Matt Taibbi’s latest dissection of the dark arts of legislative sausage-making, “Wall Street’s Big Win: Finance reform won’t stop the high-risk gambling that wrecked the economy – and Republicans aren’t the only ones to blame” is up on the Rolling Stone website. Read the whole thing, but not while you’re eating, or if this is the week you planned to stop sniffing glue:
… But is the nightmare really over, or is this just another Inception– style trick ending? It’s hard to figure, given all the absurd rhetoric emanating from the leadership of both parties. Obama and the Democrats boasted that the bill is the “toughest financial reform since the ones we created in the aftermath of the Great Depression” – a claim that would maybe be more impressive if Congress had passed any financial reforms since the Great Depression, or at least any that didn’t specifically involve radically undoing the Depression-era laws.
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The Republicans, meanwhile, were predictably hysterical. They described the new law – officially known as the Dodd-Frank Wall Street Reform and Consumer Protection Act – as something not far from a full-blown Marxist seizure of the means of production. House Minority Leader John Boehner shrieked that it was like “killing an ant with a nuclear weapon,” apparently forgetting that the ant crisis in question wiped out about 40 percent of the world’s wealth in a little over a year, making its smallness highly debatable.
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But Dodd-Frank was neither an FDR-style, paradigm-shifting reform, nor a historic assault on free enterprise. What it was, ultimately, was a cop-out, a Band-Aid on a severed artery. If it marks the end of anything at all, it represents the end of the best opportunity we had to do something real about the criminal hijacking of America’s financial-services industry. During the yearlong legislative battle that forged this bill, Congress took a long, hard look at the shape of the modern American economy – and then decided that it didn’t have the stones to wipe out our country’s one dependably thriving profit center: theft.
[…] __
[A]n uncomfortable political truth: The huge profits that Wall Street earned in the past decade were driven in large part by a single, far-reaching scheme, one in which bankers, home lenders and other players exploited loopholes in the system to magically transform subprime home borrowers into AAA investments, sell them off to unsuspecting pension funds and foreign trade unions and other suckers, then multiply their score by leveraging their phony-baloney deals over and over. It was pure financial alchemy – turning manure into gold, then spinning it Rumpelstiltskin-style into vast profits using complex, mostly unregulated new instruments that almost no one outside of a few experts in the field really understood. With the government borrowing mountains of Chinese and Saudi cash to fight two crazy wars, and the domestic manufacturing base mostly vanished overseas, this massive fraud for all intents and purposes was the American economy in the 2000s; we were a nation subsisting on an elaborate check-bouncing scheme.
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Edit: Could some of you haterz maybe read the whole effin article before dismissing as “just another rage-gasm” that “we all knew about anyway”? Taibbi takes five pages to spell out exactly which legislators performed specific actions leading to the passage of a bill, with details of how that bill turned out to be what it is and not seventeen other better (or maybe worse) things. Having done this research (which we are all supposed to be in favor of), he then reports about the topic, in a publication whose general readership may be rather less politically sophisticated than the subscribers to The Nation or Commentary. I give you four paragraphs as a teaser, and a select portion of the elite BJ commentariat can’t be arsed to click over before getting all sniffy. Pismires.
matoko_chan
i want to bear Taibbi’s snark-enhanced children.
NobodySpecial
If there was any justice in the world, this wouldn’t be an article in Rolling Stone; this would be a front page above-the-fold expose in every single major newspaper.
But since there’s not, we’ll have to make do with finding out what dress Michelle is wearing whilst out in the land of La Furia Roja.
Kevin
Taibbi speaks truth.
beltane
Things will not improve until we have an actual, functioning Left in this country. It will have to be created from scratch, as every major institution in this country is 100% on the side of the mega-rich. I am afraid that the only thing truly capable of changing the status quo will be a Greater Monster.
Chad S
Wall Street will find something else risky to invest in, but they’ll have to declare it to their shareholders now, can’t get into 25+ to 1 debt to asset ratios and they can’t get into the dark tangle that was CDOs anymore(which was the real problem). Wachovia won’t be underwriting 30 billion in bad subprime loans under the table, securitizing that debt, then buying up the lender(and having AIG create massive swaps on it, then reinsuring their own swaps to double down on the losses) all without shareholder even knowing what was going on anymore. Transparency is the difference now. You’ll know which firms are blowing their cash on thai hooker swaps now.
blahblahgurgleblegblah
@beltane:
The problem here is not political. A “functioning left” is not a solution to class warfare from above. The proper solution is a populist left-right coalition organized against elites. To succeed at that goal, one must trade off divisive social goals for shared economic goals. For example, the left ceding abortion rights in order to form an economic coalition with social right wingers.
Further, recognize that the solution cannot come from either major party. This coalition must destroy both political parties from the top down, and reform a newly revitalized republic based on the original constitution. Seems crazy. Yet, how could one achieve such class based goals without a broad based coalition? Think it could happen from either corrupt party?
Both Bush and Obama have shown themselves to be fascist liars. Both engage in wars of aggression; both continue renditions without due process; both continue “enhanced interrogation” torture policies; Obama even asserts the right to assassinate US citizens. These are not the actions of legitimate political parties or legitimate government.
Loneoak
Entirely OT: The front page story on HuffPo about the cool new trend of hatin’ Muslins has an excellent teabagger sign: No Mas Mosques.
Even the brilliants minds here at BJ couldn’t come up with a more succinct and hilarious summary of the teabagger mindset.
J
What we didn’t realize is that the bankers who came up with the expression ‘sub-prime’ were devotees of ironical understatement. I imagine it’s because the bedside tables in their many vacation homes are stocked with P.G. Wodehouse novels. When you hear a banker describe an investment as ‘sub-prime’ you should imagine Bertie Wooster saying ‘well as you can imagine I wasn’t at my spiffiest after hiding from Madeline Bassett in wet clothes all night in the boathouse’ or something like that.
soonergrunt
The carriage return function seems to have gone on vacation again. FYWP!
Omnes Omnibus
@soonergrunt: Try refreshing a couple of times; it works sometimes.
Kryptik
OT, but NYTimes tells us what most of us here already knew well before hand: Mosque oppositions aren’t about zoning or sympathy for community or 9/11 victims: it’s simply about excluding Islam as un-American.
Across Nation, Mosque Projects Meet Opposition
FlipYrWhig
So, how do we “do something real” that isn’t a “cop-out” or a “Band-Aid,” other than creating from scratch a radical political movement that eventually has enough votes to pass unfiltered, paradigm-shifting, historic assaults on free enterprise? Because that’s going to take a little while.
burnspbesq
Matt, in what parallel universe could the bill you would have liked gotten out of Congress and onto the President’s desk? Willfuly ignorant of the realities of the legislative process is no way for someone who aspires to be treated as a serious journalist to go through life.
beltane
@FlipYrWhig: Politicians do not do things out of the goodness of their hearts, and the wealthy will never surrender one iota of their wealth and power unless they are terrified of the alternatives. In FDR’s time, the rich had plenty to be afraid of in the form of the Specter of Communism pushing across Europe. It cannot be a coincidence that after the fall of the Soviet Union, the corporate world dropped any pretense of behaving decently. At the present time, there is absolutely nothing that keeps these people awake at night, and until that changes, don’t expect much else to change, either.
