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Another story from the world of organized crime

In this morning's Times, Jesse Eisinger documents yet more criminal activity on the part of Goldman Sachs. Perhaps I should amend that and say it is activity that should be criminal, if it's not already. It is an opaque deal which, even upon full explication is sort of hard to follow, but as I understand it, the gist is that Goldman took a company private and engaged in financial deals with itself (operating under various guises), the effect of which was to drive down the value of the preferred stock in the company, enabling Goldman to, in effect, get control of that stock at bargain prices, thus cheating the shareholders to whom, in at least one of its guises, it owed a fiduciary duty. The challenge is to count the number of conflicts of interest that Goldman had.

Eisinger ends like this:

When deals like this go down, I feel like we are nation of Jake Gitteses, watching big bank deals with incomprehension. In “Chinatown,” the private detective asks the wealthy baron Noah Cross: “Why are you doing it? How much better can you eat? What could you buy that you can’t already afford?”

Well, I can answer that question, with yet another repetition of a quote from a different movie, Superman 3 in which the capitalist villain played by Robert Vaughan explains it as follows: “It is not enough that I succeed, everyone else must fail”.

Sidenote: It occurs to me that this story illustrates the relative political and economic impotence of the bottom .99 of the top 1%, many of whom must be among the investors porked by Goldman Sachs.

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