It's clear to me now. I'm just wondering when or how it was that Uncle Sam came to owe its soul to the company store, Goldman Sachs? And would it be more accurate to argue that the entire earth owes its soul to the company store, Goldman Sachs?
You know what a "company store" is right?
What some businesses use to keep workers trapped in poverty and servitude forever. You read about these kind of stores in The Grapes of Wrath. And heard them lamented in the old song, "Sixteen Tons."
You load sixteen tons, and what do you get?
Another day older and deeper in debt.
Saint Peter, don't you call me, 'cause I can't go;
I owe my soul to the company store...
Before I get too much further in this diary, I have a confession to make. I am someone who succumbed to the fear put out by Paulson and the president and out of my trust in Barack Obama and supported the bailout, especially after the first attempt at the bailout failed and the stock market had its faceplant in response.
And then after the Congress passed the bailout bill, I saw stocks actually go down, and I felt deflated. And then I saw the markets open today and continued to see money racing out of the stock market and into the relative safety of U.S. treasuries (who our Congress also just gave $700 billion of our tax dollars), and I felt duped.
And then I found out the man named by former Goldman Sachs CEO and Treasury Secretary Henry Paulson to oversee the TARP program was Neel Kashkari, also a former Goldman Sachs executive and read about how the treasury may hire even more executives from Goldman Sachs and other private investment firms to help them run their $700B Uncle Sam-backed hedge fund. I started thinking about all the other former Goldman Sachs execs in politics and government like Clinton's treasury secretary, Bob Rubin, and current White House Chief of Staff Josh Bolten and World Bank President Robert Zoellick to name just a few more examples. Goldman Sachs alums also head the NY Stock Exchange, Citigroup and Merrill Lynch, and upon realizing this I got concerned.
And then I got this song stuck in my head...
Despite more contemporary songs like "Material Girl" being on the radio when I was a kid, I learned the words to "Sixteen Tons" because they were taught to me by my grandmother (I called her Baba) when she babysat me after school. She was born in 1915 in Southern Illinois coal country to Eastern European immigrants who didn't speak English and her father worked in a mine and lived "Sixteen Tons" for many years. She told me about how when one of her younger brothers was born her father and some of his friends were miraculously spared dying in the coal mine because they had been out celebrating that birth when a big collapse happened.
Her stories about the challenges she and her family faced before and during the Great Depression (for example, having to drop out of her senior year of high school in 1932 and give up her dream of being an English teacher to go work in a family friend's grocery store where she was paid in groceries) had a big impact on me and even though she passed in 2004, ever since they started talking on the news about the worst economic conditions since the Great Depression I can't stop thinking about her and wishing to know what she would have to say about all this.
She was the one who made me a Democrat by pointing out how unfair Reagan was being to ME in saddling me and my generation with a $4 trillion National Debt due to his out-of-control peacetime deficit spending when I couldn't yet vote. She didn't care for the first Iraq War either as to her it couldn't be more clear that it was all about oil.
But it's because of her and the fondness with which she spoke about FDR and JFK and other Democrats of her younger years and how they inspired her passion about voting and politics (she was an election judge for decades) that I always loved the government and believed in its potential to lift people out of poverty because I knew the New Deal she raved about from personal experience had put both sets of my grandparents and their children and subsequently me in the middle class so that unlike my great-grandfather I would never have to work for the company store.
Or so I thought... until I started considering the way I am already working for the company store with the income taxes I pay my government and with the government now using that money to buy worthless crap from Goldman Sachs under the threat that Sachs and the rest of the Masters of the Universe on Wall Street will unleash total global financial meltdown if they don't get more money to play with after they already lost so much of my 401k savings.
And then I started looking at Wikipedia to try to get a sense of how or why Goldman Sachs has so much power.
The Goldman Sachs Group, Inc., or simply Goldman Sachs (NYSE: GS), is a large global bank holding company that engages in investment banking, securities and investment management. Goldman Sachs was founded in 1869, and is headquartered in the Lower Manhattan area of New York City at 85 Broad Street.[1] Goldman Sachs has offices in all major world financial centers. The firm acts as a financial advisor and money manager for corporations, governments, and wealthy families around the world. Goldman offers its clients mergers & acquisitions advice, underwriting services, asset management, and engages in proprietary trading, and private equity deals. It is a primary dealer in the U.S. Treasury securities market.
Hmmmm... what's a primary dealer?
A primary dealer is a bank or securities broker-dealer that may trade directly with the Federal Reserve System of the United States.[1] They are required to make bids or offers when the Fed conducts open market operations, provide information to the Fed's open market trading desk, and to participate actively in U.S. Treasury securities auctions.[2] They consult with both the U.S. Treasury and the Fed about funding the budget deficit and implementing monetary policy. Many former employees of primary dealers work at the Treasury, because of their expertise in the government debt markets, though the Fed avoids a similar revolving door policy.