EconWatcher
I’m most disappointed in the failure to mandate aggressive downsizing of the largest financial institutions. It’s both their economic risk and their political power that’s killing us, with the latter preventing us from effectively attacking the former. And a beefed up resolution authority just isn’t going to do it.
But to give Obama his due, here’s the problem: He would have had the most political leverage to pass really aggressive reform in the first few months after he was elected, when there was a real potential coalition of pitchforks and torches. But if he’d gone after it right then, he might have reignited the worst of the credit crisis and precipitated a collapse. It’s very hard to start restructuring and rebuilding a burned house before you’ve completely put the fire out.
Crediting him with thoughtfulness and good faith–as I think we should–Obama apparently decided that his first and main priority had to be fighting deflation at all costs, because in January of 2009 we were on the cliff facing a deflationary abyss. Beginning an aggressive financial reform immediately could have helped tip us over the edge.
But by waiting, Obama allowed some of the political momentum to subside. So we got what we got, which is something but not enough.
Did he make the wrong choice? I don’t know, but I don’t think you can answer that without acknowleding the risk we faced of a total deflationary collapse of the economy.
And Obama’s critics from both the left and the right almost always skip over that part. Wonder why.
SiubhanDuinne
Does this post have a title? “Recent Posts” lists it as *45587* and the top-right link from the previous post shows it, with a certain flair for originality, as *Next Post*. But on this page itself, I’m seein nothin and I haz a confuzed.
burnspbesq
@blahblahgurgleblegblah:
And if Ulster is a valid historical example, we are approximately 300 years from achieving your goal.
Corner Stone
I like Taibbi but the quoted parts of the article are nothing more than opinion, and that leaves it wide open for the usual suspects to grab their hankys and faint on the nearest couch.
“What Taibbi is saying was for us to do the unpossible! What did he expect? Nothing could be done!”
Maybe he has more in the whole thing but I haven’t read it yet.
gypsy howell
Or, better yet, how about if the right-wingers who have been wrong about every single fucking thing in this country cede the argument to those of us who have been right about every single fucking thing in the country, and back down on their anti-choice rampage and leave women the fuck alone so we can all concentrate on ridding ourselves of the real problem at hand — the REAL motherfucking elite — the rich who are soaking us day in and day out.
jwb
@NobodySpecial: I don’t know. It says something profound about our nation that our best sources for incisive political analysis—and even news—are a music magazine (Rolling Stone), a couple of comedy shows (Daily Show, Colbert Report), a parody newspaper/website (The Onion), and a snarky political gossip site (Wonkette). They are, it is true, still dependent on the MSM for basic coverage (that is, printing the news releases from the various political agents), but I’m really beginning to believe that a normal person is better off ignoring the press and being uninformed than following the MSM and being ill-informed—it takes far too much time to cut through all the spin and bullshit. And once you’ve managed to work through the situation, the answer is always the same: the moneyed interests have fucked us over.
beltane
@gypsy howell: The social right-wingers also feel that extreme income inequality and corporate dominance are part of God’s plan for society. There is no point in forming an alliance with people who feel that servitude is freedom, and that if they cheerfully submit to abuse in this life, they will be rewarded with great wealth in the next. That is the basis of the Prosperity Gospel, America’s own bastardized version of Christianity; we ignore it at our own peril.
Sentient Puddle
My first thought when I heard he wrote this story: Probably not worth reading. He’ll likely just rage at Wall Street, acting like the problem is just that we don’t hate the banks enough, or something of the like.
Thoughts after reading the excerpt: See above.
I just don’t get the sense that Taibbi wants to bother going deep enough in understanding the underpinnings of this crisis and the implications there. He seems content to say “I hate these guys, and they clearly did something wrong! Let’s regulate them within an inch of their lives!” And, well, remember how everyone was bitching about how Erik was setting up a strawman about how the left treats regulators? QED.
I finished The Big Short a few weeks back. Michael Lewis showed that it’s possible to have an entertaining writing style and leave you actually informed as to what the fuck just happened. And when you know what happened, Taibbi is just sounding way too vapid to come across as entertaining.
gypsy howell
@burnspbesq:
I believe that is exactly his point: anyone who believes that the Democratic party is any more likely to stand up for our interests against corporate monied interests is a fool.
They’re staging a kabuki performance for our benefit, wherein they get oh-so-excruciatingly close to doing something half-decent and then whoops! someone is designated (could be Nelson, Graham, Lieberman, Schumer, The Presidential Sisters from Maine or even newbie Scott Brown fergawdsakes) to step up to the plate to fuck us, giving cover to all the other criminals in our government who wring their hands and bemoan the fact that they just can’t get anything done.
beltane
@Sentient Puddle: Taibbi is a good writer, but he comes across as a youngster who is shocked, just shocked, to discover that the upper class enacts policies that benefit the upper class. No duh. I am still waiting to hear from someone who has a viable plan of action to change the current situation. I am well aware that the status quo sucks. The question is: what are we going to do about it?
jwb
@gypsy howell: Actually, the Democratic party is “more likely to stand up for our interests against corporate monied interests,” and by a wide margin. That’s what’s so depressing.
Paris
One thing to keep in mind is that the legislation wasn’t intended to prevent another disaster. It was meant to give the government better options when a crash occurs. They want to be able to wind down big failing institutions instead of bailing them out. So maybe there is a bit of false expectation going on.
robertdsc-PowerBook & 27 titles
@burnspbesq:
This.
cmorenc
Tabbi’s description of how the financial-reform bill was gutted by a major part of the Democratic congressional leadership and key financial officials within the Obama Administration encapsulates THE most fundamental reason the GOP has been able to get such strong traction toward the 2010 midterms, despite their own even more egregiously miserable record when they held power. Independents correctly realized early on that the Democrats were nearly as much the captive servants of corrupt elite business interests who’d been screwing over ordinary America for years as the GOP was. The key initial catalyst wasn’t the Health Care legislation – but rather the facts that the first effective priority of the Obama Administration after taking office was the prompt attention and effectiveness taken to shore up (with public money) the solvency of the same firms and people who were most responsible for the financial crash in the first place (especially the obviously ineffective, half-hearted effort concerning the AIG bonuses), whereas by contrast measures to help ordinary middle-class Americans were relatively weak, ineffective, and slow. That’s precisely what allowed the GOP meme that people should fear and resent more government involvement in health care to take hold outside hard-core wingers to take hold – bolstered by how obviously Baucus and other key members of the Democratic congressional leadership seemed more interested in making sure any measures served the insurance industry first.
