Saturday, February 26, 2011

Joe Weisenthal as a Pinball Wizard

Joe Weisenthal comments on my post Is Goldman Sachs Providing Pitchforks to the Democrats?  Specifically, Weisenthal writes:
Robert Wenzel goes further, saying that the[Goldman] report may have been deliberately timed to help the Democrats in the current budget battle, and that Goldman was "providing pitchforks" for the Democrats.

But sorry, ff [sic] you think there's pro-Democratic propaganda in the paragraphs above, you've got better eyes than we do. It specifically says that by the end of the year, the spending cuts would have a negligible effect, though it goes onto say that a government shutdown would have a more serious impact on growth.
Uh, let's get Weisenthal some eyeglasses. He may think his eyes are fine, but last I looked Chuck Schumer was a Democratic Senator, from Weisenthal's home state to top it off. I quoted him in my post this way: FT story...quotes New York Democratic Senator Chuck Schumer:
Chuck Schumer, the Democratic senator from New York, said: “This nonpartisan study proves that the House Republicans’ proposal is a recipe for a double-dip recession. Just as the economy is beginning to pick up a little steam, the Republican budget would snuff out any chance of recovery. This analysis puts a dagger through the heart of their ‘cut-and-grow’ fantasy”.
Weisenthal may not see that Schumer is using the Goldman report as a propaganda piece, but maybe only because Schumer is using it as a sledge hammer. Go ahead, re-read it again. Is Schumer using the report in a mild mannered fashion?

Further, a bit of political nuance may have not caught Weisenthal's ear (Bad eyes and bad ears, maybe Weisenthal is a pinball wizard.)when I pointed out that the Schumer quote meant Schumer was taking a role. The implication was that Schumer would be much more effective than Senate majority leader Reid at stopping the budget bill.

It's not the quality of the report, or who else may be putting out such a report, it's the fact that this report found its way into my hands, Schumer's, FT's and ABC News.

That doesn't happen by accident.

Weisenthal is correct that there are many reports out saying all kinds of things about the economy, but the Goldman one is the one that found its way into news accounts and that Schumer is using to declare that the budget cuts would mean another dip in the economy. Indeed, my source told me that it didn't even matter what the full report said, or how it might have qualified things. He correctly said that most reading Schumer's reaction, would see the Schumer quote and never come close  to seeing the full report. The juicy quote was what Schumer needed, and that's what the report had in it (or from which Schumer could at least extrapolate a warning of a double dip).

Weisenthal just doesn't get how cynically politicians and Goldman's top players view the average schmuck on the street. Remember, we went to war against Iraq to fight terrorists and dismantle weapons of mass destruction, neither of which had anything to do with Iraq. Schumer doesn't care about the report beyond the sound bite he can pull out of it.

But, then again, Weisenthal may be right. It might all be coincidence that it was a Goldman report. Schumer, after carefully reading a few dozen reports from the likes of Merill Lynch, Morgan Stanley, JPMorgan Chase ans UBS, into the wee hours of the night, may have decided that Goldman's double dip warning made the most sense on its merits out of all the reports. Schumer may have drawn his own IS-LM curves, aggregate demand curves, running some regression analysis on Senate computers and  re-reading Chapter 10, The Marginal Propensity to Consume and the Multiplier, in Keynes' book The General Theory, and then, only then, Schumer decided to use the Goldman report. Yeah, that's how I think it happened. Weisenthal is right, everything else was just coincidence. There's no propaganda in the Goldman report, after all FT also reported that Lloyd Blankfein considers what he is doing as "God's work." I'll have to keep that in mind the next time a 30-year Capitol Hill veteran calls to give me his thinking on how D.C. machinations go. There really aren't any, D.C. is a very moral up-standing place, perhaps only superseded by Goldman Sachs.

1 comment:

  1. I'd like to see Goldman's work product.