Lifting Rocks on the Economic Meltdown

Lloyd Blankfein, Goldman Sachs CEO, and Gary Cohn, president attend Obama's speech about financial reform at Cooper Union on Thursday.

Ask a conservative what caused the economy to collapse and they'll blame poor folks suckering innocent, well-meaning banks into selling them mortgages they couldn't afford. Conservatives posit bankers as victims and America's working/middle classes as villains. Why? Because conservatives are deluded a**holes with nothing but contempt for regular Americans.

Ask a liberal what caused the collapse and they'll blame Wall Street. We're clueless when it comes to exactly why and we have no real idea what Wall Streeters do at work between $500 lunches... but we do know smart rich people make billions ripping off slightly less smart rich people. And they get away with it because no-one really understands how.

But as the Goldman Sachs story unfolds, the murk in the shark tank starts to get a little clearer. As the NYT says:

In late 2007, as the mortgage crisis gained momentum and many banks were suffering losses, Goldman Sachs executives traded e-mail messages saying that they would make “some serious money” betting against the housing markets.

The messages, released Saturday by the Senate Permanent Subcommittee on Investigations, appear to contradict statements by Goldman that left the impression that the firm lost money on mortgage-related investments.

Put simply, Goldman Sachs bought sh*t mortgages, sold them as golden investment opportunities then claimed huge losses when they went bust. But now we know those sh*t mortgages were generously insured. So instead of losing billions, they made billions from bad investments and helped push the economy down the toilet.

Put even simpler: Goldman Sachs bought fire insurance on burning houses. And they made out like bandits while the whole town caught fire. Spin that, conservative apologists for the corporate kleptocracy.