It’s hardly surprising that far too many voters don’t see that much difference between the parties in Congress – both are corrupt, and between the two, seem poised to select the party paying lip service to lowering government’s size and involvement. Too much of what the Obama Administration and the Democratic congressional leadership have accomplished have only confirmed the impression that the Federal government is foremost in the service of elite financial and business interests, and is more burden than service to ordinary Americans. Of course, it isn’t true at all that the Democrats have done nothing to help ordinary Americans and it is true that the GOP congressional delegation is a far more poisonously toxic bunch of toads themselves. The GOP has played an ugly, dishonest, obstructionist cynical game, but the Democrats have behaved in a way that plays right into it, with lots of truth to the notion that big government has been ineffective for ordinary people.
EconWatcher
gypsy howell:
When you say that it’s foolish to think “the Democratic party is any more likely to stand up for our interests,” do you mean when compared to Republicans?
Because if that’s what you mean, then either you’re engaging in pointless hyperbole or you’ve lost it. You think what we’ve gotten over the last 18 months is no better than what we would’ve gotten with a McCain/Palin presidency and Boehner as Speaker? And more specifically, you think the financial reform we just got is no better than what they would have delivered?
You’re kidding, right?
gypsy howell
@Paris:
First I’ve heard that, but uh, OK. Of course, even taking your word for it, one might ask WHY it wasn’t intended to to prevent another disaster.
@jwb:
Yeah sadly, I suppose you’re right. They just want to get us where we’re going a little slower and less noticeably.
Democratic voters are at the “If Only The Tsar Knew!” stage.
Sentient Puddle
@gypsy howell:
Well for one, Paris is half-wrong on this. The derivatives exchanges and clearinghouses are designed to help prevent disasters. It’s not foolproof (it depends on people actually being rational with information), and it only deals with threats that come from derivatives, but it is a tool in place to try and prevent another disaster.
As for why the bill didn’t focus more on preventing disaster, that’s because it’s slightly shy of impossible. Best you can do is, again, assume people are rational with good information. So one way or another, you need some way to wind down big failed banks.
joe from Lowell
“I can imagine a policy that goes even farther than what passed,” is
1) not a good reason to conclude that what passed is insignificant, and
2) not terribly impressive. Everyone can imagine a policy that goes even farther than any policy that gets passed, including the people working for its passage.
Taibbi = wank wank wank, look how awesome I am, nothing satisfies me!
burnspbesq
@gypsy howell:
Sorry, no. That’s a fantasy. Substantially all of what the Senate Republicans believe is stupid and bad for the country, but there can be no doubt that most of them sincerely and in good faith believe it. That’s why they are Republicans.
Nobody gets rich serving in Congress; the cost of maintaining two households guarantees that. If someone stays in Congress for an extended period of time, rather than cashing out, the only logical conclusion is that they are doing it because they sincerely believe that they can help advance the national interest. And that applies to those whose notion of the national interest is bat-guano crazy to exactly the same extent that it applies to the good guys.
Capri
@Sentient Puddle:
Actually, what he says over and over again is that these guys are criminals and should be prosecuted as such.
burnspbesq
@cmorenc:
And you have a problem with this for precisely what reason? Like it or not, without those institutions we have no economy, and there are no readily available substitutes.
C’mon. Reality is what it is.
burnspbesq
@cmorenc:
Fixed.
burnspbesq
@Capri:
And we’re all still waiting for him to tell us which criminal statutes have been violated and what evidence exists that might convince a jury in the Southern District of New York.
Sentient Puddle
@burnspbesq: Not to mention the fact that prosecutions wouldn’t make any sort of legislation the least bit stronger.
Montysano
@blahblahgurgleblegblah:
Yes, this is TPTB’s nightmare. When Glenn Beck, Hannity, Levin, et al go to work every day, their prime directive is to lie, obfuscate, distract, wank, and demagogue as necessary to preserve partisan divides and prevent such a coalition from ever forming.
NobodySpecial
Unless your husband is a war profiteer like some California Democrat I could name or you’re raking in backdoor cash through phony house buys like Duke Cunningham. To name two.
FlipYrWhig
@joe from Lowell:
Well said. This line of criticism doesn’t yield anything other than fueling the perpetual frustration/outrage machine _we all know about already_. War? Sucks, and they should do something different. Finance? Sucks, and they should do something different. Health? Sucks, and they should do something different. Surveillance? Sucks, and they should do something different.
Here’s the thing. To end up with better policies than we’re getting, we-the-people need to come up with something that is threatening, or inspiring, to weak-kneed conservative Democrats and the few remaining potentially-constructive Republicans. beltane isn’t wrong that a real mass left would do some good, but we can’t wait that long. The reason why Democrats didn’t engage in this level of obstruction was IMHO that they feared the media coverage that would result: they were thwarting the people’s will! Elections have consequences, right? Well, the Democratic majority doesn’t talk that way, because a huge chunk of its membership doesn’t believe it.
How do we-the-people get them on board? I don’t fucking know. I don’t think it’s possible. They want small-beer incrementalism at best. If they lose, we have to deal with the crazy Republicans who replace them.
I harp on the same string topic after topic, I know, but the magic bullets we need are
(1) something that gives conservative Democrats an incentive to come over to our side, even though they are probably at least 40% of the party (and more than that proportion of the politicians);
(2) something that gives “moderate” Republicans more of a sense of shame than Mitch McConnell’s threats give a sense of imminent beat-down.
Those are both _extremely_ tall orders. How do we build on Taibbi’s gripes so that we end up with better solutions than the Band-Aids he derides? I know it’s not his job: he’s a gadfly, not a policymaker. But “praxis” is necessary too, and in the here and now, what does it look like?
Tom Q
Taibbi’s a very colorful writer, and he knows how to caress the forever-dissatisfied left’s erogenous zones. But there’s really no need to read him unless you want a rage-orgasm. His every column is “I can imagine something perfect, and anyone who fails to provide it is a sellout scumbag”. He’s the 2000 Nader vote made flesh. Nothing will ever be progressive enough for his liking, and he prefers it that way: it confirms his moral superiority to everyone.
Joey Maloney
@blahblahgurgleblegblah:
Hey. Look down. No, straight down, at your toes. See that cute pink thing peeking out from beneath your paunch? You know that that is? It’s called “a penis”. When you look down and see one of those, that’s how you know that when you feel like you want to suggest that abortion rights should be given away? It’s time for you to shut the fuck up.
Bob Loblaw
@burnspbesq:
Did you even read the damn article beyond the first paragraph?
The reality that Brownback, Kyl (probably), Dodd, Reid, Geithner, and Emmanuel/Messina all got in the same room and hashed out a trade just proves how bipartisan they can all really be when there’s financial money on the line. They traded auto regulation exemptions for absolutely nothing. They made the bill worse just so they didn’t have to deal with Levin-Merkley, sabotaging their own party in the process. This all backs the legislative record.
