Columbia Journalism Review: What the mainstream press can learn from Taibbi's Goldman Sachs takedown

[marmar]

Don’t Dismiss Taibbi
What the mainstream press can learn from a Goldman takedown

By Dean Starkman


Mainstream financial journalism is doing its level, eye-rolling, heavy-sighing best to stuff Matt Taibbi back into the alt-press hole he came from, but he’s not going along with it, and the mainstreamers in any case are making a big mistake.

The Rolling Stone writer cemented his status as the enfant terrible of the business press with “The Great American Bubble Machine,” a 10,000-word excoriation of Goldman Sachs, a muckraker’s-eye view of Goldman history, exploring the bank’s and Wall Street’s contributions to various financial disasters, starting with the Great Depression, skipping to the Tech Wreck, the Mortgage Wreck, the oil bubble of 2008, the bailout, and the looming cap-and-trade plan. Salted with “fuck”s, “shit”s and written with brio and hyperbole in the New Journalism tradition, it caught the financial community, which very much includes the financial media, utterly off-guard, unused as it is to hearing its flagship described as a “giant vampire squid wrapped around the face of humanity.”

Financial cognoscenti quickly sought to dismiss the piece as so much conspiracy-mongering perpetrated by a financial illiterate. Funny, but that illiterate’s piece ran more than a month ago, and people can’t stop talking about it. Perhaps not coincidentally, it feels like the general financial news has been all-Goldman, all-the-time ever since.

Ex-Deal and Wall Street Journal staffer Heidi Moore stepped into a buzzsaw last week week when she wrote one of the biggest non-sequiturs of the financial crisis, a column in Slate’s Big Money arguing that Goldman’s success comes from the fact it’s better at what it does than everyone else, therefore, apparently, criticism is unwarranted.

Will Everyone Please Shut Up About Goldman Sachs? The bank has a culture that works. So what?

As Taibbi (who needs no help defending himself) pointed out on his own blog, Moore addresses precisely none of the substantive criticisms that have been leveled at the bank, including big ones, like (1) buying predatory loans, (2) selling defective mortgage-backed securities while (3) shorting them at the same time, and (4) buying defective insurance from American International Group, then having those bad bets redeemed in full by government programs ratified by ex-Goldman executives. This is to say nothing of the role ex-Goldman alums played in laying the groundwork for the decade’s financial recklessness—Robert Rubin’s contribution to deconstructing financial regulation and Henry Paulson’s lobbying to loosen capital restrictions in 2004, to name just two. ........(more)

The complete piece is at: http://www.cjr.org/the_audit/taibbi_goldman.php