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Issues of financial reform and regulation can be intimidating to laymen (this layman anyway) because of its insanely complex nature. It is easy to imagine the system as a big Jenga tower, and moving one piece might cause the whole thing to come crashing down. No one wants to be seen as inadvertently - but earnestly! - advocating for a ruinous policy. Of course, that means the opposite extreme is then in play: Turning into Hamlet and endlessly agonizing over what to do at the expense of actually doing something. Not to mention the fact that, not to put too fine a point on it, wide swaths of our leadership has for years now been deliberately advocating ruinous policies both at home and abroad. That should certainly make those of us in the unwashed masses comfortable with forcefully advocating what seems reasonable based on available data. It's not as though we could screw it up any worse.

Still, it would be nice to have a rule of thumb, compass point or guiding principle to go by. Having been a reasonably close observer of the meltdown and its aftermath, here is one I have come up with: It is necessary (but not sufficient) that any proposal be strenuously opposed by Goldman Sachs (GS). In a largely protected industry Goldman appears to be the closest thing to untouchable as we have. It is in Matt Taibbi's already-legendary description "a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money." It has installed a revolving door between the highest levels of the government and its board room, enjoys privileged lines of communication with the Treasury secretary exceeding even that of our closest allies, was happily positioned as a key competitor died, then days later benefited as a key debtor was drenched in cash (Yves Smith called it a "massive backdoor subsidy to the likes of Goldman"), and as it happens was the second largest contributor to the president in the 2008 election cycle. More so than any other player in financial services, GS always seems to be nearby when bad things happen.

Matt Taibbi has this lovely Goldman Sachs lobbying document. Here's a smidge:

The equity markets provide perhaps the best example of a highly evolved complex ecosystem, where care must be taken to preserve the benefits that have evolved from competition and innovation...

BWA-HA-HA-HA-HA-HA-HA-HA-HA!

Based on Matt Taibbi's post (Thanks BDBlue!), I thought it would be good to bring up some history. You know, there was at one time this thing people would do, called "protest", and occasionally it had results (however meager and fleeting they might be). But results nonetheless:

Matt Taibbi:

This is what Barack Obama did to “earn” the Nobel Prize. He put the benevolent face back on things. He is a good-looking black law professor with an obvious bent for dialogue and discussion and inclusion. That he hasn’t actually reversed any of Bush’s more notorious policies — hasn’t closed Guantanamo Bay, hasn’t ended secret detentions, hasn’t amped down Iraq or Afghanistan — is another matter. What he has done is remove the stink of unilateralism from those policies.

They’re not crazy-ass, blatantly illegal, lunatic rampages anymore, but carefully-considered, collectively-run peacekeeping actions, prosecuted with meaningful input from our allies.

Via Glenn Greenwald, Matt Taibbi explains Obama's Nobel Peace Prize by providing some very insightful commentary about who is - and isn't - eligible for Nobel Peace Prizes and why:

Oh, wait. I'm sorry, that's Matt Taibbi on Tom Daschle; it's so easy to get FKDP operatives confused. Anyhow, read The Nation on Gephardt, and I'm sure you'll agree.

During the primaries, many lamented how self-identified "progressives" were willing to use false charges of racism, misogyny, and every tool that the right developed in the 1990s to smear both Clintons (along with some new and special smears of their own), to elect a candidate they deemed "progressive," much like themselves. But that's all blood under the bridge, right? I've gotten over it. And personally, I never liked the "progressive" label much anyhow, because I didn't see that the word had an answer to the question "Progress in what direction?"* Now, of course, we're getting better answers.

It never occurred to me that there might be a problem with "progressivism" in itself. But now Robert Johnson of New Deal 2.0 raises the issue. Now that we're in the midst of The Big Fail, is progressivism a FAIL, too? Johnson takes off from Taibbi's article, and puts it in context:

In Matt Taibbi’s vivid and provocative new article in Rolling Stone, “The Great American Bubble Machine,” the man absolutely screams.

Taibbi’s rage is filling an emotional void. It is a reaction to what is missing after this profound speculative episode that the IMF suggests will cost over $4 trillion in losses on balance sheets and untold trillions in lost output. It is fury over a crisis that is, by any measure, the most profoundly damaging episode since the 1930s (and the Bank for International Settlements Annual Report released this week strongly suggests that the burden on stockholders is far from over)....

There is an age-old tension that emerges in situations like this. You can feel it yourself. We know things are not right but do not exactly know why. Finance is complex. Since the progressive era, trust in “experts” has often been suggested as the best way for society to handle such complex phenomena. We are encouraged to delegate to the likes of leading academics, the Federal Reserve, the Treasury Secretary, and financiers themselves to keep an eye on the public interest. Public officials are explicitly employed to undertake this task on behalf of society. Those in the private sector often appeal to experts, encouraging public. deference to their superior knowledge. Experts are thought to be the custodians of the nation’s health. ...

The problem now is that the experts and leaders from finance [and not only finance] have failed us miserably. They have let us down and we know it. We do not trust in the system. [That is the problem, not confidence.] No one thinks the Federal Reserve did a bang-up job in the years preceding this crisis. The failure is much more profound in the private sector, yet for the most part that failure goes unacknowledged. Even with losses and bailouts, we have to fight over bonus payments to those who feel entitled, despite the cost they have imposed on their stockholders and, more importantly, society.

... despite what anyone says, and I'm totally confident that Obama's vetting process will continue to produce public servants of the most awsum and unimpeachablest integritude, despite blips like chief speechwriter Jon Favreau, Commerce Secretary-designate Bill Richardson, and Treasury Secretary Tim Geithner, but doesn't this pose the appearance of conflict?

[Daschle's] finances [include] more than $300,000 in income from health-related companies that he might regulate as secretary....

And, even though a substantial proportion of that $300,000 must come from the insurance parasites that single payer would remove from the health care system, it's impossible for me to imagine that this would influence Daschle's views of what's "politically feasible [rhymes with weasel] and what isn't.