Junior Dem senators had to schedule a rape watch on the floor just to make sure their committee chair wasn’t left alone with the bill.
For the first time in their modern collective history, it was the Senate of all places that was struck by a progressive zeal. It was the Treasury and the Administration that held them back. Treasury dragged this bill to the right, not Republican opposition.
Oh, but they fought like fucking tigers out there, you know. They’re the good guys.
Joey Maloney
@blahblahgurgleblegblah:
Hey. Look down. No, straight down, at your toes. See that cute pink thing peeking out from beneath your paunch? You know that that is? It’s called “a pen is”. When you look down and see one of those, that’s how you know that when you feel like you want to suggest that abortion rights should be given away? It’s time for you to shut the fuck up.
blahblahgurgleblegblah
@Joey Maloney:
Perhaps you ought petition the blog admins to ban me then.
burnspbesq
@Bob Loblaw:
People who willfully refuse to acknowledge that it takes 60 votes in the Senate to pass legislation don’t add much to the conversation.
Bob Loblaw
@burnspbesq:
60 votes, huh? Since when does a Republican amendment make it back into the conference bill with no price asked?
Corner Stone
@burnspbesq:
Lolwhut?
Are you serious? The fact is that most members of Congress are independently wealthy before they are elected. And I’d be willing to bet that an inordinate amount of them go on to further their bottom line after leaving Congress.
Tom Daschle anyone?
Are you telling me you believe none of that went to ex-Congress people?
ETA – just saw the “cashing out” part of your post. Not sure it changes the thrust of my post but I didn’t see that at first.
Joey Maloney
@blahblahgurgleblegblah: I can see, as cavalier as you are with others’ rights, you might think the first resort would be to have yours taken away. But it’d be better all around if you learn how to govern your own behavior.
jaleh
Taibbi writes:
” In public, the parties stage a show of bitter bipartisan stalemate. But when the cameras are off, they fuck like crazed weasels in heat.”
George Packer wrote an article for the Newyorker..it’s very well researched and, according to Packer, the Senators do not even have lunch together any more, they hate each other.
http://www.newyorker.com/reporting/2010/08/09/100809fa_fact_packer
I wrote this on Dailykos, and someone came back and said “George Packer supported Iraq war, so why would I believe anything he says”…What does that have to do with this? These Naderites are just like the right’s tea party…they don’t even want to have a discussion, they believe what they believe and facts be damned.
If what Taibbi is telling is true, why Durbin would say this?
Durbin said, “I was stunned that only four Republicans would join us in passing this historic legislation. What does it take to bring the Republican Party into the conversation about the future of America?”
cmorenc
@burnspbesq
I’m not really sure this was anywhere remotely near so true as the Bush or Obama Administration, the financial community, much of the Congressional leadership, or MOST ESPECIALLY Hank Paulson or Tim Geithner pushed so hard to make us believe. In particular, the problem wasn’t so much that so many key banks and financial institutions were on the edge of insolvency as the fact that the collapse when it came would be abrupt, uncontrolled (the way Lehman Brothers collapsed), and set off an avalanche of secondary consequences that was the problem. However, these problems would have been much better addressed by forcing these institutions to go through controlled insolvency proceedings and temporary government receivership than by rescuing the very people whose irresponsible highly leveraged gambling and corruptly conflicted dealing caused the problems in the first place. We’d have been far better off if quite a few of Geithner’s Wall Street and banking buddies responsible for this mess had been laid off and pauperized, and the rest had been forced into a position of submission to re-installment of Glass-Stegall and other necessary reforms as an essential requisite for avoiding ruin. Instead, we bailed these people out where they quickly re-gathered strength enough to mobilize effective resistance to any real reform.
There was a window during the first 60 days or so of the Obama administration when even several key GOP Senators were openly willing to consider temporary nationalization of many of the problem banks and financial houses, and before the vilely corrupt Mitch McConnell and Boehner were able to mobilize the GOP into a firm strategy of intransigent resistance to anything Obama did (helped mightily by the huge early Obama missteps dealing with the financial industry).
How exactly are we better off essentially letting the banks and big financial houses get away with hamstringing “reform” to little more than a gossamer-thin faux veneer that really changes little about the practices that got us into this huge mess to begin with, and which has done so much to help the GOP poison the well against general progressive reform? I say we’d have been much better off letting several more big institutions fail (but in orderly fashion). We could have prevented the worst consequences of defaults while not re-empowering the same people who were responsible for this clusterf***k in the first place. Or putting the GOP in the sort of position where doing little to nothing looks better to too many voters than what modest bit the democrats have been able to accomplish with rescue of the economy.
How exactly is what was done working out for most middle-class Americans? Very poorly, thank you, and they can be forgiven for wondering exactly what is the difference between the economic catastrophe that was supposedly avoided and the slow-motion calamity that’s ongoing.
Ruckus
@gypsy howell:
A magician’s only trick is to hid the truth in plain sight. Conservatives have been practicing that parlor game for at least 60 years now. That’s why the best practitioner of the game was an actor.
burnspbesq
@cmorenc:
Perhaps, but (a) it’s not an easy thing to trigger an involuntary Chapter 11 case under the Bankruptcy Code as it currently stands, and (b) there was no legal authority for “temporary government receivership (the Steel Seizure Cases are still good law).” The resolution authority in the new law is intended to address that problem. It doesn’t go as far as I would have liked, but hopefully we’ll never know whether it’s adequate or not.
licensed to kill time
What happened to the title of this post? On the sidebar it’s titled 45587 like a prisoner or something….weird.
licensed to kill time
And now the title is back. I’m going to guess it had something to do with the gambling establishment word?
This place is so odd sometimes.
Chris
@cmorenc:
Maybe it’s because I’m too rich myself, but: I think this was the correct action. Failing to “shore up” the system would, I think, have had consequences almost nobody would have enjoyed (the ones who would are those who have stockpiled food, gold, and ammunition and are living in their own fortified encampments even now).
Anne Laurie
@SiubhanDuinne: Prufreeder fail, on my part. “Scheduled” this post before I went to bed in the wee hours, because I didn’t want to forget to put it up, and didn’t double-check the preview screen as carefully as I needed to.
burnspbesq
Taibbi:
So let me see if I have this straight. The real villain of the piece is Bill Clinton, whose Administration lacked the clairvoyance to put in place a set of mechanisms to regulate complex derivatives that as of 2000 either hadn’t been invented or hadn’t been used in connection with the securitization of home mortgages?
Umm, ohhhhhhhhhkkkkkkkkkkkkkay.
That's Master of Accountancy to You, Pal (JMN)
Anyone who reads any farther than this is just being stupid, because Taibbi just assassinated his own credibility. Like usual. Anyone who would say this is either a moron or is lying. Since, whatever else I might think of him, Taibbi isn’t an idiot, that leaves the alternative that he’s feeding you an enormous pile of bullshit in the hopes that you’ll ask him for more.
