~
tptacek
I'm a liberal regs-enthusiast cap-D Democrat who's been reading McArdle since
she landed at the Atlantic (so: awhile) and I just don't agree with your
assessment of her. She's going to sound like an apologist because she's a
UofC-trained conservative-leaning libertarian. That doesn't make her an actual
apologist.

In fact, when you read the article, you probably saw that she concluded it by
saying that GS deserves the populist outrage (she hasn't been talking down the
recent SEC suit, either). I think it's hard to argue that she's criticizing
Taibbi because of ideology.

No, her problem with Taibbi is that he doesn't appear to know what he's
talking about. These aren't critiques on "delivery". Taibbi's article is
premised on the idea that GS orchestrates calamities to profit from them. He
appears to have drawn that conclusion from the fact that GS has survived many
calamities. But McArdle appears to be correct: GS survives calamities because
they don't go all-in the way firms like Lehman, Bear, and (it's alleged)
Merrill did.

If GS is no worse than Lehman, Merrill, Morgan, or Citi, Taibbi's argument is
damaged. If GS comes out ahead of them because it acted more carefully and
less irresponsibly than those banks, Taibbi's argument is more or less
destroyed. The fact that Taibbi doesn't seem to know the difference between a
CDO and an IRS is amusing but besides the point.

------
adrianwaj
I posted this 5 days ago but no upvotes or comments. It might be the plaintext
format that makes this version more appealing, because it is a large read.

------
gorm
Definitive worth the read if economy is your cup of tea. Thanks for posting.

