During the winter of 2008-2009, when I was just feeling my way through the first story I was writing for Rolling Stone about the financial crisis, I started to notice something amusing. One of the keys to talking to sources about any subject is clicking with their sense of humor, and I was noticing that with a lot of the financial people I was calling, I was missing laugh cues whenever anyone mentioned the investment bank Goldman Sachs. No one ever just referenced “Goldman”; they would say “those motherfuckers” or “those cocksuckers” or “those motherfucking cocksucking assholes at Goldman, Sachs.” It was a name spoken with such contempt that you could almost hear people holding it away from their faces as they talked, the way you do with the baggie of shit you have to pick up curbing your dog on the streets of New York.
After a few months, I also started to notice that every time someone wanted to provide an example of some sordid scam the investment banking community was into, they used Goldman as an example. The bank was also continually held up as a model for how certain firms used their connections with government to buffer business risk–Goldman, I was told, was expert at using campaign contributions as a kind of “market insurance” to hedge their investments. Many of the people I talked to were from firms that didn’t get particularly advantageous treatment from the government during the bailout season, and so I assumed their take on the crisis, and Goldman, was colored by that.
After writing one story on the crisis that was mostly about AIG, I suggested to my editors at the Stone that we do a piece on Goldman that we could use as a window into the whole world of investment banking, and what it’s been up to for the past few decades. We did the story; in retrospect we left out quite a lot.
But perhaps as interesting as the actual material in the original piece was what happened after we ran it, as the magazine and I got sucked into a public relations firestorm that was both bizarre and educational. My initial reaction to being blasted in the media by commentators from CNBC (“Stop Blaming Goldman Sachs!” read Charlie Gasparino’s rant; another on-air talent called me a “lunatic”), The Atlantic and other outlets was that this was just typical media turf-war stuff: a bunch of insiders angrily piling on someone who didn’t have any background in their area of expertise (which I definitely did not) and yet was not-so-subtly indicting them for falling asleep on the job.
That was definitely part of the story. If Goldman Sachs really was, as we’d described, little more than an upscale version of a cheap boiler-room pump-and-dump operation, then that definitely was an indictment of the financial press that almost universally praised the bank as a pillar of economic genius. If financial journalists like the Charlie Gasparinos and Megan McArdles out there took it that way, good–I meant it that way.
But when the uproar continued for more than a month–an eternity in news-cycle time–it was clear that there was something else at work. Looking back now, what I experienced in the wake of the Goldman piece was a lesson in a very subtle truth about class politics in this country.
Which is this: You can pick on the rich in an ironic, Arrested Development sort of way; you can muss Donald Trump’s hair; you can even talk abstractly about class economics using clinical terms like “income disparity.” But in our media, you’re just not allowed to kick the rich in the balls. The taboo isn’t so much the subject matter; the taboo is the tone. You’re allowed to grimace and shake your head at their shenanigans, but you can’t call them cheap crooks and imply that they aren’t somehow better or smarter than everyone else, at least not until they’ve been indicted or gone bankrupt.
Goldman was the ultimate embodiment of this media privilege. The most valuable item in all the bank’s holdings was its completely undeserved reputation for brilliance and efficiency. The narrative that Goldman had always enjoyed was a sort of ongoing validation of the Ayn Rand/Alan Greenspan fairy tale, in which their riches and power sufficed as testimony to their social value. They made lots of money, they were good at whatever it is they did; therefore, they were “producers” and should be given the benefit of the doubt. This fairy tale was deeply ingrained in the financial press, to the point where any suggestion to the contrary had to be attacked, regardless of the substance of those suggestions.
The abuse I took after my Goldman story came out wasn’t so much a media turf war but a defense of The Narrative. I believe now that there’s real fear of what happens once The Narrative blows up–because once we’ve ripped the rich to shreds for their crimes, what we’re left with is a whole bunch of broke people wondering where the hell their money went, without even a soothing fairy tale to help them get to sleep at night.
People in the financial community who actually worked in that world, the traders and the bankers themselves who joked with me about “those motherfuckers,” did not have these illusions. You’re not going to be good at making money if you need for there to be a halo around the moneymaking process. The only people who really clung to those illusions were the financial commentators, right up to the point where they became completely unsustainable. Within six months after this article came out, it was de rigueur even for wire services to reference Goldman’s “vampire squid” reputation. But by then the executives at Goldman didn’t worry all that much about their plummeting reputation–and that, in the end, turned out to be the most interesting part of the whole story. Goldman is not a company of geniuses; it’s a company of criminals. And far from being the best fruit of a democratic, capitalist society, it’s the apotheosis of the Grifter Era, a parasitic enterprise that has attached itself to the American government and taxpayer and shamelessly engorged itself on us all.
From the Book, GRIFTOPIA by Matt Taibbi. Copyright © 2010 by Matt Taibbi. Reprinted by arrangement with Spiegel & Grau, an imprint of The Random House Publishing Group, a division of Random House, Inc. All rights reserved.