Drum and Taibbi, Redux
Kevin Drum, who initially had some harsh words for Matt Taibbi’s Goldman Sachs piece in Rolling Stone, recants:
It’s a very good takedown of the modern financial industry and well worth reading. There are some bits here and there that I’m not sure Taibbi gets quite right, and I do think that he made a mistake in casting Goldman Sachs as the “engineer” of every bubble in the past century rather than merely an unusually big and enthusiastic member of a predatory gang that’s been ripping us off for a long time. This gives the piece a conspiratorial air that allows Goldman to laugh it off instead of being forced to engage with it, and that’s too bad. They — and everyone else on Wall Street — should be forced to engage with it.
This doesn’t strike me as such great praise. It’s hardly a novel point that financial institutions get greedy and short sighted and then cause panics and economic downturns. It’s also not a novel point that financial instituions, because of their great wealth, often get the government to do their bidding, and that this coziness allows them to take even greater risks, make more money, become less regulated and then leave the economy in shambles when it all falls down.
What made Taibbi’s piece different — and wrong for exactly the reason Kevin Drum says — was his contention that at every turn, one financial institution, Goldman Sachs, was being especially, even deliberately, nefarious. This is what gives it that “conspiratorial air.”
Furthermore, Taibbi takes pains to argue that Goldman was always leading the way, “engineering every major market manipulation since the Great Depression,” when in nearly all the cases he outlines, they were doing doing roughly what other companies were doing for the same reasons. This doesn’t, of course, excuse their shady behavior in the 1990s during the tech boom or in any other instance, but it certainly complicates Taibbi’s central thesis. One could argue that by showering so much attention on one company, Goldman, Taibbi weakens the more general, true and important argument that it’s the financial sector as a whole that we need to be worried about.
I understand why Taibbi wanted to focus on one well known, sucessful and politically influential institution to tell his story, but just because a certain way of presenting facts allows for a good story doesn’t make it more true.
