|I had no idea, but there actually is such a thing as a vampire squid, Vampiroteuthis infernalis. Not because it sucks blood, it doesn't, but because of its red eyes and the webbing on its tentacles, making it look as if it were wearing an opera cape. Threatened by predators, it "inverts its caped arms back over the body, presenting an ostensibly larger form covered in fearsome-looking though harmless spines" in what is known as a "pineapple" or "pumpkin" posture. So it's actually kind of cute! Image via Wikipedia.|
Or Silvio Berlusconi, the Italian Donald Trump, who still wields real power in Italy as a news magnate and opposition politician. Speaking of that third Chelsea Manning dump of 250,000 diplomatic cables in late 2010, she told an audience of Goldman Sachs "builders and innovators" three years later,
So out come hundreds of thousands of documents. And I have to go on an apology tour. And I had a jacket made like a rock star tour. The Clinton Apology Tour. I had to go and apologize to anybody who was in any way characterized in any of the cables in any way that might be considered less than flattering. And it was painful. Leaders who shall remain nameless, who were characterized as vain, egotistical, power hungry...corrupt. And we knew they were. This was not fiction. And I had to go and say, you know, our ambassadors, they get carried away, they want to all be literary people. They go off on tangents. What can I say. I had grown men cry. I mean, literally. I am a friend of America, and you say these things about me.
MR. BLANKFEIN: That's an Italian accent.... And so you said, "Silvio..."
(Laughter.)That's the amusing part. But it's worth a thought, there, that maybe she doesn't want to start off her presidential term with another apology tour.
Obviously I've been spending some time looking at my $675,000 worth of Goldman Sachs speeches posted by WikiLeaks yesterday, and the first thing is that they're totally different from what I've been led to expect over the past year (20-minute prepared text of anodyne cliché, with a pandering nod to the audience inserted into the peroration).
Starting with the fact that they're not speeches at all, but very wide-ranging and somewhat unbuttoned conversations, two of these with Goldman CEO Lloyd Blankfein (a known Democrat and Hillary supporter, though his employees give far more money to Republicans). And they're not about the banking industry (something you'd never find out from looking at the Amy Chozick and Nicholas Confessore story in the Times), but mostly about foreign policy, debriefings from her term as secretary of state, at a fairly sophisticated level, on how she saw the world in 2013.
She only goes into the banking industry once, in fact—in the second speech, in response to a direct question from Tim O'Neill (global co-head of Goldman's investment management division), who was the interlocutor in that one:
Since 2008, there's been an awful lot of seismic activity around Wall Street and the big banks and regulators and politicians. Now, without going over how we got to where we are right now, what would be your advice to the Wall Street community and the big banks as to the way forward...?Her answer isn't what you'd call Elizabeth Warren fierce, but it isn't the five soundbites supporting the banksters against the people that it has been cherry-picked into in the Tony Carrk document that seems to have served as the campaign's internal justification for refusing to let the transcripts out.
She starts off by praising them for conduct during her time as Senator that has nothing to do with the banking industry, *Clinton Said “I Represented All Of You For Eight Years. I Had Great Relations And Worked So Close Together After 9/11 To Rebuild Downtown.” *, leading to a very big but:
I had great relations and worked so close together after 9/11 to rebuild downtown, and a lot of respect for the work you do and the people who do it, but I do -- I think that when we talk about the regulators and the politicians, the economic consequences of bad decisions back in '08, you know, were devastating, and they had repercussions throughout the world.And goes on to say how she had to face those repercussions as secretary of state:
That was one of the reasons that I started traveling in February of '09, so people could, you know, literally yell at me for the United States and our banking system causing this everywhere. Now, that's an oversimplification we know, but it was the conventional wisdom.Well, it is an oversimplification if it leaves out the roles of hedge funds, credit rating agencies and accounting firms, sleepy government regulators, and the misbehavior of poorly regulated banking interests in Europe blowing up the US bubble even as watchful eyes were all trained on China (as the not very Marxist Economist summed it up around the time of the speech). American bankers really didn't do it all by themselves. The specific oversimplification she has in mind here is that the people yelling at her, in London and Frankfurt and Tokyo, were among the responsible parties, and she was absolutely right about that.
What she's advising Wall Street to do is to welcome reregulation toward industry transparency—
there's a lot that could have been avoided in terms of both misunderstanding and really politicizing what happened with greater transparency, with greater openness on all sides, you know, what happened, how did it happen, how do we prevent it from happening? You guys help us figure it out and let's make sure that we do it right this time.Yes, she does say they "know best", or *Speaking About Financial Regulations, Clinton Said “The People That Know The Industry Better Than Anybody Are The People Who Work In The Industry.” *—
There's nothing magic about regulations, too much is bad, too little is bad. How do you get to the golden key, how do we figure out what works? And the people that know the industry better than anybody are the people who work in the industry.But that's because they created the problem, by making the system so opaque that nobody can understand it, down to fucking Alan Greenspan:
You know, I remember having a long conversation with Warren Buffett, who is obviously a friend of mine, but I think he's the greatest investor of our modern era, and he said, you know, I would go and I'd talk to my friends and I'd ask them to explain to me what a default credit swap was, and by the time they got into their fifth minute, I had no idea what they were talking about. And when they got into their tenth minute, I realized they didn't have any idea what they were talking about. I mean, Alan Greenspan said, I didn't understand at all what they were trading. So I think it's in everybody's interest to get back to a better transparent model.And it's false to say *Clinton Said, With Dodd-Frank, There Was “A Need To Do Something Because For Political Reasons” Because Members Of Congress “Can't Sit Idly By And Do Nothing.” *
What she said was that it had to be done, and that it had to be done maybe more quickly and with less banker input than was entirely desirable because it was also political:
there was a lot of complaining about Dodd-Frank, but there was also a need to do something because for political reasons, if you were an elected member of Congress and people in your constituency were losing jobs and shutting businesses and everybody in the press is saying it's all the fault of Wall Street, you can't sit idly by and do nothing, but what you do is really important.But she's not saying the system is now over-regulated: it's not fixed, and it clearly needs more:
I know that banks and others were worried about continued liability and other problems down the road, so it would be better if we could have had a more open exchange about what we needed to do to fix what had broken and then try to make sure it didn't happen again, but we will keep working on it.She's not threatening or scolding them, or attempting in any way to give them a sad, but she's warning them, in 2013, that the reregulating process will continue, and if they want to have an influence on it then fighting it isn't the way to go; they need to cooperate, in the most open way possible.
Then again, there really is the other question of why she was even talking to these people, why she was taking their money, whether she was unaware, four years in, of the sheer criminality of what they'd done ("its serious misconduct in falsely assuring investors that securities it sold were backed by sound mortgages, when it knew that they were full of mortgages that were likely to fail", said acting associate attorney general Stuart Delery), for which the firm paid a $5 billion fine in April, which seemed to many like an inadequate punishment. Do she and Blankfein both see the fraud as a "bad apples" phenomenon that he wasn't, himself, strictly speaking, involved in or in a position, from his stratospheric altitude, to control? I know Clintons and Goldman Sachs go back a long way together, at least since Robert Rubin was secretary of the Treasury, and maybe they literally can't imagine any ill of each other. I think if I could ask her one reporter question it might be that, to explain what her state of mind on this was, in 2013, and whether she understands it differently now.
The bulk of the three speeches, as I say, is foreign and security policy, and there's an awful lot of material there, some of it reassuring, some of it kind of disquieting, which I'll probably talk about in a later post or two, but I'd like to just post this bit first.