Atlas Shrugs at Goldman Sachs Greed
Goldman Sachs, the world’s greatest and smuggest investment bank, has been sued for fraud by the American Securities and Exchange Commission. Few people understood that the crash had its roots in the lunatic greed-centered objectivist religion, fostered back in the 50s and 60s by novelist Ayn Rand of “Atlas Shrugged” fame.
Some people argue Goldman Sachs wasn’t guilty of anything except being “too smart” and really, really good at making money. This side of the argument was based almost entirely on the Randian belief system, under which the leaders of Goldman Sachs appear not as the cheap swindlers they look like to me, but idealized heroes, the saviors of a society where “greed is good”.
Rand’s fingerprints are all over the recent Goldman story. The case in question involves a hedge fund financier, John Paulson, who went to Goldman with the idea of a synthetic derivative package pegged to risky American mortgages, for use in betting against the mortgage market. Paulson would short the package, called Abacus, and Goldman would then sell the deal to suckers who would be told it was a good bet for a long investment. The SEC’s contention is that Goldman committed a crime – a “failure to disclose” – when they failed to tell the suckers about the role played by the vulture betting against them on the other side of the deal.
Even if he stands to make a buck at it, even your average used-car salesman won’t sell some working father a car with wobbly brakes, then buy life insurance policies on that customer and his kids. But this is done almost as a matter of routine in the financial services industry, where the attitude after the inevitable pileup would be that that family was dumb for getting into the car in the first place.
Now, the instruments in question in this deal – collateralised debt obligations and credit default swaps – fall into the category of derivatives, which are virtually unregulated in the US thanks in large part to the effort of gremlinish former Federal Reserve chairman Alan Greenspan, who as a young man was close to Rand and remained a staunch Randian his whole life.
People have to understand this Randian mindset is now ingrained in the American character. And it’s an important moment in the history of modern global capitalism: whether or not to move forward into a world of greed without limits.