I've been wondering for several years how Goldman Sachs got to be so influential in Washington. Marcus Baram documented this at HuffPo in 2009: Goldman alumni are all over the capital, especially on the financial side. It's the money, of course; politicians love people with lots of money, because politicians need lots of money, all the time (which is another post, about campaign finance reform; but I digress). And there's the general assumption that if you have a lot of money, you must be really smart. You'd think the case of Bernie Madoff would alert people to the alternative explanation that, if you have a lot of money, you may actually be really crooked.
Goldman Sachs pissed off a lot of people during the bailout; here they are, the richest firm on Wall Street, and we the U.S. taxpayers, who are losing our jobs by the gross, have to come up with billions of dollars to bail out the banks so Goldman can keep paying its people multi-million dollar bonuses. They paid the money back to the government; but it's the principle of the thing. As far as I'm concerned, no man is worth the kind of money Goldman pays out in bonuses, I don't care if he's spinning straw into gold.
You've probably seen the latest development in this, but if not, here's a nice analysis from the Washington Post: "Goldman executives cheered housing market's decline." When the subprime mortgage security crash was taking down the economy, Goldman Sachs was betting both sides of the table. They were selling tottering CDOs based on subprime mortgages with one hand, and shorting the housing market (that is, betting that it would fall) with the other. The 9-year-old version of this is, "Heads I win, tails you lose." And Goldman won, really big. They're about to appear before the SEC, to discuss how closely they really did work with the hedge fund manager who was cherry picking mortgage pools he was sure would fail, so he could bet against them after Goldman sold them to their institutional customers - like, your pension fund.
Goldman Sachs used to be a private partnership. They went public in 1999, which allowed them to raise big money by selling shares in the stock market, without losing very much control over the firm. This also did two things for the men who ran the firm: it made them a barge-load of money, and it made them employees instead of partners. Partners are personally liable if a partnership fails. Employees just take the money and run. I wonder if any of the old-line Goldman partners are regretting that IPO now.
I worked in the financial industry (not for Goldman, ever) most of my professional life. It's a very strange world, and it's gotten much stranger over the last 20 years, as the lobbyists and the Republicans colluded to remove the restraints on financial firms that FDR put in, for damn good reasons, in the '30s. I want that financial regulatory bill to pass, but it isn't good enough. I want the Glass-Steagall Act back.
Irony is always arresting if not necessarily always funny. The irony this Earth Day is the burning oil rig in the Gulf of Mexico, on which NPR is reporting regularly. I heard a clip about it on Morning Edition today. The fire is now big enough that it shows on satellite images. If you listen to the clip, you'll hear industry analyst Scott Burke (sp?), of Oppenheimer, say this:
"The good thing about being offshore is that it's far enough away that you're not going to be polluting somebody's backyard, or it's not causing any potential danger to a neighborhood or anything like that, so politically I think the fallout should be relatively contained."
I listened to the clip about 5 times to make sure I quoted him accurately. Is that what you really think, Mr. Burke? As long as nobody sees this mess when they look out their kitchen window, it'll all be fine. The 11 missing oil rig workers are just a cost of business.
Look, BP isn't polluting somebody's back yard, here. They're polluting everybody's back yard. The oil slick from this thing is now one mile by five miles in size. We call the seas by different names, but essentially the Earth has one ocean. This is one localized instance of the general fouling of our own nest that we've been doing for 200 years. We've actually been doing it for a lot longer; but only in the last 200 years have there been enough of us using efficient enough tools that we can really do a thorough job. Throwing the soup bone out the door into the yard, while mildly messy, isn't in the same class as spilling five square miles of oil in the Gulf of Mexico - and besides, the dog will eat the bone. Apart from some bacteria (which we should be cultivating for this) I can't think of anything that eats petroleum.
Everybody's fussing about whether humans are or aren't responsible for climate change; of course we are. It's just a special case of the larger practice we've had for the last 200 years of dumping everything we have no immediate use for out into the world we live in. As I said, we're fouling our own nest. We're the only animal that does. The trouble with Mother Nature is that she always bats last. If we make the world too hot and messy for the human race to continue to live in, we will die; but Mother Nature will go on. She has no opinion about the relative merits of a world inhabited by us versus a world inhabited by cockroaches.
The local media have been full of the situation at the San Francisco Crime Lab lately. For you out-of-state people, SFPD discovered that one of their drug analysts may have been poaching the evidence, which led them to realize that a number of other things were wrong. The best summary I've seen recently is in this post from www.officer.com - I'm not surprised that the professionals have an eye on this.
In one sense, this is off my turf; I don't live in San Francisco. But I do live in a town with major budget problems and an understaffed police department.
The situation was discussed for an hour last week on Michael Krasny's Forum, on KQED-FM. As I listened, I heard several people comment that the lab had some of the latest greatest analytical equipment, but they'd never turned it on; they hadn't even calibrated it. The panelists spoke as if this was some inexplicable, possibly even deliberate, failure by the staff. "They kept using their older, less accurate methods."
Nobody on the panel seemed to understand why this should be. I can explain it, and it's very simple. This lab had 3 people doing the work of at least a dozen, against absurdly short deadlines (48 hours; read the summary). They had the latest equipment because somebody in the city-and-county arranged funding for the latest equipment - but the staff couldn't spare the time to get trained on it! With only 3 people handling between 13 and 19 cases a day, when the norm is around 2 per day, they barely had time to go to the bathroom! I'm not surprised that their lab protocols were sloppy and their records weren't kept properly. I'm not even surprised that amounts of cocaine somehow "disappeared."
The only good thing about this mess is that Chief Gascon has taken full responsibility for it. But I hope the city budgeters, here and elsewhere, can remember that it does no good to buy the latest, fanciest equipment for a staff so overwhelmed it will never have time to learn how to use it.
Many people don't understand what a local police department does and how it does it. I've been working with the Oakland, CA PD for several years, volunteering in the local Neighborhood Crime Prevention Council, attending the Citizens Police Academy, and now spending an afternoon a week answering phones and filing papers in the Recruiting division. So I'm not just talking through my hat. I've been out on a ride-along with an Oakland cop.