The people who run big pension funds aren’t innocent and unsuspecting. If yours is, then you need to go bitchslap whoever hired them. If the pension managers didn’t understand what they were buying, it’s because they didn’t want to know. They bought into the idea that they could get giant returns with dwarfish risks. Or they were part of an enormous agent/principal problem. Or they’d managed to get themselves so far behind the returns that they required that their alternatives were to go hat in hand to management (or a legislature, if it was a public fund) and admit that they’d screwed up and beg for more money.
People seem to have become very confused by two ideas that might sound similar, but really aren’t. The first is the often made, and correct, statement that many of these securities were so complicated that no one really understood them. That is true, but only in a limited context. What it means is that no one could be sure exactly what sets of facts would count as default events and would thus constitute a trigger for the swap contracts. No one could be sure exactly what properties were contained within a particular security. No one knew just who was on the hook for what and when.
For the people inside the various investment banks, that’s a whole lot of critical information they didn’t have. No one knew what their exposure was, and exactly which counterparties they were exposed to.* People are conflating this was the idea that the contracts were so complex that people outside the investment banks had no way of knowing what they were buying. In any meaningful sense, this part is NOT true. You may not have known the exact details laid out above, but it wouldn’t have been very hard to figure out the basic idea that you were buying pieces of low quality garbage dressed up to make them look pretty. For people who don’t have a lot of sophistication, I have no problem accepting that they took the investment banks at their word and thought they were buying something better than they were. That is an acceptable answer for the small town in Norway that got hammered, and some others.
It is absolutely not an acceptable answer for someone who runs a large pension fund. If they try to tell you that, it means that the response that causes the least damage to themselves that they can give you is that they exhibited gross negligence in not doing their job, a large part of which is to investigate exactly that sort of thing. The more likely answer is that they knew perfectly well what they were buying and thought they could get away with it.
Matt Taibbi trying to sell you the idea that the evil investment banks snookered us all, including the pension managers, means that he thinks you’re dumb enough to believe him. Try not to prove him right.
*That’s why cmorenc is wrong in doubting that the system was really in that much danger. Keep in mind that Lehman was a pretty small fish (and an extremely simple one) on Wall Street, and look at the damage its bankruptcy caused. The single institution that prompted what will end up being a large share of the cost of the bailouts was AIG, which was neither small nor simple. Had everyone just stood back and let it collapse, or go through bankruptcy even with a nudge, no one knows exactly who it would have taken down with it, but you can be sure that there would have been a lot of them. Beyond just the casino gambling a lot of people criticize, there were also a large number of swaps contracts written through AIG that were just one leg of a hedged trade. If you knock out all of those legs, then there are a lot of companies who thought they were fine and now aren’t.
Chris
@That’s Master of Accountancy to You, Pal (JMN): Indeed. One big worry for me was that a lot of money market funds might have broken the buck and/or been frozen while trying to determine proper valuations. That would make a lot of paychecks bounce.
Gen. Jrod and his Howling Army
Damn that Taibbi! He’s objectively worse that Limbaugh and Beck combined.
Thank G_d the crack commenters here at BJ are around to nitpick his articles. Just think, some smelly hippies might read his articles and get fired up! Heaven forbid!
Remember, brothers: better that the Republicans get everything they want than to allow a hippie to crack a smile!
Maybe once we’ve wiped out the Taibbi and Greenwald scourge, we’ll have more time to obsessively nitpick Stewart and Colbert. Maybe someday the voices of the left will truly be pure.
burnspbesq
@Gen. Jrod and his Howling Army:
Droll. Is there a point you wanted to make?
burnspbesq
@That’s Master of Accountancy to You, Pal (JMN):
In a way, you just reinforced one of the recurring themes of this story, which is that the real villains were the rating agencies. Talk about grossly negligent … OK, properly valuing one of those things was a monumental task (you have to effectively re-underwrite every loan in the pool), but that’s what the fuckers were supposed to be doing.
I’m with Cole on this one: these are the guys that most deserve to swing from a lamppost. Without those investment-grade ratings, none of the crap could have been sold, and the default risk would have stayed with the people who should have borne it.
In my more bloody-minded moments, I think about banning securitization altogether. You originate it, you carry it. That would improve underwriting in a great big hurry. Of course, I also think about forcing all the investment banks to go back to being general partnerships, which makes me a Bolshevik. God forbid that Lloyd should have his houses and his art collection at risk on every trade that Goldman enters into.
Gen. Jrod and his Howling Army
@burnspbesq: The point is obvious: we must destroy Matt Taibbi, Glenn Greenwald, and Jane Hamsher. Let us not be distracted by trifles such as the right-wing media or the Republicans. Focus your fire on the true threat to our nation, the left!
All true pragmatists must agree. The dirty fucking hippie is the root of all evil.
That's Master of Accountancy to You, Pal (JMN)
@burnspbesq: Eh. I’m not saying that the ratings agencies weren’t worse than useless. They were. I think calling them the most deserving to swing from a lamppost overdoes it. They were exactly as effective as everyone involved in the process wanted them to be. We focus on the conflict of interest inherent in the seller of a security paying for the rating, and with good reason. But the buyers didn’t want the agencies to put a good number on anything, either. They knew perfectly well that what they were buying wouldn’t meet a strict standard, and the last thing they wanted was to have someone tell them that they couldn’t have it. The ratings agencies were evil, but really at only a low grade, venal way that’s almost more squalid than infuriating. They were the servants of much more evil people, on both sides.
I don’t like this. The basic idea of securitization, that different parties have different risk appetites, and thus want different pieces of a loan, remains accurate. Where does the acceptable secondary market in debt stop and the unacceptable start? (Note, that’s actually a request for information, rather than a statement that the fact that such a line would be arbitrarily drawn means it can’t be done.) I think the idea that the originator must retain a certain portion of the loan, and possibly in the lower tranches, is probably workable.
Power to the Party, Comrade! My concern isn’t whether or not this is a good idea, but merely how one would go about doing it. I might simply say that any trade done off of an exchange is not covered by limited liability.
Doofus
@Gen. Jrod and his Howling Army:
Really? That’s the left? No wonder why we lose so bad.
SnarkyShark
This.
I quit bothering to comment when this place turned into “punch a dirty hippy” funtime.
Fuck pragmatism. The backs of these “vampire squids” need’s to be broken and we get the “blame the messenger” crowd in here to tell us how bad Tabbi and Greenwald are.
I’ll take a firebagger any day over the “punt on first down” crew that seems to inhabit Johns board anymore.
Get this through your “compromise every principal” skulls.
The Dirty fucking hippies were/are/will be right.
And the Dem establishment is playing us.
