Neff Zone Column -- July 25, 2009

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Print Edition: July 25, 2009

THE BUBBLE MACHINE

"The Great American Bubble Machine" by Matt Taibbi should be required reading for every American. The article in the July 9-23 issue of Rolling Stone magazine presents a chilling saga of how the banking firm of "Goldman Sachs has engineered every major market manipulation since the Great Depression" http://www.rollingstone.com/politics/story/29127316/the_great_american_bubble_machine.

Now, lest you think that anything in Rolling Stone is bound to be leftist drivel, let me assure you that Taibbi takes administrations of every ilk to task beginning in 1929 all the way to the present. In recent history, he targets Robert Rubin (under President Clinton), Hank Paulson (under President Bush) and Mark Patterson (under President Obama). No one gets a free pass.

Says Taibbi: "If America is circling the drain, Goldman Sachs has found a way to be that drain...The bank is a huge, highly sophisticated engine for converting the useful deployed wealth of society into the least useful, most wasteful and insoluble substance on Earth – pure profit for rich individuals."

To this country's detriment, former Goldman Sachs employees have been inserting themselves into positions of influence within our government for decades. In fact, this is so pervasive Taibbi doesn't even try to compile a roster, noting it would be "like trying to make a list of everything." Suffice it to say that Goldman Sachs has people in position to manipulate our economy, something that dovetails into the firm’s stated mantra, "Long term greedy."

In the article, Taibbi divides Goldman Sachs' machinations into what he calls "bubbles." They include: The Great Depression, the Tech Stocks fiasco, the Housing Craze and collapse of that market, the fake Energy Shortage with $4 a gallon gasoline, and the rigging of the current Bailout Program. Each scenario is admittedly a bit laborious to read, but all logically depict a company with one goal in mind – making as much money as possible with no regard for taxpayers, investors, or ordinary citizens. They see all the "little people" as suckers to be fleeced time and time again.

A good recent example is the manipulation of gasoline prices by Goldman Sachs. As I've said before in this column, there is no gasoline shortage and the price fluctuations are due entirely to speculation. Cited in the article, Michigan Representative Bart Stupak observes: "The highest supply of oil in twenty years is now, demand is at a ten year low, yet prices are up." Taibbi explains this simply: "It wasn't the consumption of oil that was driving prices up, it was the trade in paper oil."

The final section of the article is a fast forward to today and an analysis of the latest Goldman Sachs scheme – carbon credits (better known as cap-and-trade). Under the guise of environmentalism, Goldman Sachs has "envisioned the fight to stop global warming as a carbon market worth $1 trillion a year." Adds Taibbi: "The new carbon-credit market is a virtual repeat of the commodities-market that's been kind to Goldman, except it has one delicious new wrinkle: If the plan goes forward the rise in prices will be government-mandated. Goldman won't even have to rig the game. It will be rigged in advance."

Don't expect the current administration to do anything to derail Goldman's plans. Goldman has already "invested" in the plan's passage. The company (and/or its employees) gave the Democrats $4,452,585 during the last campaign, donated $981,000 to the Obama campaign (making it Obama's top private donor), and greased Congress with $3.5 million in lobbying last year.

Taibbi sums it up by saying: "It's a gangster state running on gangster economics...there are (now) hidden taxes in every buck you pay."

"The Great American Bubble Machine" might seem easy to dismiss as just another conspiracy theory, but then how do you explain the following headlines in the New York Times last week: " With Big Profit, Goldman Sees Big Payday Ahead."

The report began with the stunning news that "Goldman Sachs is on course to dole out bonuses that could rival the record paydays of the heady bull-market years" You see, with banks going under, bailout money flowing, and people all across this country losing their homes due to banking scams and predatory lending programs, Goldman has earmarked $11.4 billion (that's billion with a capital B) "so far" this year to "compensate its workers." http://www.nytimes.com/2009/07/15/business/15goldman.html

Goldman's chief financial officer explained this jaw-dropping bonus payout this way: "We are performing well across the board. (The performance) reflects blocking and tackling every day by Goldman's employees"

This statement will make more sense to you after you read "The Great American Bubble Machine" because you will realize that Goldman Sachs considers all of us nothing more than tackling dummies.

Jim Neff is a local columnist. Comments to neffzone@gmail.com. Read Neff Zone columns online at www.neffzone.com/cadillacnews.