touches all Americans. With friends placed on the Commodities
Futures Trade Commission, Goldman quietly secured an exemption from a Depression-era federal law, specifically the
Commodity Exchange Act of 1936, which limits the number of
speculators in the commodities market, stating that if speculation
gets too big in those basics of existence—corn, wheat, coal,
oil — it’s a risk to society as a whole. Armed with the exemption,
Goldman was free to set its traders loose in the commodities
markets to balloon oil prices even though oil production was up
and consumption was down. Due in part to Goldman’s manipulations, Taibbi writes, the average barrel of oil in the summer of
2008 was traded twenty-seven
times before it reached the consumer, and with the parasitic
middleman taking his cut
through aggressive — often lawless—interference in the laws
of the marketplace, we had
four-dollar-a-gallon prices that
crimped the livelihoods of tens
of millions of drivers.
For this good work, the
company demanded a bailout,
stretching its many arms to
twist the necks of these same
taxpayers. Goldman executives
were brought in to help plan
the bailout arrangements, for themselves and other banks, and
the $700 billion was dispersed mostly in secret, with little or
no oversight. They helped to oversee the AIG bailout, because
Goldman’s investments were bound up in AIG, and, as anticipated, when AIG received $85 billion at the direction of ex-Gold-manite Paulson at the Treasury, $13 billion was promptly routed
from AIG to Goldman. Goldman then machinated for its own
bailout, while Paulson opted to let Goldman’s chief competitor,
Lehman Brothers, collapse for the pickings. This had the benefit
of allowing Goldman to sop up Lehman’s share of the market,
so that Goldman, among the prime perpetrators of excess that
led to the crash, now grows even bigger, presumably to go on to
further excesses.
What must be understood is that this bailing out of bigness
is nothing new. It happened, for example, with Chrysler in
1979—$4 billion was allocated by Congress so the company
could continue making stupid decisions and crappy cars — and
with Long Term Capital Management in 1998, after the hedge
fund invested too much money in too much risk, which is just
the model of profligacy required for a company to achieve the
coveted status of “too big to fail.” The di=erence in the recent
bailout is only its size, stretching into the hundreds of billions
of dollars, saddling generations of Americans with government
debt larger than any single generation past had to contend with.
