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Inside The Great American Bubble Machine

Matt Taibbi on how Goldman Sachs has engineered every major market manipulation since the Great Depression

In Rolling Stone Issue 1082-83, Matt Taibbi takes on "the Wall Street Bubble Mafia" — investment bank Goldman Sachs(click here to read the whole story). The piece has generated controversy, with Goldman Sachs firing back that Taibbi's piece is "an hysterical compilation of conspiracy theories" and a spokesman adding, "We reject the assertion that we are inflators of bubbles and profiteers in busts, and we are painfully conscious of the importance in being a force for good." Taibbi shot back: "Goldman has its alumni pushing its views from the pulpit of the U.S. Treasury, the NYSE, the World Bank, and numerous other important posts; it also has former players fronting major TV shows. They have the ear of the president if they want it." Here, now, are excerpts from Matt Taibbi's piece and video of Taibbi exploring the key issues.

Matt Taibbi On Goldman Sachs' Big Scam

The first thing you need to know about Goldman Sachs is that it's everywhere. The world's most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.

Any attempt to construct a narrative around all the former Goldmanites in influential positions quickly becomes an absurd and pointless exercise, like trying to make a list of everything. What you need to know is the big picture: If America is circling the drain, Goldman Sachs has found a way to be that drain — an extremely unfortunate loophole in the system of Western democratic capitalism, which never foresaw that in a society governed passively by free markets and free elections, organized greed always defeats disorganized democracy.

They achieve this using the same playbook over and over again. The formula is relatively simple: Goldman positions itself in the middle of a speculative bubble, selling investments they know are crap. Then they hoover up vast sums from the middle and lower floors of society with the aid of a crippled and corrupt state that allows it to rewrite the rules in exchange for the relative pennies the bank throws at political patronage. Finally, when it all goes bust, leaving millions of ordinary citizens broke and starving, they begin the entire process over again, riding in to rescue us all by lending us back our own money at interest, selling themselves as men above greed, just a bunch of really smart guys keeping the wheels greased. They've been pulling this same stunt over and over since the 1920s — and now they're preparing to do it again, creating what may be the biggest and most audacious bubble yet.

See Taibbi discuss Goldman Sachs' big scam.

See Matt Taibbi discuss Goldman Sachs' role
in the housing and internet busts.

See Matt Taibbi run down Goldman Sachs graduates with government positions.

See Matt Taibbi discuss Goldman Sachs' powerful influence

See Matt Taibbi react to Goldman Sachs' excuse

Click here to read Matt Taibbi's entire piece, "The Great American Bubble Machine."

Franken Jokes at Sotomayor Hearing

It turns out Supreme Court nominee Sonia Sotomayor and Sen. Al Franken were both Perry Mason fans as kids.

The two reminisced at Sotomayor's Senate confirmation hearings Wednesday, after the Minnesota Democrat noted that he and his family and Sotomayor and her family tuned in to the weekly courtroom drama on television.  And here I thought that this was actually a confirmation hearing.  What next a male stripper popping out of a cake for dramatic effect?