Goldman Sachs report record profits for the second quarter today. Glenn Greenwald has a great background post here. I don't want to excerpt from it as it's worth reading in its entirety.
The Wall Street Journal reports that Goldman earned $3.44 billion in the second quarter of 2009. If you haven't been following what's going on, you might be happy about this. You might think that it represents a turnaround in the economy.
You might not realize that it came as a result of taxpayer money being shoveled out the back door and into Goldman's trunk, because Goldman is the most connected company in the world, and what they are connected to is "your" government, the Treasury Department of which is being virtually run by ex-Goldman Sachs executives.
If you did realize this, and you read Glenn's post above, and you read Matt Taibbi's Rolling Stone article which was linked to within Glenn's post, then you might also realize that Goldman's record profits are most assuredly not a good thing, as it means that they are now armed with the cash as well as the cognitive capture to make sure that the your government continues to make sure it consults them before any move. Especially moves which, while good for you, and the economy, might result in Goldman's inability to continue to make obscene amounts of money at the expense of taxpayers.
And do not doubt for one minute that they are making this money at your expense.
The irony is that many taxpayers will actually defend Goldman, and, while knowing absolutely nothing about them, will point to their record profits as proof that they are doing something well.
They are. They are masters of controlling goverment policy, of helping to create financial crises, profiting from it, and then swooping in, vulture-like, and profiting again from the chaos and carnage. They do this very, very well, in fact.
It is no accident that they are making more money now than they did at the height of the bubble 2 years ago. It is no accident that they received billions of dollars of bailout money, after laundering it through AIG so that they could claim innocence, even as they profited from betting against AIG. Nor is it an accident that they have had access to taxpayer-insured funds, directly from Treasury, at interest rates taxpayers can only dream about, and have used those taxpayer funds to conduct highly profitable principal risk trades. The risk for these trades, of course, is born by you and me, the taxpayers.
Goldman has now set aside over $11 billion to pay its employees for the first 6 months of the year. This amount is equal to over $380,000 for each employee, from executives right down to mail clerks and and janitors.
Where is the outrage? Republicans are outraged; they are outraged that we would even consider interfering in a free-market compensation system. And many people agree with them. It's shocking how many people actually agree with this.
If you're one of them, it's time to disabuse yourself of the notion that Goldman operates in a free-market system. They do not. They have taken huge risks, cashed in the profits, taken more risks, only to drive their company to the verge of insolvency, then had taxpayers bail them out, then had the government help them eliminate the competition, then borrowed huge amounts of taxpayer money (while paying taxpayers a ridiculously low rate of interest) and then used that money to gamble some more, knowing that taxpayers would get shafted if the bets went bad, just like they did the last time. So far their bets have paid off, and they're raking in billions. And so now they're paying themselves billions while they can, because sooner or later they'll take the while system down with them again.
And if you ask them why they think it's ok to pay themselves billions of dollars of your money, and if you wonder where the taxpayer cut is, since, after all, we're funding them, the answer you will get from all 29,400 of its millionaire employees will be a collective "Fuck You."
Ladies and Gentleman, Goldman Sachs!
I remain astonished at the amount of money to be made during one of the worst economic downturns our country has ever experienced. It is obscene to be so amply rewarded after such extraordinary federal support in a time when so many people are out of work.
ReplyDeleteI don't believe that the people at Goldman are inherently evil. But they obviously have convinced themselves of the Republican position.
ReplyDeleteIt's up to us to make this an issue. I realize Goldman isn't the only bank out there that has done this, but their offenses have been so egregious that the name Goldman Sachs should serve as a rallying cry. The rage should coalesce around them; it should be their headquarters that the protesters go to first. We only need to change the rules for one bank, and the rules for the rest will change as well.