Yesterday, I heard Matt Taibbi (sp?) on Warren Olney's Public Radio show "To the Point" talking about Goldman Sachs. He was outgunned, because the other three interviewees were all very-confident finance guys, two of whom were totally pro-Goldman. He sputtered a bit after hearing that one tell us that the reason why folks like Hank Paulson end up as Secretary of the Treasury (and the like) is because they are "renaissance men" who believe in public service. (He should have been prepared for that.)
Though he did okay in the end, Taibbi could have done better if he'd had more of a theoretical approach (and less of a "this is what my sources say" journalistic approach). Krugman's column (see below) is better on this score. Neither mention the problem of the Treasury and Goldman sharing a common culture and a common world-view. Taibbi's article on Goldman was a bit obsessed with old-fashioned corruption, glossing the role of _collective_ corruption, in which the Treasury looks at the world from the point of view of the finance sector _in general_ rather from that of an individual company.[*] But both Taibbi and PK need to go further: financial operations of the sort that Goldman Sachs does is entirely a matter of shuffling paper and, more importantly, of redistributing rather than creating wealth. Most of the redistribution done by Goldman Sachs seems to be to Goldman Sachs. Beyond a basic level of facilitating the allocation of capital among competing uses (a level that the US passed a long time ago), finance of this sort is totally _parasitic_ -- and this is from the perspective of capitalist society as a whole: it does not produce surplus-value but redistributes and wastes it. This activity also promotes and exaggerates the crisis tendencies already inherent in capitalism. The process of Goldman growing bigger and richer is a normal result of such crises, i.e., the centralization of capital. It's helped along by its connections with the Treasury, which let Lehman die partly because it wasn't Goldman Sachs (as Taibbi pointed out). It's not just a matter of "connections": Paulson likely didn't see the threat to Lehman as serious as one to Goldman. He likely didn't see Lehman as important in terms of its impact on the rest of finance as he did Goldman. BTW, in light of the big profits received by Goldman, JPMorgan, the B of A, and Citigroup, no-one seems to be saying: the problem with the financial crisis has not been cash flow as much as fucked-up balance sheets. Thus, as the cash flow improves (the megaprofits) there is no automatic improvement in the balance sheets: profits could go as bonuses or dividends instead of to cover loan losses, etc. This is especially true when the government folks over at Goldman Sachs -- oops, I meant to say the U.S. Treasury Department -- are willing to allow zombie organizations (which are technically bankrupt) to persist in operation and to promise to allow big organizations to fail without there being any consequences to themselves. > The New York Times > My Alerts: PK-columns > July 17, 2009 12:50 AM > -------------------------------------- > > Opinion: The Joy of Sachs > By PAUL KRUGMAN > Goldman Sachs's record quarterly profits show us that the > investment bank is very good at what it does. > Unfortunately, what it does is bad for America. > > Full Story: > http://www.nytimes.com/2009/07/17/opinion/17krugman.html?emc=tnt&tntemail0=y -- Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- Karl, paraphrasing Dante. [*] I am familiar with collective corruption from my experience with Jesuits. Though all of them take a vow of poverty, some of them are significantly richer than others -- because the communities they live in are richer. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
