Friday, July 3, 2009

The Great American Bubble Machine

Matt Taibbi on how Goldman Sachs has engineered every major market manipulation since the Great Depression.

The first thing you need to know about Goldman Sachs is that it's everywhere. The world's most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.

Any attempt to construct a narrative around all the former Goldmanites in influential positions quickly becomes an absurd and pointless exercise, like trying to make a list of everything. What you need to know is the big picture: If America is circling the drain, Goldman Sachs has found a way to be that drain — an extremely unfortunate loophole in the system of Western democratic capitalism, which never foresaw that in a society governed passively by free markets and free elections, organized greed always defeats disorganized democracy.

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. They've been pulling this same stunt over and over since the 1920s — and now they're preparing to do it again, creating what may be the biggest and most audacious bubble yet.

Read the full story here.

7 comments:

DRL said...

RAC, I agree with you one hundred percent. The Banks have what is wanted and needed. They control more of the economy than most know. Everything that needs financed, goes through a bank. This includes governments. If memory serves me correct, it was City bank that funded the restructuring of Germany in the late 1920's. THIS IS NOT A COMPARISON OF GOVERMENTS OR HEAD OF STATES.
Secrecy in the banking industry is also a problem. The Federal Reserve controls what I can't see.
Sean is and has worked in this field and is our resident expert, I hope he can show a little light on it. Regardless, RAC, I agree with you.
When the country (Germany) collapse after WWII, they turned their interest to the U.S.. This was not Goldman Sachs, but I think I get your drift completely. If I missed it, try me again.
It is the "golden rule", "he with the gold, rules".

juliet said...

Creative history

Sean said...

Rolling Stone? Wow, far out man, the really have the unbiased reporting I look for. Have they ever reported on the Community Reinvestment Act? or how banks were strong armed into lowering standards? Or how - even after all of this mess - Chris Dodd is still pressuring banks to lower lending standards now (no reason to "learn a lesson" if you never take any responsibility for the mess in the first place).

Doug said...

The FED is the man behind the curtain.

rac said...

It's just a story Sean. Don't take it so personal. Geesh.

rac said...

Banks own the US government

Durbin On Congress: The Banks "Own The Place"

DRL said...

I told you Sean was and is the resident expert on this.