Wall Street's Bailout Hustle

February 22, 2010 12:23 AM

"The reality is that the post-bailout era in which Goldman [Sachs] thrived has turned out to be a chaotic frenzy of high-stakes con-artistry, with taxpayers and clients bilked out of billions using a dizzying array of old-school hustles that, but for their ponderous complexity, would have fit well in slick grifter movies like The Sting and Matchstick Men. There's even a term in con-man lingo for what some of the banks are doing right now, with all their cosmetic gestures of scaling back bonuses and giving to charities. In the grifter world, calming down a mark so he doesn't call the cops is known as the "Cool Off.""
posted by Pope Guilty (50 comments total)

I enjoyed the article; thanks for posting it. To Taibbi's airing of wrongs, I would add simply the note that the "global economic meltdown" was not a breakdown of the system but, rather, the perfect functioning of a system that will always work on its own behalf.

It's all those cons rolled into one. It's the Long Con; it's called industrial capitalism.
posted by cirripede at 1:07 AM on February 22, 2010 [15 favorites]

America is welfare state. A pity it's a corporate welfare state.
posted by PenDevil at 1:39 AM on February 22, 2010 [4 favorites]

.

Integrity of the banking system.
posted by Vibrissae at 2:09 AM on February 22, 2010

Expatriation looks better and better.
posted by koeselitz at 2:38 AM on February 22, 2010

I dunno. I read this description of this as a "long con," but what it looks like when they describe it is a bunch of people making short-sighted decisions based on what's (possibly, if things go well) good for them right now instead of what's smart.
posted by Scattercat at 3:01 AM on February 22, 2010 [2 favorites]

This awesome article tore apart my view of reality and gave me such a fiscal hard on that I knocked over my laptop stand and spilled my red bull all over. The spill pattern and tumbled laptop on my beige carpet resembled a fucking nativity scene in one of those desert countries and I realized that Tabbi was going to go raging through the temple toppling over the money lenders tables all the while collecting doubleclick ad impression payments like some modern day profane top 40 messiah with backstage access.

Either he is going to be killed by a mossad hit squad in lacoste tennis wear with a mix of foreign passports and pony tailed lookouts in a Las Vegas based knock off of a Dubai hotel or he is going to be discredited by a syndication deal with HuffPo where his columns will be sandwiched between B list celebrity silicone injected nipples slipping and cute puppies saving toddlers.

Meh Yeah! Sux to ur economies biatches.
posted by srboisvert at 3:18 AM on February 22, 2010 [22 favorites]

Taibbi makes a nice argument by comparing Goldman Sachs' game to other well-known cons. (He is unfortunately a bit too shrill and partisan and this gets in the way of an otherwise solid narrative.)

The thing about con games is that the victim always thinks - because you know he's in on the scam - that he can beat it. This is why I see people playing three shells on the street right under the sign put up by the police warning not to play; it's the same reason people go to the casinos; and it's the same reason suckers keep "investing" in Wall Street.

Is there any doubt that Wall Street will hand the taxpayers another ransom note? I mean, they got away with it once - and they didn't even have to kill the baby.
posted by three blind mice at 3:53 AM on February 22, 2010

Taibbi, for all his flaws, is not partisan, at least not in the normal sense. A major feature of the last few of his articles has been that the Obama administration is continuing business as usual, even hiring many of the people that are responsible for creating this mess. In his case, I think shrillness is a feature, not a bug, but I can understand some people being turned off by it. My personal feeling is that anyone who can learn about this stuff and not get mad is broken, although he obviously also enjoys a good rant.
posted by Humanzee at 5:19 AM on February 22, 2010 [2 favorites]

(He is unfortunately a bit too shrill and partisan and this gets in the way of an otherwise solid narrative.)

Partisan? You're suggesting there's a reasonable argument on the other side?

