When Matt Taibbi goes off about Goldman Sachs being a vampire squid he is being a narrowly focused, easily manipulated shill of the progressive left that correctly sees the failures of Wall Street but misses the regulatory incentives that led to too big to fail activities—regulatory failure than is an inherent part of believing czars in Washington have any meaningful chance of devising effective rules to run a global economy that is constantly shifting, evolving, and expanding. Wall Street failed. Washington failed. But the answer is not more Washington.
But Taibbi, a contributing editor at Rolling Stone, is an equal opportunity skewerer. His take down of Dodd-Frank might have offered the wrong prescription for the financial crisis, but he nailed the ineffectiveness of what actually passed—well, stumbled—through Congress.
And now, for the real housewives of Wall Street. A few weeks ago the Federal Reserve was forced to release details on lending programs it set up during the financial crisis, and the information was shocking—well, unless you’ve followed the Fed for years. It really wasn’t earth shattering that they handed out billions to foreign banks, it was the specifics that were so spectacular. Like the $220 billion a couple of Morgan Stanley wives got to invest in a heads I win, tails you loose loan purchase opportunity. Taibbi profiles this travesty along with other great critiques:
“Republicans go mad over spending on health care and school for Mexican illegals. So why aren’t they flipping out over the $9.6 billion in loans the Fed made to the Central Bank of Mexico? How do we explain the $2.2 billion in loans that went to the Korea Development Bank, the biggest state bank of South Korea, whose sole purpose is to promote development in South Korea? And at a time when America is borrowing from the Middle East at interest rates of three percent, why did the Fed extend $35 billion in loans to the Arab Banking Corporation of Bahrain at interest rates as low as one quarter of one point?
Even more disturbing, the major stakeholder in the Bahrain bank is none other than the Central Bank of Libya, which owns 59 percent of the operation. In fact, the Bahrain bank just received a special exemption from the U.S. Treasury to prevent its assets from being frozen in accord with economic sanctions. That’s right: Muammar Qaddafi received more than 70 loans from the Federal Reserve, along with the Real Housewives of Wall Street.
Read the whole piece from Rolling Stone here.