Also...
The primary dealers form a worldwide network that distributes new U.S. government debt. For example, Daiwa Securities and Mizuho Securities distribute the debt to Japanese buyers. BNP Paribas, Barclays, Deutsche Bank, and RBS Greenwich Capital (a division of the Royal Bank of Scotland) distribute the debt to European buyers. Goldman Sachs, and Citigroup account for many American buyers. Nevertheless, most of these firms compete internationally and in all major financial centers.
So essentially these companies --- like drug dealers that profit from the addictions of junkies --- make profits off of the government's addiction to deficit spending and through the treasury securities market they trickle up government wealth from the taxpayers to rich people who like buying paper from Uncle Sam more than actually investing in creating jobs in the private sector or buying tangible products from manufacturers, essentially?
I don't know about you, but this sounds like kind of a scam. I bet a big reason that Congress and the White House don't do anything about it is all the campaign cash that Goldman Sachs sends to Washington. Well at least Goldman Sachs has this awesome reputation as a pillar of the financial community so we have no reason to doubt them, right?
In the early 20th century, Goldman was a major player in establishing the initial public offering market. It managed one of the largest IPOs to date, that of Sears, Roebuck and Company in 1906. It also became one of the first companies to heavily recruit those with MBA degrees from leading business schools, a practice that still continues today.[citation needed]
In 1929, it launched the Goldman Sachs Trading Corp., a closed-end fund with characteristics similar to that of a Ponzi scheme. The fund failed as a result of the Stock Market Crash of 1929, hurting the firm's reputation for several years afterward.
In 1930, Sidney Weinberg assumed the role of senior partner and shifted Goldman's focus away from trading and towards investment banking. It was Weinberg's actions that helped to restore some of Goldman's tarnished reputation.
Ponzi scheme, eh? That doesn't sound very good. Well at least they learned their lesson about not mixing investment banking with securities trading, right? Oh except they didn't learn the lesson and they were back trading again within 20 years and have been expanding into every single facet of the financial sector in every market of the world ever since and they are the only firm that seemed to have come up roses on the subprime mortgage mess while the rest of the world economy is going to hell in a handbasket over it. Yet even if it would only be fitting that this company be left to die over its greed and incompetence and sullied reputation, because it is one of the U.S. government's "primary dealers" used as a conduit to finance our country's debt, we can't let them fail. So basically Goldman Sachs owns us, the taxpayers. I think they're our company store.
And even more depressing is the fact that it's not just the federal government they have their fingers in. This company shook down New York state for subsidies to keep from moving the firm and its workers overseas.
Also in 2005, Goldman Sachs received criticism from civic groups and New York City politicians when they received approximately $1.6 billion in taxpayer subsidies (mostly through Liberty Bonds) from New York City and state taxpayers to finance the Firm's new headquarters near the World Financial Center in Lower Manhattan in return for a commitment to keep at least 9000 employees and a major trading operation in Manhattan. It also comes with the expectation of the creation of at least 4000 new jobs by 2019.
What the hell? $1.6 billion in exchange for 13,000 jobs? So ostensibly New York taxpayers are paying the first $123,000 of every one of those employees' salaries? Ridiculous.
And even though strapped state and municipal budgets can't print more money or securities like the federal government does to finance their deficit spending as a result of less tax money filtering down from the federal government and outsourcing costing them so much revenue, Goldman Sachs has made things even worse by convincing some of those non-federal goverments to sell off real assets to private investors through Goldman.
Recently Goldman Sachs has been increasingly involved in both advising and brokering deals to privatize major highways by selling them off to foreign investors. In addition to advising Indiana on the Toll Road deal, Goldman Sachs has worked with Texas governor Rick Perry's administration on privatization projects, and according to John Schmidt, the former adviser to the Chicago mayor's office, it was a Goldman Sachs representative who first pitched the city on the idea of leasing out the Skyway. Goldman Sachs has played a major role in advising states on how to structure privatization deals—even while positioning itself to invest in the toll road market.
America, it seems to me that our elected officials are giving away our country to Goldman Sachs! When will we say ENOUGH to them?
Can Goldman Sachs be reigned in before they own us all? Or thanks to the cowardice of our elected officials in the face of potential electoral defeat for proposing higher taxes or spending cuts to actually balance budgets coupled with this nation's slavery for the past 30 years to free market ideology do we already all work for the "company store"?
I wonder if Dennis would have the same feelings he expressed here after he saw the bailout he so valiantly fought in the Congress come to pass.