If so, I'm more than open to hearing it.
posted by IndigoJones at 5:39 AM on February 22, 2010 [5 favorites]

Wow. I knew before clicking it, it would be Taibibi.
posted by unSane at 5:40 AM on February 22, 2010 [1 favorite]

In other news, Taibbi legally changes name to Johnny One-Note, dares Goldman Sachs to stop him; a spokesman for the company is quoted as saying, "shine on you crazy diamond."
posted by Halloween Jack at 5:50 AM on February 22, 2010 [1 favorite]

"What is the state of our moral being when Lloyd Blankfein taking a $9 million bonus is viewed as this great act of contrition, when every penny of it was a direct transfer from the taxpayer?" asks Eliot Spitzer, who tried to hold Wall Street accountable during his own ill-fated stint as governor of New York.

Shut your fucking mouth you motherfucker. You were in the perfect position both politically and geographically to wield some corporate-castrating swords around your head and keep these fuckers in line. And then, like some mutant, multi-penised monster in a bad Hentai flick, you simultaneously fucked a hooker and America and ruined all hope.

So shut up.
posted by Civil_Disobedient at 5:51 AM on February 22, 2010 [17 favorites]

He can make up for it by running for governor again. I'll vote for him on the Working Families, Hookers, and Corporate-Castrating Swords line.
posted by You Can't Tip a Buick at 6:00 AM on February 22, 2010 [4 favorites]

C_D,

If not the hooker, then something else. I mean, at least this way he lives.
posted by effugas at 6:01 AM on February 22, 2010 [1 favorite]

I can't take what Taibbi says seriously. Can someone who knows what they're talking about please comment on this?
posted by empath at 6:08 AM on February 22, 2010

you simultaneously fucked a hooker and America and ruined all hope.

What is the state of our moral being when Eliot Spitzer is to blame for what Wall Street capitalism has done to America?
posted by DU at 6:09 AM on February 22, 2010 [9 favorites]

What's galling are our politicians, bought and sold for such a pittance, who rail against the very idea of regulation. Equating the "free market" with our supposed democratic "freedoms."

Who deny some 43 million of us health care because it's socialist while enjoying the best health care our government can provide.

Who receive this health care because they whored themselves out to the highest bidder and gerrymandered their districts relentlessly, turning even a 2 year term in the house into 30 plus year careers.

Distracting huge swaths of America with red herrings like gay marriage and terrorists, immigrants and the right to life.

All while the money handlers reward themselves by stealing everyone's fucking money.

The American experiment is dead, they are dividing the spoils at this moment, the shame is no one even seems to care.
posted by Max Power at 6:14 AM on February 22, 2010 [9 favorites]

So if I'm reading this right my options are:

1. Give my money to wall street and hope that they share some of the small fraction of profit they make.
2. Put money in a regular bank (owned by Wall Street) and lose a little bit to inflation every year.
3. Stuff money in mattress, hope I don't get robbed or have a house fire (and lose a little bit to inflation every year.)
4. Massive cocaine party.

Anyone have the number for those heroin pizza guys from the other post?
posted by ghharr at 6:21 AM on February 22, 2010 [2 favorites]

5. Donate your money to a(n actual) socialist candidate.
posted by DU at 6:24 AM on February 22, 2010 [2 favorites]

6. support a non-corporatist candidate (socialist or not).

I'm a 3 time Nader voter, but Pat Bucanan and Ron Paul would still be favorable to candidates from either party that are owned by Goldman-Sachs.
posted by 445supermag at 6:33 AM on February 22, 2010

This is an interesting recount of the financial crisis wrapped around a melodramatic metaphor, but lacking any new revelations. It makes a good case for how a lack of good financial regulation hurts the vast majority of Americans for the enrichment of a few, although it doesn't directly advocate a direction to focus any anger it stirs up.

Think I still prefer Planet Money for economic analysis and opinion, but this does make me want to go read The Big Con.
posted by GameDesignerBen at 6:39 AM on February 22, 2010

Max Power: The American experiment is dead, they are dividing the spoils at this moment, the shame is no one even seems to care.

