It's Goldman World, We Just Live in It

I do take some pleasure in watching Goldman Sachs execs get grilled by Congress. Though I'm afraid the process amounts to a distraction, which is likely its real purpose, and Goldman will no doubt come out the other end unscathed.

Whether the firm actually exposed clients to tranches of mortgage-backed securities it knew were "shitty" is an important question (and I'm going to write more about this in the coming days.) But it's silly to think that shenanigans like helping someone short the subprime market caused the great credit crisis of 2008.

And Carl Levin isn't going to be publicly auditing the Federal Reserve, as Ron Paul has suggested, any time soon or inquiring too deeply into Fannie Mae and Freddie Mac's role in extending credit to the proverbial Mexican mariachi singer with an undisclosed income who got a $500,000 mortgage for a McMansion in a sand state. Such things would make the government look bad, and thus simply won't be done.

I have been somewhat surprised, however, that Goldman bashing is bipartisan. I thought the GOP might stand up for the banksters; instead, they're tarring the Democrats as "the party of Goldman Sachs," a statement that has some foundation in truth.

But there are still some conservatives out there willing to unapologetically "defend capitalism" in the worst possible of ways. Writes Brett Joshpe in Fortune,

Whether Goldman ends up fighting the SEC to the bitter end or reaches a settlement and pays a fine to make the matter go away remains to be seen. However, you can bet that at the end, Goldman will be just fine. Even with talk of financial reform coming from the halls of Congress, the government knows that America and an economic turnaround depend on Goldman.

For the gold standard (no pun intended) of Wall Street, sunny days will come again soon enough. And for the rest of us that's probably a very good thing.

Not just its economy but America itself depends on Goldman Sachs. A bold thesis!

Joshpe's a shill, but, sad to say, he's actually getting at something real. As the Deutsche Bank graph below reveals, the financial industry is just about the only thing in America that's turning a consistent profit. It and "government" are the only sectors that are thriving post-2008.

(ht: Global Guerrillas)

If only we could turn the entire economy into a financial sector, America would be on the road to riches. Actually making stuff is for suckers.

Article Info

Published in: Malinvestments

Article topics:

Finance

Richard Spencer

A former assistant editor at The American Conservative and executive editor at Taki's Magazine (takimag.com), Richard B. Spencer is the founder and co-editor of AlternativeRight.com