Matt Taibi: GrifTopia: from chapter 7:
My contribution to this was to launch a debate over whether or not it was appropriate for a reputable mainstream media organization to publicly call Lloyd Blankfein a motherf---er. This was really what most of the "vampire squid" uproar boiled down to. The substance of most of the freak-outs by mainstream financial reporters and the bank itself over the Rolling Stone piece was oddly nonspecific. Goldman spokesman Lucas van Praag called the piece "vaguely entertaining" and "an hysterical compilation of conspiracy theories." Van Praag even made an attempt at humor, saying, "Notable ones missing are Goldman Sachs as the third shooter [in John F. Kennedy's assassination] and faking the first lunar landing."
But at no time did the bank ever deny any of the information in the piece. Their only real factual quibble was with the assertion that they were a major player in the mortgage market-the bank somewhat gleefully noted that its "former competitors," like the since-vaporized Bear Stearns, were much bigger players.
The bank didn't really bother with me at all-why would it need to?-but other financial reporters surely did. Overwhelmingly the theme of the criticism was not that my reporting was factually wrong, but that I'd missed the larger, meta-Randian truth, which is that while Goldman might be corrupt and might have used government influence to bail itself out, this was necessary for the country, because our best and our brightest must be saved at all costs. Otherwise, who would put bread on our tables? Gasparino, the CNBC tool, put it best:
And thank God Paulson and Bernanke turned to Blankfein and not the editors at Rolling Stone for help. I hate to break it to everyone out there in a class-warfare mood, but if AIG is imploding and you're the government and you need help restructuring the company or figuring out ways the government can fix the problem, Goldman is a good place to start.
Gasparino said this in the midst of an article that was filled with an extraordinary series of concessions; he ended up agreeing with almost everything I wrote. Some examples:
Was Blankfein in the room when they discussed this and how to save the system? Of course he was. Was Goldman saved from extinction in the process? Undoubtedly ... Say what you want about the bailout-it was fast and dirty, but it was necessary ... Of course the firm had conflicts of interest-given its exposure to AIG insured debt and all its connections in government-but so did just about everyone else in this sordid mess ... No rational person can deny the fact that Goldman is benefiting from its status as a government protected bank, as it makes big bucks ($3 billion in just the second quarter alone), acting like a hedge fund just after getting bailed out by the feds, and using its status as a commercial bank to borrow cheaply and make huge bond market bets ... Is Goldman too powerful? Maybe. Was it too big to fail back in September? Given the size of its balance sheet, Goldman's demise would have made Lehman's look insignificant.
There was a lot of stuff like this, where the people who were whaling away at me and Rolling Stone were continually conceding the factual parts of the argument but insisting that the wrongness was in the conclusions I was drawing. Megan McArdle of the Atlantic put it this way:
No, [Taibbi's] facts are wrong, his conclusions are wrong, and only his discomfort with Goldman Sachs' role in our public life is correct ... Or perhaps a better way to say it is that his facts are right, but the mini narratives are ludicrously wrong, which makes the meta narrative suspect.
And what I missed in the meta narrative, of course, is that Goldman Sachs, while perhaps corrupt, and too closely tied to government, and the recipient of far too much taxpayer support, was nonetheless not an appropriate target for anger because we just need them so badly to keep our ship afloat. Once this argument was out there it was only a matter of time before it was institutionalized in the New York Times in a column by the archpriest of American conventional wisdom, David Brooks. Brooks argued that the problem with critiques like mine was that while the financial crisis had many causes (including, he insisted with a straight face, the economic rise of China), we were just taking the easy way out-"with the populist narrative, you can just blame Goldman Sachs."
Again, Brooks never at any time took issue with any of the facts in the case against Goldman Sachs. In fact, he conceded them and insisted that this was actually the point, that it's precisely despite the ugly facts that we must indulge the Goldmans of the world. He summed up this point of view in an extraordinary passage:
Political populists ... can't seem to grasp that a politics based on punishing the elites won't produce a better-educated work force, more investment, more innovation or any of the other things required for progress and growth ...
Hamilton championed capital markets and Lincoln championed banks, not because they loved traders and bankers. They did it because they knew a vibrant capitalist economy would maximize opportunity for poor boys like themselves. They were willing to tolerate the excesses of traders because they understood that no institution is more likely to channel opportunity to new groups and new people than vigorous financial markets.
And that's basically what this argument came down to, in the end. It came down to an argument about class privilege. Yes, Goldman might be guilty of many things, they may even have stolen billions of your hard-earned tax dollars to buy themselves yachts and blowjobs, but we can't throw out the baby with the bathwater!
But things did shift a bit. The Narrative was wounded. The mainstream media act just like in the classic studies of herd animals: at the exact instant more than half of the herd makes a move to bolt, they all move...