The Oligarch in the Room

It is a primordial behavior of oligarchs everywhere and at all times to continue looting and plundering up until the very last bloody minute.  Without the existence of a sufficient countervailing force they have no incentive to do otherwise.  Take the money and prepare to run if necessary, or better yet hole up behind gated walls and privately secured enclaves.  This is the oligarch’s modus operandi, pursued even more energetically when the havoc he has sown envelopes all the lesser groups around him.

Goldman Sachs recently revealed earning record “profits” last quarter.  Record as in never before recorded by that institution.  Naturally, they also announced record “bonuses” would be dispensed in accordance with their return to “profitability”.  I am enclosing words such as “profits” in quotes because while they usually have no importance beyond mundane business accounting, in light of our current predicament and Goldman’s recent history they should now be considered political statements.  I will leave most of the important details to others (see links below), but allow me to briefly recount some of that recent history.

Lehman Brothers, one of the only true GS competitors, is allowed to go under.  In the minds of many this marks the start of the Great Crisis, although in reality this was simply a particularly sharp point on the continuum of disruptions that had already been going on for quite some time.

Goldman Sachs (heretofore referred to as GS) was peering into the abyss of insolvency (bankruptcy) until handed a taxpayer-financed injection of $10B via the infamous TARP bailout.  Recall, dear Reader, that Hank Paulson, previous US Secretary of the Treasury and former CEO of GS was the sole decider behind this decision.

GS would have been bankrupt, or certainly close to it, if not for Mr. Paulson directing an additional payment of $13B in taxpayer-financed money to the GS coffers in another series of opaque sole decider moments.  Interestingly enough, these payments were made through the government’s strangest special investment vehicle, also known as AIG.

GS raised $28B by issuing FDIC-backed debt.  Forget all the technical details, the truth is that this basically amounts to a huge pile of free money, financed by the tax payer of course.

I could go on, this list is by no means exhaustive, but I think you get the point.  The result of all this material support provided on the backs of the long-suffering, and undeniably ill-informed, public is that GS feverishly accelerates the trading and underwriting machine.  The result of which is the most recent announcement that they will be taking the money (which they refer to as “bonuses” and “salaries”) and (presumably) preparing to abscond.  Oh, and for good measure they will be using part of the leftovers to wage a bloody fight against any meaningful financial reform.

If you harbor any doubts that there exists, here and now, a small class of citizens who deem themselves separate, superior, and entitled to massive transfers of wealth from everyone else to them in perpetuity, you would be wise to re-consider your position.

Additional Reading:

Matt Taibbi (required for serious readers)
Peter Daou
Arianna Huffington
NYT
WSJ
Paul Krugman
Andy Kessler