That's Master of Accountancy to You, Pal (JMN)
@SnarkyShark: My response is that, “Ready! Fire! Aim!” is a terrible way to regulate things. And that’s what Taibbi wants us to do.
burnspbesq
@That’s Master of Accountancy to You, Pal (JMN):
I haven’t thought systematically about securities law since the bar exam, but my guess would be that there is some provision in the 34 Act that could be the basis for an SEC rule to that effect.
burnspbesq
@Gen. Jrod and his Howling Army:
Fail. None of those people need to be destroyed – just ignored or mocked when they’re wrong, and applauded on the increasingly rare occasions when they’re right.
Nick
@cmorenc:
and here’s the problem…I don’t know how you can not see that this is true. It’s like saying the people think the sky is blue because we’ve been led to believe it all our lives.
The financial industry finances all other industries, without it there would be no realistic way of moving money, and the moving of money is what an economy is.
leo
@Gen. Jrod and his Howling Army: Hamsher, Greenwald, and Taibbi are hippies? I don’t think so. Some of my best friends are hippies and they’re mellow and peaceful people. These other guys are just assholes.
That's Master of Accountancy to You, Pal (JMN)
@burnspbesq: In the case of Taibbi, it isn’t so much that he’s right increasingly less often. It’s that he’s writing about technical subjects, especially finance, more and more often. He’s a glaring example of the journalistic conceit that you don’t have to know anything about a subject to cover it. Much of the positive response to him is evidence that many of the complaints we all make about the media are really just complaints that they don’t cover things the way we want to see them covered. Our claims that the mainstream media has a broken process for producing the news is just cover for that, because Taibbi is guilty of the same process errors.
When he writes about things he knows, which is primarily people divorced from a technical subject (if he wrote a column strictly about what a pompous ass Larry Summers is, it would probably be very good, so long as he leaves the economics out of it), it’s obvious that Taibbi is smart. He’s also a fabulous writer. The combination of those two things are half the reason I’m so hard on him. He could be so much better.
FWIW, my dislike of him has nothing to do with defending Goldman. Having actually watched them at work in a professional setting, I’ll put my hatred of the fuckers right up there with anyone’s. If Taibbi did an expose of how they live with the money they were paid, and left the finance out of it, I’d probably think it was great. But he needs to stay away from the details, because he has no idea what he’s talking about.
That's Master of Accountancy to You, Pal (JMN)
@burnspbesq:
I. on the other hand, am a former trader and now accountant. So, while I’ve read most of the 1934 Act, it comes without the knowledge of what could be done with it. There’s a lot of talk in it about broker/dealers, but I’m not sure that there’s anything that could be used to force partnerships.
On the other hand, as I said, it should be possible to declare that all non-exchange traded contracts are not subject to limited liability. To me, this would have the advantage of covering the contracts, and not a particular form of business structure. Among other things, it might reduce the incentive for the exchanges not to due their own due dilligence.
Bob Loblaw
@That’s Master of Accountancy to You, Pal (JMN):
Actually excepting you JMN (maybe, I don’t know your partisan ardency offhand), this has been another installment of obfuscation by nitpicking.
Annie did her own post a disservice by citing the wrong section of the column. It was actually a very comprehensive and well-done survey of the finreg legislative process. Well sourced too, with an actual on the record admission by a member of the Democratic coalition that his leadership had boned him over to weaken the bill.
But an article detailing Democratic leaders in the Senate and White House doing the legislative dirt is of no interest to people like burnspeq. They don’t know how to handle it. So instead of it being about Chris Dodd and Tim Geithner skewering capital restrictions on proprietary trading, it became about how Taibbi doesn’t know how to calculate liability for TARP, or how pension fund criminality is also responsibility for the securitization market. What any of this has to do with Dodd, Frank, Schumer, and Obama being in Wall Street’s stead when the chips were down is immaterial, obviously. But what’s partisan hackery when you can dress it up in high-minded journalistic purism?
That's Master of Accountancy to You, Pal (JMN)
@Bob Loblaw:
But here’s the problem. Because Taibbi doesn’t understand his subject, he doesn’t understand that the compromises still left us with a useful bill. Let’s start with some other things he gets wrong:
Wrong. Cleared credit default swaps had nothing to do with the AIG collapse. A large part of the problem is that they weren’t cleared. This can become a bit confusing, because OTC parties transferring collateral is often called “clearing,” but is not what is meant here. In order to be exempt, the derivatives will have to be cleared through a central party.
Well, uhm, yeah. They trot out this justification because it’s true. Trust me; I’ve watched it happen. (I didn’t do it personally; I was a market maker, but I did talk to people from the other parts of the business.) If you prevented banks from taking out contracts to hedge positions, they’d just fold up and not do much lending at all.
Derivatives contracts are used as often, or more often really, to reduce risk than to simply speculate. Once you net out the hedges, the size of the derivatives markets shrinks drastically. In the same way that a farmer uses a derivative (typically a future or an option) to reduce his exposure to commodity price risk, banks use them to reduce exposure to several different types of risk, including counterparty risk and interest rate risk.
The key isn’t whether or not derivatives trading is permitted for hedging. It’s how “hedging” is defined, and that battle hasn’t taken place yet. It’s going to be done by regulators. I’m an accountant, and I think FAS 133 (no, I don’t know which part of the fucking codification it is; I just finished learning one set of numbers and they went and changed the whole system on me) has a pretty good one. It would require some fleshing out, but is a good base to start from. We’ll have to see.
Yeah, because the news of how energy derivatives brought down the economy has been non-stop. The reason it won’t change the commodities markets that much is because those markets were pretty much playing by the new rules anyway. Unlike credit default swaps, commodities futures and options trade on exchanges. That’s pretty much all the CBOT and the NYMEX do. The main exceptions are parties like the airlines who want to hedge their exposure to oil prices farther out in time than the exchanges trade contracts.
There are at least a half dozen other false or misleading statements in there that I could use as examples. The point isn’t to nitpick Taibbi; it’s to point out that he really has no idea what he’s talking about. He does not have enough grounding in the subject to have any idea what’s important and what’s trivial, or what the actual consequences of something might be. However, he’s more than happy to pretend that he does in order to sell you magazines or, more directly for him, make sure he’s the center of attention.
Note also that the idea that it takes 60 senators to pass anything seems unworthy to mention. He says that Chris Dodd must have wanted something to be in the bill, because otherwise he wouldn’t have been outmaneuvered by a beginner like Scott Brown. That’s bullshit. All Scott Brown had to do was say, “I’m not going to vote for it unless this language is in the bill,” and no one can outmaneuver him, unless you can get some other Republican to change their mind. His “detailing Democratic leaders in the Senate and White House doing the legislative dirt” is so detailed that it utterly forgets the big picture, thus stripping all of the context and meaning from his history.
I’m not going to argue that Chris Dodd and Chuck Schumer bailed a lot of water for the financial industry. Tim Geithner I’ll defend, because I think that over the last three years a lot of people have used him as the fall guy for decisions they made but didn’t want to take the heat for. As a piece to understand what happened, though, this one has too many errors and too many omissions to be at all useful.
burnspbesq
@Bob Loblaw:
I refuse to engage in a battle of wits with an unarmed man. Run along, now.
