The 14 3/4 Biggest Ideas of the Year July/August 2010

Bonfire of the Knuckleheads

In Chinatown, when the scrupulously noirish but secretly idealistic Jake Gittes asks Noah Cross, the megalomaniacal water czar, to explain his wicked pursuit of infinite wealth, he frames the question this way: “Why are you doing it? How much better can you eat? What could you buy that you can’t already afford?”

These are questions that come to mind when the subject of Goldman Sachs arises. Here is a Goldman answer to the second question: At Megu, the luxe sushi restaurant in Tribeca that is five minutes away by Porsche 911 from Goldman headquarters, dinner can easily exceed $200 a person. Goldman’s profits in the first quarter of this year came to $3.5 billion. That could buy 159 million servings of Megu’s yellowtail carpaccio. It’s a lot to eat, but appetites at Goldman are boundless and it is doubtful that self-awareness will curb them more than temporarily. It also seems doubtful that the Securities and Exchange Commission, which may investigate whether Goldman bet against its own clients in the subprime-mortgage meltdown, will staple Goldman’s stomach in more than a semipermanent fashion. And President Obama’s financial-reform package is a half measure, one that will allow punishment on the margins, but one that also accepts as ineluctable fact the idea that the system extolled, refined, and gamed by Goldman Sachs and the banks that have yearned to be Goldman, is the best system we can have. This is the system that produced the Goldman executive “Fabulous” Fabrice Tourre, who wrote the most emblematic e mail of the financial crisis:

More and more leverage in the system, The whole building is about to collapse anytime now . . . Only potential survivor, the fabulous Fab . . . standing in the middle of these complex, highly leveraged, exotic trades he created without necessarily understanding all of the implications of those monstruosities!!!

This is not to say that nothing has shifted in the way we understand Goldman. The firm once supplied the federal government with dollar-a-year men, the titans of finance who, as a favor to world capitalism, went to Washington. Now, though, after the disastrous appearance of Goldman CEO Lloyd Blankfein and various Goldman dwarves—including and especially the not-so-fabulous Tourre—before a Senate committee in late April, it seems likely that Goldman’s name on a résumé will be seen, at least temporarily, as a black mark. Not so long ago, the leaders of Goldman Sachs were seen as greedy but brilliant. Today, they are seen as greedy and quite possibly incompetent. Goldman will survive; Blankfein will stay rich, and the system that produced such “monstruosities” as Tourre will remain, in most ways, the same. But the story line has changed: Bonfire of the Vanities, meet Bonfire of the Knuckleheads.


14 3/4. Reefer Sanity
by Joshua Green
7. Information Wants to Be Paid For
by Walter Isaacson
14. It’s Too Easy Being Green
by Kai Ryssdal
6. The Kids Aren’t All Right
by David Leonhardt
13. Teachers Are Fair Game
by David Brooks
5. Bonfire of the Knuckleheads
by Jeffrey Goldberg
12. The Rise of the Drones
by Martha Raddatz
4. The Power of No
by Michael Kinsley
11. Obama Is No Liberal
by James Bennet
3. Boredom is Extinct
by Walter Kirn
10. The Triumph of Free Speech
by Jeffrey Rosen
America Is No. 2
by James Fallows
9. The Catholic Church Is Finished
by Ross Douthat
1. The End of Men
by Hanna Rosin
8. Deficits Matter
by Megan McArdle
PLUS: More Ideas of the Year
From TARP to sleeping with Tiger Woods
Presented by

Jeffrey Goldberg is a national correspondent for The Atlantic. More

Before joining The Atlantic in 2007, Goldberg was a Middle East correspondent, and the Washington correspondent, for The New Yorker. He was previouslly a correspondent for The New York Times Magazine and New York magazine. He has also written for the Jewish Daily Forward and was a columnist for The Jerusalem Post.

Goldberg's book Prisoners was hailed as one of the best books of 2006 by the Los Angeles Times, The New York Times, The Washington Post, Slate, The Progressive, Washingtonian magazine, and Playboy. He received the 2003 National Magazine Award for Reporting for his coverage of Islamic terrorism and the 2005 Anti-Defamation League Daniel Pearl Prize. He is also the winner of the International Consortium of Investigative Journalists prize for best international investigative journalist; the Overseas Press Club award for best human-rights reporting; and the Abraham Cahan Prize in Journalism.

In 2001, Goldberg was appointed the Syrkin Fellow in Letters of the Jerusalem Foundation, and in 2002 he became a public-policy scholar at the Woodrow Wilson International Center for Scholars in Washington, D.C.

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