It's interesting, and you're right. One of the most unfortunate (though predictable?) consequences of this generation-long campaign of economic terrorism against the middle and lower classes is the way it's seeded such widespread apathy and inertia. Terrorism is precisely what it is, because it not only kills us but also keeps us from imagining anything different. It's grotesquely beautiful, I guess, how this all-devouring, ever-growing consumer culture manages to do it—it robs people of their money, destroys their bodies and their psyches, and then clogs up any valves for real change.

It's a black hole. I don't know what we can do. I feel powerless.
posted by cirripede at 6:44 AM on February 22, 2010 [2 favorites]

Wow. Can't he get over it?
posted by Damn That Television at 6:47 AM on February 22, 2010

Dr. Ballsach

Excuse me while I snicker in the corner like a 12 year old boy.
posted by grapefruitmoon at 6:48 AM on February 22, 2010 [2 favorites]

* Ballsachs
posted by grapefruitmoon at 6:49 AM on February 22, 2010

when Eliot Spitzer is to blame for what Wall Street capitalism has done to America?

Fuck that noise. I didn't blame Spitzer for anything except ruining his chances to be relevant in the discussion. Spitzer could have been more historically important (and given his track record, more successful) than Obama in fixing the corporate chicanery that's been Wall Street's modus operandi for the past three decades.

I'm not going to blame Batman if the Joker blows up the city. But I'm going to be a little pissed if I hear it happened because Bruce Wayne decided to get shit-faced-drunk the night before.
posted by Civil_Disobedient at 6:53 AM on February 22, 2010 [6 favorites]

Excuse me while I snicker in the corner like a 12 year old boy.

Fast becoming America's pre-eminent Marvel Comics supervillain, the CEO used the call to deploy his secret weapon: a pair of giant, nuclear-powered testicles. [...] Still, the troops were worried: There were rumors that Dr. Ballsachs, bowing to political pressure, might be forced to scale the number back.
posted by MuffinMan at 6:56 AM on February 22, 2010

I feel genuine pity for all the rapacious money addicts who run Goldman, I really do. Imagine being so chronically insecure that making a billion dollars more than some other pathetic contribute-nothing empty suit actually matters to you.

Poor sick blind stupid bastards.
posted by flabdablet at 7:07 AM on February 22, 2010

The Doomsday Cycle:

This column suggests a 'doomsday cycle' has infiltrated the economic system and could lead to disaster after the next financial crisis...

Over the last three decades, the US financial system has tripled in size, as measured by total credit relative to GDP. Each time the system runs into problems, the Federal Reserve quickly lowers interest rates to revive it. These crises appear to be getting worse and worse – and their impact is increasingly global.

posted by TheophileEscargot at 7:12 AM on February 22, 2010

Now featuring on Boingboing a comprehensive book about the crisis written by novelist John Lanchester. As I understand about the UK economy (which doesn't fare much better than the US), with links to the US economy.
posted by charles kaapjes at 7:27 AM on February 22, 2010

An aside. I am reminded of an economist a few weeks ago who noted that under Clinton, there was reform in the welfare system. A bunch of regulations were put into place to ensure that cheating and stealing would not take place. And yet, noted the speaker, we bail out the financial institutions and do not put any regulations or constraints into place.
posted by Postroad at 7:41 AM on February 22, 2010 [2 favorites]

If you are interested in helping the "real" economy, I would like to suggest making purchases from local shops and restaurants rather than big chains. Also, put your money in local credit unions. If you live in a place that has local agriculture, try to buy from local farmers when possible.

It's not much, but it's something.

It's pretty clear that the United States has been transitioning away from industrial capitalism towards finance capitalism for some time. The majority of the wealth of the US is not invested in building factories that are used to make things (and employ people). The wealth of the US is invested in short term buying and selling currencies, stocks and commodities.