FlipYrWhig
Shorter SnarkyShark: I’m mad! I want to fight! Mom! Look at my mad face! Mom! Mom! You’re not looking! Mom! I’m mad! See? Look!
FlipYrWhig
@That’s Master of Accountancy to You, Pal (JMN):
I have no idea why that’s hard for people to comprehend. Does it suck that every policy has to truckle to the whims of Brown, Snowe, and/or Collins? Of course. How can we fix that? No one fucking knows. You can make Democrats cave by calling them unpatriotic and big-spending liberals. They hate that. How can you make Republicans cave? Anyone have any ideas? Until we invent an implantable device that gives Republicans shame, we’re stuck like this.
Bob Loblaw
@That’s Master of Accountancy to You, Pal (JMN):
Which part of that statement doesn’t apply to the entirety of US financial journalism? Let’s name names here. What’s the list of reporters genuinely qualified to speak on the Basel III developments, for example?
If we apply your standards, then there’s no point in conferring any significance to any financial journalism done in this country by any major publication. They’ll never get anywhere close to 100% of the picture, ergo they’re completely useless. In which case, what the fuck are you doing posting 25,000 words on a Sunday about this stuff?
Nothing you’ve posted is germane to developing a competing legislative history of the bill. We can throw Taibbi’s advocacy journalism out of the window, fine, no argument there. There is no discerning the bill’s merits or demerits as a whole from his piece. Or anything that he has or will write. This is now process talk. Did Treasury choose a legislative course that maximized the bill’s effectiveness or not, assuming a lenient margin of error due to the Senate? Which relevant stakeholders were they representing?
These are the questions you again dodge having to answer. I don’t blame you. The answers are characteristically unpleasant. It is easier to just say that It Was All Russ Feingold’s Fault. But if know-nothing Scott Brown was really all alone (having bucked party unity) in the conference committee armed with nothing more than every Boston hedge fund’s premium talking points, what are you really saying? Or are useful idiots like Brown useful to all mutual beneficiaries? After all, it’s not like there was a long pattern of trying to carve up regulations on proprietary trading at every turn, was there? Least ways from both party’s leadership, nope, only smoke. Never any fire in Washington…
@burnspesq
That was just sad. You need to use less starch when doing your laundry. Even your insults are stiff. Ha, did you get it? I just came up with a comeback from a 1950s stand-up comedy routine too! Let’s do some more.
That's Master of Accountancy to You, Pal (JMN)
@Bob Loblaw:
No, it’s all germane to my point, which is that you can’t trust Matt Taibbi to provide coverage of it. The fact that he has no idea what he’s talking about means that he has no idea what the import of any of the conversations he writes about means. He doesn’t actually have any idea who is trying to overcompromise, or who is trying to pass the best bill they can, or who is trying to kill something because they’re in the pocket of the financial lobby, or who is trying to kill something because it’s really a bad idea.
And, no, there isn’t any other coverage out there that I know of that marries knowledge of the subject with knowledge of backroom discussions. The proper response to that is to say that we don’t know what happened. We probably never will. Many of those involved will eventually write memoirs, but each will be biased in his own favor, as will all of the leaks in the inevitable Bob Woodward book.
What it is not a good idea to do is to decide that, since we can’t trust any of the people writing this stuff, that we should just latch on to what someone whose narrative fits our preconceived notions of what probably happened and run with it. WE DO NOT KNOW. I can’t provide you with an alternative legislative history, because I don’t know. And you don’t, either. Matt Taibbi sure as hell doesn’t know.
If you want information strictly on the desirability and likely consequences of different reform proposals, the Financial Times has some pretty good coverage. The news pages of the pre-Murdoch Wall Street Journal would have as well, but that no longer exists. Beyond that, you read blogs. There are some good ones out there, not all of which I agree with (Yves Smith, in particular, has gone downhill and fallen in love with being in opposition; on the subject of exchange trading, she has completely changed her tune) but they have no idea what’s going on in closed door meetings.
Of course there were. There’s a big problem, though. Some proprietary trading is a good thing, and shutting it down would have lots of bad consequences. Hedging is at the top of the list. Banks need to be able to do that. So, taking the Matt Taibbi approach of just being mad about everything and demanding MORE, MORE, MORE is destructive.
That means that some of the people trying to water down the Lincoln rule were the good guys. Not all of them, certainly, but some of them. And we simply don’t know who falls into which camp. I have plenty of suspicions that Dodd and Schumer were on the wrong side. At the same time, I’m pretty sure Barney Frank, despite the depiction of him as conniving to water the bill down that Taibbi presents, was probably on the right side for the most part.
Tim Geithner I honestly have no idea about; as I said, he’s been used as a fall guy so many times, and seems so disinclined to defend himself in public, that I don’t think any of us know what his views really are, or what he’s really pushing for. That serves to make him everybody’s punching bag. I see a guy who has been a dedicated public servant his entire adult life, who has never taken his work history and used it to cash in as he surely could have, and conclude that, at a minimum, he’s arguing what he thinks is right rather than being in someone’s pocket. Even without knowing exactly what his views are, I respect the guy a hell of a lot, simply because he’s clearly committed to doing his job, and because he also clearly isn’t seeking the limelight and has a willingness to roll with the punches that I couldn’t possibly manage.
I think we can dismiss Saint Russell of Janesville by noting that he is adamantly opposed to reforming the filibuster.
I don’t doubt that some Democrats tried to weaken the financial reform bill in some bad ways. I’ve named Dodd and Schumer as likely suspects. I’ll throw in Ben Nelson, Evan Bayh as vocal idiots, and posit that Jim Webb, Mark Prior and possibly Diane Feinstein were less than useful behind the scenes.
So, in some sense, you are correct that there were Dems who hid behind the cover of Scott Brown to get things they didn’t want to stand for publicly. However, Taibbi essentially argues that everyone who compromised things was really a sellout, and that’s flat out wrong. It’s like the people during the health care debate who thought that they had been sold out by Bernie Fucking Sanders. Sometimes, people compromise because it’s the only way to get anything passed. Having listened to him many times on the subject of financial regulation, I’m pretty sure that Frank falls into this category. This is also where I think a lot, though not all, of the compromise from within the administration comes from. For better or for worse (and I don’t think we really know which it is), this is the way they play the game: they compromise early and often in an attempt to build a coalition. They are extremely conflict averse, and I don’t think that that’s the categorically bad thing that a lot of you do.
Regardless, arguing that Dodd was weaseling by letting Brown outmaneuver him is such a transparently dumb argument that it helps to cast Taibbi’s judgment about everything else into serious doubt.
Bob Loblaw
@That’s Master of Accountancy to You, Pal (JMN):
You didn’t seriously answer my rhetorical question with that answer, did you? If you couldn’t come up with anybody beyond the FT, you had to turn to the fucking Journal, I think you proved my point anyways.
