At one level, we can reassure ourselves that Joe Stack, the pilot who crashed his small plane into the Austin IRS offices, was a whack-job who overreacted to a series of business and personal reversals, generalized these personal problems into "societal issues" (sort of the way bloggers do, come to think of it), and went over the edge.
Then you read Matt Taiibi's latest essay in Rolling Stone (reproduced by Zerohedge at this link,
http://www.zerohedge.com/article/taibbi-goldman-raped-taxpayer-and-raped-their-clients, and you're not so sure anymore. Taiibi likens Wall Street's record "bonuses" and banner profit years to the take of con artists, and details the different grifter techniques which Goldman Sachs, JP Morgan Chase, BofA, et al. have used to make boatloads of money in America's eviscerated economy. The essential point he makes is pretty simple, and it's the one that Eliot Spitzer and William Black have made elsewhere with greater legal precision: it is not a coincidence that these "Too Big to Fail" counting houses are about the only successful companies in America's shitty business environment. In effect, GS, JPMorgan and the rest have profited because they are the direct beneficiaries of most of the "money" the Federal Reserve has conjured out of thin air to "deal" with the financial crisis. This notional money (part of Quantitative Easing, or the money printing operation) has found its way into the hands of the Too Big to Fails. The enormous sums made available to the Big Banks, coupled with the super-low interest rates charged to the banks to borrow it, mean that GS & the Boyz can print money with almost the same alacrity as the Federal Reserve.
It is highly telling, as Taiibi points out, that outfits like Goldman and JPMorgan are making most of their money in "prop trading:" that is, proprietary trading or trading for their own account. They're not making money for "clients," as in the bygone days when there used to be "stock brokers." No, Goldman Sachs is now a freshly-chartered "bank holding company" (its membership application fast-tracked by its friends in Washington), and it exists to make money for itself. All of which is enabled and potentiated by Washington, because if GS Failed, well...well, we're never going to find out what would happen if it failed, because Obama assures us that the financial system has been brought back from "the Brink," and it's because of Washington's intervention in favor of Wall Street that we avoided another Great Depression, when even the greatest banks crashed. No, this time it's different: the American people have again been sacrificed, but the banks were saved with the dwindling resources of the federal government.
As Taiibi lucidly explains, the easiest, virtually guaranteed way to make a gigaton of money is by playing a simple spread game, borrowing cheap from the Federal Reserve through such windows as the Primary Dealer Lending Facility and buying something as basic as a 10-year Treasury yielding 3%, in effect recycling the money the Fed just gave you and forcing the Treasury to pay the vig. If the spread is 2%, and the amount borrowed (or raised by selling the Fed your crap portfolios of shitty mortgage-backed securities at par value when they might actually be worth 22% of that), is large enough (and we're talking about huge amounts), it is enough to make enough money to fund all those obscene bonuses. Add to this the infamous back-door bailouts paid through AIG by the New York Fed (facilitated by Tim Geithner) which added another $14 billion or so to Goldman's bottom line (on claims that were essentially worthless), and you start to wonder: when President Zero says that Lloyd Blankfein (of GS) and Jamie Dimon (of JPMorgan) are "savvy businessmen" and just like Alex Rodriguez or someone, is it that Obama is just kind of clueless or just kind of corrupt? I mean, how do you miss something like this? Who can't make money borrowing $1 billion at 1/2 percent and investing it in guaranteed returns of 3%? How would you not make $25 million? How savvy do you have to be? And why are we helping them do it? Don't they own enough islands in the Bahamas already?
These things take some time to understand, but they are not that arcane or abstruse. In an economic environment where the common man can derive virtually no yield from stock market investments, or money market or savings accounts, or from investments in housing, how is that the Fat Cats of Wall Street are making an absolute killing? Record profits? I mean, come on. This isn't savvy business; this is playing a rigged and corrupt game, a con, as Taiibi says. And the con is on the American people. These "banks" (or casino operators who play their own craps table with loaded dice) aren't lending to the American people. Commercial and residential lending is way down. Yes, it's true this is also because of a dearth of qualified borrowers, because the economy sucks. But then what is the point of making all this money available to the Too Big to Fails? Why are their prosperity, and their obscene profits, such a matter of import to the Obama Administration and the Democratic leadership of the Banking Committees, et al?
So Joe Stack blew his stack, finally, and voiced many resentments about all of these things, echoing many of the complaints one hears from Tea Party people, and from Americans in general. I couldn't follow Stack's argument, really, about his specific grievances concerning the tax code and certain amendments affecting his work as a software engineer. The Mainstream Media have been quick not to label him a terrorist because that's a term that is applied to Muslims with grievances against the United States, not to Americans with grievances against the United States. An American flying a plane into a building for "political" reasons is a nut; a Muslim doing so is an "enemy combatant." If the two major parties start calling all the Tea Party people "terrorists," their monopolistic hold on national politics might become more tenuous than it already is. So official hypocrisy will be maintained, even though Stack sounds more or less like the manifesto of every Tea Party rally I've read about, an amalgam of Left, Right, Libertarian, Aryan Nation, NASCAR, Toby Keith ideas all mooshed into an incoherent rant -- yet taken as a whole, as coherent as the Obama Administration's fawning admiration for Lloyd Blankfein and Jamie Dimon.
Yet the MSM must be careful not to treat Stack with kid gloves too soft for the occasion. They can't let him become a modern-day John Brown, because his resentments are really too pervasive. So he will be gradually isolated, personalized, differentiated, and "background checks" will reveal his fundamental instability, and the MSM may, in time, even reach for the Terrorist label to deal with him. It's a lot easier, and more profitable, than calling Lloyd Blankfein and Jamie Dimon con men.
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