Thursday, May 19th, 2011 at 1:16 pm
It’s funny how the internet works. I’m just cruising twitter and see these super on point tweets from Odd Future’s manager Chris Clancy on the music business. Basically my exact same sentiment on the musical chairs going on in the music business. How are the same exact people sitting at different desks at the exact same corporations going to change anything? They won’t.
Ironically right as I was reading these tweets I was reading an interview Vice did with Matt Taibbi about an article he wrote that pretty much exposes how Goldman Sachs f*cked America in the a$$. It’s interesting because there are so many correlations to the financial meltdown in America to the meltdown of the recorded music industry. Basically there is an elite group of people who are profiting off a failing system that leaves the people working it with little to nothing. So I’m sitting here eating food off a street cart while these mofo’s are killing it with naked chicks on yachts. Needless to say I’m not very happy about it. This Matt Taibbi guy also goes in on f*ck boy bloggers such as myself who sensationalize content that isn’t even theirs to make money. Valid point. Look at me just re-posting this Vice interview all up in your grill mix.
You’re known for your analogies—how badly did Goldman Sachs f*ck us?
Taibbi: [laughs] I’d have to sit down and think about that. It was definitely a serious, all day thragging, though.
In your focus on the financial crisis, why did you decide to really zero in on Goldman Sachs?
After the 2008 presidential election we at Rolling Stone kind of collectively decided to do a story about the financial crisis. I did the first story, which was about the AIG bailout. When I was interviewing people for that story I noticed that every single person I talked to was like, “Those motherfuckers at Goldman Sachs…” and then, when I looked at it more broadly, it seemed like Goldman was a major player in something that had gone terribly wrong in every sphere of business that we were looking at. For instance, in the commodities business they were the first company to get these crazy exemptions that allowed speculators to act like consumers. The Internet stock bubble and mortgages—they were everywhere. So we decided doing a story on them would be good because it would allow us to kind of use one bank as a symbol for everything that had gone wrong on Wall Street. Plus, they have a sort of “we’re better than you” attitude that makes them a very attractive literary subject.
Would you consider them the biggest perpetrator from the era?
Well they’re the most successful investment bank. They’re the richest and the most politically influential. If you go back pre-crash there were five major investment banks: Goldman Sachs, Morgan Stanley, Bear Stearns, Lehman Brothers, and Merrill Lynch. Three of them don’t exist anymore. Goldman and Morgan Stanley are the only ones left, and you could make the argument that Goldman’s fingers were in more pies. Morgan Stanley’s former chief wasn’t the Treasury Secretary twice over [Robert Rubin and Hank Paulson].
Was what they did illegal?
Absolutely. It was definitely illegal. And if you read the Levin Report—and Goldman’s going to argue about this—companies are required to disclose adverse pertinent information to their clients. They cannot lie and make representations that aren’t true. If you read this report they did that. For instance, in one deal they told their clients they had “sourced” their assets from the street. In other words they had gone out on the open market and bought the assets to sell to their clients. In fact, it was coming straight out of their own inventory. In other words: they had bad inventory. Think of it as a car dealership. They had a lot full of cars with bad breaks and they told the client they went out and bought these cars somewhere else, when in fact they were coming right off their lot. That’s fraud. That’s lying. And there’s not just one instance of that. There are dozens and dozens of instances. We’re talking billions and billions in client losses. I think there’s a lot of information in the Levin Report alone that could put those guys on trial.
Why aren’t they being held accountable?
There are a lot of theories on that. The first thing you have to look at is that this is a very powerful, politically connected company. For decades they’ve been one of the top campaign contributors to the winning president. They have a number of their people serving in government—the number two guy in the Treasury right now is a Goldman guy. There’s also the fact that prosecutors are gun shy. You know there are probably five regulatory agencies that should have done this. You have your primary banking regulators like The Office of Thrift Supervision, The Office of the Comptroller of the Currency, The Fed, The SEC, and The Justice Department. All of them should have been doing this work and they haven’t, so obviously there’s something systemically wrong.
This is all seems so amorphous. Who exactly, can we point the finger of blame at?
You have to understand this is a decades long process. This has been a gradual wearing away at the ability to regulate. There have been huge changes in the financial services industry. There’s been a gradual move towards self-regulation. And so if you want to get angry the fact is that everybody shares a little bit of the blame. That’s kind of characteristic of this whole problem with the financial services industry. It’s fractional crime. Instead of stealing a trillion dollars from one person they steal 30 cents from everybody.
I feel like you’re one of the few journalists digging deep into this issue right now.
Well I think a lot of business journalists either worked for investment banks or hedge funds, or they want to be working for them.
They don’t necessarily want to be writing about people whose job is to make money.
Right, they want the actual job. And you know, it’s sort of like political journalism. If you’re going to go down the path of being a bomb tosser you’re not going to get invited to the party. So the difficulty in obtaining good sources is a factor. The other thing is that it’s a really, really complicated subject that’s very hard to make interesting. I think producers and editors are really reluctant—I mean how many magazines are really going to do an 8,000 word piece on CDOs [collateralized debt obligation]? Also, a lot of news organizations have this fear of rocking the boat. It’s just as easy to sell ads when you’re publishing pictures of cute puppies.
So one could argue that this is Exhibit A on how the culture of journalism in America has morphed into a very cosmetic institution.
Absolutely. The entire instinct of modern journalism is short, brief, loud headlines, right?
Getting maximum clicks. There’s not even really a focus on producing original content.
Exactly. Just go and take it from somebody else. Minimal amount of effort to sell the maximum amount of advertising. So the absolute opposite of that model is hiring a journalist to work on one story for two months and then put out a ten thousand-word article. The way I look at it is that this isn’t really a financial story, it’s a political story. It’s about how power works in America. They’ve figured out a way to hide power in these little regulations and the minutiae and it’s like a gigantic bulwark that separates ordinary people from those of influence. So in order to be a journalist you have to go through that whole maze. You need space and you need time, and nobody has it anymore.