Jun 1 2010

Admiring the Rich for Getting Richer

Goldman Sachs has no lack of defenders

LLoyd Blankfein of Goldman Sachs--Photo Credit: Flickr Creative Commons/World Economic Forum

LLoyd Blankfein of Goldman Sachs–Photo Credit: Flickr Creative Commons/World Economic Forum

“Beset by accusations of securities fraud, Goldman Sachs nevertheless showed Tuesday that it was still very good at what it does best: making money.” So began an April 20 New York Times online article.

By the time the story went to print, the lead had changed, to suggest that the fraud charges do, in fact, somewhat overshadow a strong quarterly earnings report. But the original lead seemed to more honestly reflect corporate media’s stance toward financial industry titans: a kind of awed admiration at the way they make bank, even when “beset.”

NPR’s Morning Edition (4/20/10) host Steve Inskeep likewise began his report:

Goldman Sachs Group announced this morning that its first quarter earnings nearly doubled to more than $3 billion, which exceeds expectations. That was a bit of good news, a very large bit of good news, because four days ago the Securities and Exchange Commission sued Goldman Sachs for fraud.

Goldman is accused by the SEC of creating complex mortgage securities they expected would become toxic, reaping billions at clients’ expense and contributing to the disastrous housing bubble. But anyone familiar with corporate media knew there was little danger the company would go undefended in the press. Not everyone went so far as to compare proceedings against them to “a Stalinist show trial,” as Newsweek’s Evan Thomas did on Charlie Rose (4/27/10):

THOMAS: Well, they pour these guys up and wag their finger at them. And it’s so weird to have the situation where the deck is stacked against Goldman. Goldman is usually the outfit stacking the deck against everybody else.

ROSE: Because of their competence.

THOMAS: Well, they’re a giant amoeba that absorbs information. They’re smart and they outsmart everybody. Now they’re in this very uncomfortable, foreign position of being—I hate to use the word “victim.” But they’re a device, they’re a tool that’s being used to make a larger point—

ROSE: About Wall Street?

THOMAS: About Wall Street, and about insiders and about how all this is. And they may not be a giant sucking squid, but they’re made to look pretty evil.

In a column published in the Washington Post (4/26/10) and in the Post-owned Newsweek (5/3/10), Thomas’ colleague Fareed Zakaria likewise suggested that, rather than, say, thinking about the real people hurt by Goldman’s gamesmanship, we should instead consider our own blame for the situation. The rage at Goldman, Zakaria pontificates,

can cloud our perspective and distort public policy. We’re going through a familiar part of America’s boom-and-bust cycle. Having been mesmerized during the go-go years, having unduly lionized and feted industries, firms and people as they rode the wave, we now want to throw these people to the wolves.

In reality, “we” didn’t “lionize” or “fete” anyone, though Zakaria’s corporate media colleagues certainly did. Talk about a clouded, and narrow, perspective.



The Freeloading Poor

“Tax Day is a dreaded deadline for millions,” began an April 5 AP story by Stephen Ohlemacher, “but for nearly half of U.S. households, it’s simply somebody else’s problem. About 47 percent will pay no federal income taxes at all for 2009.” The Drudge Report and Fox News surprised no one by flagging the AP piece and its central datum (credited to the Tax Policy Center) that the “top 10 percent of earners—households making an average of $366,400 in 2006—paid about 73 percent of the income taxes collected by the federal government.”

On Fox News’ Hannity (4/9/10), the host expanded the claim’s scope and bumped up the numbers, asserting that “50 percent of American households no longer pay taxes,” and wondered, “What does that mean for America if you have a voting electorate that’s not paying any taxes?” (He raised the specter of “people…saying, all right, healthcare, where do I sign up for my free Obama healthcare?”)

But the Tax Policy Center’s figure isn’t referring to all taxes, just federal income taxes. When you include federal payroll taxes—which are actually regressive, hitting the working class much harder than the wealthy—and investment taxes, the Congressional Budget Office calculates that only about 10 percent of households qualify for enough credits to wipe out their federal tax liability. And that’s not counting state and local taxes, either. But those inclined to think of people too poor to owe income tax as “robbers” may be unlikely to seek out countervailing views.

Nor can their “everyone should pay taxes” line be expected to extend to, well, everyone. Huge numbers of corporations pay zero income tax: A 2008 Government Accountability Office study estimated that “about 57 percent of U.S. companies doing business in the U.S. paid no federal income taxes for at least one year between 1998 and 2005” (Reuters, 8/12/08). But this doesn’t seem to provoke the same degree of media interest or outrage.