Bubbles, Politics, and Greed

PrintEmail

There is a spectacular article in this month’s Rolling Stone. It’s called "The Great American Bubble Machine," by Matt Taibbi, and I encourage everyone to read it. I haven’t found an official link, so I would suggest a search if you can’t pick up the print version.

The article is a fascinating journey into the hypothesized role of Goldman Sachs in every major bubble since the Great Depression. Now it’s written in Rolling Stone's usual cynical tone, but the underlying message is hard to argue: greed prevails over consequences.
 
Time and again Goldman, and companies like Goldman, profit off the system, usually to the detriment of everyday investors and taxpayers trying to save enough to live a meager existence. It’s amazing how Taibbi draws a clear line to Goldman's involvement in pretty much every recent major financial scandal. Former Goldman execs and employees pop up in nearly every system-manipulating corner of the world. Most interesting is the clear link between political and private power. 
 
Another prominent message is that the system of power and wealth among a few is not party-specific, but more of a systemic infestation. All presidents and their administrations appear to have a history of cronyism and maximizing both the legislative system and the financial system to reap massive rewards. From bubbles under President’s Hoover, FDR, Clinton, Bush, and even Obama no one is spared. 
 
What does it all mean? What are the solutions? The article ends on a downer, conceding that this is the way of the world now. It is what it is. But I would say there is a solution and it comes down to individual choice of financial services providers.
 
Many brands are tarnished or bankrupt (see Citigroup, Merrill Lynch, AIG, Lehman Bros, Bank of America), while some like Goldman are profiting at your expense. The one distinction is that they are all enormous providers (suffering from “too big to fail” and “max profit syndrome”); there are many independent small and midsize shops out there more then willing to serve your needs in an ethical manner and put your interests first.
 
Find them and use them.