If you purchase local goods from local merchants, you maximize the chances that the profits will be reinvested in your community.
posted by jefeweiss at 9:11 AM on February 22, 2010 [4 favorites]

You have to wonder if Goldman knew what it was doing "letting" / "encouraging" all their workers to politics. They're smart and their bipartisan and were covered despite the party in power. How come the Secretary of Defense has to be a civilian, and, I'm not sure but usually someone without too much military experience or, at least, did other things outside the military whereas Paulson, Rubin, etc, etc -- get to jump literally from their former industries and run the Treasury. You'd think that position would be better suited for an academic of some sort, but oh well.

I love his fleshing out of the AIG to Goldman link -- they need some of their stain also.

Btw, Harold Ford is unapologetically supporting no regulation of this industry also.
posted by skepticallypleased at 9:25 AM on February 22, 2010

Goddamn you Jan Wenner and your giant "Fuck You!" to the interwebs! Anybody have a link to somewhere I can read the goddamn thing? Thanks. (Worst. Monday. EVER)
posted by KingEdRa at 9:26 AM on February 22, 2010

It would appear that Rolling stone forgot to renew their domain, as the website is now a placeholder site for Network Solutions
posted by hellojed at 9:37 AM on February 22, 2010 [3 favorites]

It would appear that Rolling stone forgot to renew their domain, as the website is now a placeholder site for Network Solutions

Yeah, I was going to post the same thing. Somebody sure fucked up!
posted by adamdschneider at 9:51 AM on February 22, 2010

dang, and I wanted to read this too
posted by rebent at 10:20 AM on February 22, 2010

Somebody sure fucked up!

That's what they want you to think.
REDACTED
posted by Civil_Disobedient at 10:22 AM on February 22, 2010 [2 favorites]

Entire article (I believe) available here.
posted by BigSky at 10:24 AM on February 22, 2010 [7 favorites]

That is indeed it. Thank you, BigSky.
posted by Pope Guilty at 11:01 AM on February 22, 2010

Excuse me, when I want to open the website I get "Error: Page cannot be displayed. Please contact service provider for more details. (2)" message. I do live in switzerland. I never got this message before.

When I open the page http://www.rollingstone.com/ via aa anonymous web proxy I get to a website which is "under construction"

What is this for a website?

good article, though,. Thanks.
posted by diwolf at 12:11 PM on February 22, 2010

5. Donate your money to a(n actual) socialist candidate.

6. support a non-corporatist candidate (socialist or not).

That's the equivalent of flushing your money down the toilet.

I'll take #3. No fire whammies!
posted by mrgrimm at 2:21 PM on February 22, 2010

It ain't finished yet. How Goldman Sachs Helped Greece to Mask its True Debt and here is the NYT report.
posted by adamvasco at 3:05 PM on February 22, 2010 [2 favorites]

While Greece did not take advantage of Goldman’s proposal in November 2009, it had paid the bank about $300 million in fees for arranging the 2001 transaction, according to several bankers familiar with the deal.

Worth every cent.
posted by Civil_Disobedient at 6:11 PM on February 22, 2010

Y'know...the sooner we eliminate this thing we call "money," the sooner these assholes cease having any influence on our lives.
posted by Thorzdad at 4:46 AM on February 23, 2010

There's some kind of problem with the rollingstone.com server. Anyone have a link to a cache or mirror of this article?
posted by phaedon at 9:02 AM on February 23, 2010

Oops. Got it.
posted by phaedon at 9:09 AM on February 23, 2010

Goldman under scrutiny for its role in Greece's fiscal woes
posted by homunculus at 9:54 PM on February 25, 2010

Transcript reveals anger of AIG employees toward politicians, public
posted by homunculus at 12:40 PM on March 5, 2010

Transcript reveals anger of AIG employees toward politicians, public

That's an an interesting look into what seems to be a highly delusional culture.

"I think the U.S. taxpayer deserves to lose a trillion dollars over this thing for the way they have behaved."

Uh, what?
posted by mrgrimm at 3:22 PM on March 5, 2010