We can play shoot the messenger until the end of time, and never be irrational in doing so. Because the messenger’s always full of shit. So what exactly are you advocating? You’re interpretation is no more objective than any other. Admiring Geithner’s (legitimate) work ethic, is every bit the relativist position to take.
If there’s no way to document corruption anymore, can we really say there is any to begin with?
That's Master of Accountancy to You, Pal (JMN)
@Bob Loblaw:
Right here, you really demonstrated that you have no fucking idea what you are talking about. Pre-Murdoch, the Wall Street Journal was the best newspaper published in America. Admittedly, it had a narrower focus than something like the NYT or the WashPost, but they did do coverage other than business. For instance, guess which of those three papers did major work breaking the early stages of the Abu Ghraib story. Here’s a hint: it generally has a business focus.
You are being clouded by the fact that the Journal doesn’t have a comics section. In its place, they have a three page exercise in absurdist, satirical prose every day. Really, it’s brilliant. Better than Sadly, No! Unfortunately, like a lot of satire, it goes over the head of many of its consumers, and they take it seriously. Such are the dangers of good comedy.
However, the staff that produces this section and the staff that produces the news-oriented rest of the paper are (or at least were; I’m not so sure anymore) completely separate and had nothing to do with each other. In truth, they hated each other, as you could tell by the days when the news staff deflated the attempts at satire by printing the real version on the front page.
Sadly, it has gone downhill. It’s still pretty good, on a number of topics (and downright essential for certain kinds of business news), but for overall quality, it has definitely been passed by the Financial Times, which always did good work. It’s not American and so it doesn’t focus on our news as much as the WSJ, but that’s not necessarily a bad thing. It does have quality reporters, who generally do know the subject they are covering. It also has an opinion section, which has some very good people writing for it. I don’t always agree with them, but they don’t spew the kind of drivel that so plagues American journalism. I tend to ignore Niall Ferguson, who is vapid and unhelpful, but Martin Wolf is indispensable.
Honestly, I’m not sure what your point is, so you may be right.
I’m advocating that you slow done on throwing around accusations given that you don’t really have the knowledge you think you do. Treat everyone writing about it with a high degree of skepticism.
I’m advocating that writers covering a technical subject, which finance is, need to know about it before we can take their points seriously. Taibbi continually makes basic errors, such as the time he cited that there was $26 trillion at risk in the financial bailouts without understanding that “notional value” does not denote what’s actually on the line. Basic, basic errors that an undergraduate course in finance would have prepared them to avoid. (Unfortunately, not the first finance class, since the fuckers generally make you take something about corporate financing decisions first, which introduces a bunch of mathematical tools you’ll use a lot, but is mostly complete bullshit.)
Given the frequency of those kinds of errors, Taibbi just shouldn’t write about the subject. He either has no idea what is going on, in which case his writing can’t be trusted, or he’s so enthralled with his narrative that he treats basic facts with a combination of sloppiness and dishonesty, in which case his writing can’t be trusted.
There’s plenty of corruption that we can document. Let’s start at Goldman, which just paid out a half billion dollar settlement for one case of it. Let’s start with the fact that can see the pro quo with a bunch of Senators (campaign donations and other sundry items). However, we generally can’t see the quid. (My high school Latin teacher would undoubtedly throttle me for those last two sentences.)
And, yeah, we’re fucked. If the press doesn’t want to do its job, it’s really hard to fight insider corruption. We know it’s there, but we can’t necessarily pin any particular action to a particular person, particularly the way Taibbi throws around accusations with no reference to any context. We sure as hell ascribe motives to individuals, as much as Taibbi wants to pretend that he can read minds without actually talking to someone.
We’re all going to have to come to grips with knowing what we don’t know. I hope that, once the old media giants die off due to an outmoded business model, what replaces it will do a better job of real journalism. My fear is that the same advances that killed off the old media will also eliminate any need the politicians had for a mainstream media altogether; I’m afraid that Sarah Palin and Sharron Angle are the wave of the future, at least in terms of media process.
We’ll have to see. I honestly don’t know what lies ahead, but the present disgusts me, for a lot of reasons.
SnarkyShark
Shorter FlipYrWhig
Clap louder
And shoot the messenger
Gen. Jrod and his Howling Army
Alright, the word comes from on high: Taibbi must never write about finance again. Nor, for that matter, can anyone without experience in the field write about it.
Where do you plan to find a writer to replace him? Remember, we need someone who was 1) a industry insider who 2) is willing to work against the friends and organizations that showered him with wealth, and 3) whose writing is engaging and clear enough to be understood by anyone, even those who haven’t worked in finance for 20 years. This person should also 4) be telegenic and entertaining enough to not only get onto cable news, but 5) quick-witted and self-assured enough to win arguments against the usual gaggle of wealthy shills, and still be invited back.
Are you volunteering for the gig, JMN?
So fucking sorry that Taibbi isn’t perfect, but he’s what we got. The other 99% of the media is dedicated to the idea that Wall Street is our rightful owner. Removing Taibbi from the equation doesn’t mean the media would suddenly be full of super-thoughtful and never incorrect critics of the FIRE sector, it’d just mean one less of the very, very, VERY few high-profile critics of the FIRE sector, and the only one ever heard by the vast majority of Americans who don’t enjoy poring over spreadsheets with a red pen.
We’re in the middle of a fucking class war. Maybe you’ll be fine, but most of this country’s people are being ground down into paupers while FIRE is playing the system to suck up millions upon millions every day. I’m just glad that someone with a microphone is willing to say so.
Gen. Jrod and his Howling Army
One more quick point that will probably never be read: why do all the so-called pragmatists who constantly scream at the nasty hippies for letting the perfect be the enemy of the good when it comes to legislation also seem to think that nothing less than sublime, ideal perfection is acceptable for pundits?
Gotwolfy
@jaleh:
The reason you cannot give credibility to anyone who tought the Iirak war was a good idea is because only an extremely moronic idiot would not have the capacity predic what would happen if the USA when to war with irak.
And since there is no current way to render somebody smarter we can conclude that any of those Extremly moronic idiot opinion are stupid. treating those opinion seriously would be rewarding stupidity and that’s bad for humanity.
There should be a price to pay for being wrong on something so easy to predict.
Comrade Kevin
When this post went up, I just knew that eventually the Oracle of Finance, JMN, would appear eventually to trash it, and Taibbi.
W
The problem isn’t that Taibbi isn’t perfect, or that he is “less than sublime, ideal perfection” – the problem is that he is terrible.
Now, that doesn’t mean that he isn’t useful, in the current environment, for swaying public opinion. However, it does mean that we should condone his writing while keeping in mind that it is composed of decently crafted gibberish, and allows us to laugh heartily at those comments early in the thread that attempted to defend Taibbi’s points.