Let’s Tax the Hell Out of These Guys

Matt Taibbi details some of the various ways in which Goldman Sachs’ record profits and very existence are the result of government largess:

The AIG bailout. Goldman might have gone out of business last year if AIG had been allowed to proceed to an ordinary bankruptcy, as AIG owed Goldman about $20 billion at the time it went into a death spiral.

The Temporary Liquidity Guarantee Program. So Goldman last year converts from an investment bank to bank holding company status, which now makes it eligible for a new program that gives commercial banks FDIC backing for unsecured debt. This is not a direct subsidy in the sense of us actually handing over a bunch of money to Goldman, but it’s almost better, in a way. This basically hands over a free AAA rating to the big banks and allows them access to mountains of cheap money, with all of us on the hook if something went wrong. . . .

The Fed Programs. By converting to a bank holding company, Goldman also became eligible for a whole galaxy of new bailout programs administered through the federal reserve like the Term Asset-Backed Securities Loan Facility (TALF); it also became eligible to borrow cheap money from the Fed’s discount window. . . .

TARP Repayment Bonanza. . . . As part and parcel of the TARP program, the banks that received money had strict guidelines imposed on them by the state in the area of how they could raise the money to repay. TARP recipients had to issue new equity according to certain parameters, and guess who one of the only major equity underwriters left on Wall Street is? That’s right, Goldman, Sachs.

Year to date, Goldman Sachs has paid out $11.36 billion in compensation. Even The Wall Street Journal is pissed off about how much money these guys are making.

Understanding the Meltdown and Bailout

Matt Taibbi of Rolling Stone is my newest hero. The Big Takeover is essential reading to understand what is going on between Wall Street and Washington.

People are pissed off about this financial crisis, and about this bailout, but
they're not pissed off enough. The reality is that the worldwide economic
meltdown and the bailout that followed were together a kind of revolution, a
coup d'état. They cemented and formalized a political trend that has been
snowballing for decades: the gradual takeover of the government by a small class
of connected insiders, who used money to control elections, buy influence and
systematically weaken financial regulations.

I also recommend Taibbi's take at The Smirking Chimp on the whining AIG exec who feels ill used because he's not going to get his retention bonus:

DeSantis has a few major points. They include: 1) I had nothing to do with
my boss Joe Cassano's toxic credit default swaps portfolio, and only a handful
of people in our unit did; 2) I didn't even know anything about them; 3) I could
have left AIG for a better job several times last year; 4) but I didn't, staying
out of a sense of duty to my poor, beleaguered firm, only to find out in the end
that; 5) I would be betrayed by AIG senior management, who promised we would be
rewarded for staying, but then went back on their word when they folded in
highly cowardly fashion in the face of an angry and stupid populist mob.

I have a few responses to those points. They are 1) Bullshit; 2) bullshit;
3) bullshit, plus of course; 4) bullshit. Lastly, there is 5) Boo-Fucking-Hoo.
You dog.

Reasons to Hope and Reasons to Despair

Riding up to Janesville, Wisconsin on Saturday, one of the women related a story about a canvasser in western Pennsylvania who was told by a woman who came to the door that she would have to ask her husband who she was voting for. When she called to her husband, the answer came back, “We’re voting for the n****r.” The woman turned to the canvasser and said without any embarrassment, “We’re voting for the n****r.” (The story is all over the blogosphere, but I have no idea whether it is apochryphal.)

The three women in the car thought that the story was shocking, but I found it very encouraging. I have no illusions about the existence of racism, but it is nice to think that people can overcome it sufficiently to see where their economic interests lie. My father was fond of saying that Ronald Reagan’s genius was in convincing a lot of members of the middle class that they could afford to be Republicans.

Speaking of the crazy things that people believe, I just started reading Matt Taibbi's The Great Derangement: A Terrifying True Story of War, Politics, & Religion at the Twilight of the American Empire. His take on Pastor John Hagee's support for Christian Zionism is brilliant:

[I]t was unmistakably an ingenious solution to the problem of how to rally
southern conservative Christians a few generations removed from their
cross-burning Klan days to the cause of Israel. If it turns out that it was
dreamed up by the same guy who figured out how to get laid-off Midwestern
factory workers to whoop for free-trade Republicanism by plastering the airwaves
with French-kissing men, I have to say, that guy deserves some kind of special
medal—a Triple Order of Satan, or something like that.

Part of Taibbi's research involved joining Hagee's Cornerstone Church and learning how to vomit demons into a paper bag at a weekend retreat.

I could not help but think of Sarah Palin as I read Taibbi's assessment of the possibility of rational political discourse with such people:

By the end of the weekend I realized how quaint was the mere suggestion that
Christians of this type should learn to “be rational” or “set aside your
religion” about such things as the Iraq war or other policy matters. Once
you’ve made a journey like this—once you’ve gone this far—you are beyond
suggestible. It’s not merely the informational indoctrination, the
constant belittling of homosexuals and atheists and Muslims and pacifists, etc.,
that’s the issue. It’s that once you’ve gotten to this place you have left
behind the mental process that a person would need to form an independent
opinion about such things.