John Kenneth Galbraith, "In Goldman, Sachs We Trust" (1954) from John Kenneth Galbraith: The Affluent Society and Other Writings 1952–1967:
When I was studying Nathanael West and the breakdowns of the 1930, I remember one scholarly book argued that jigsaw puzzles saw a big rise in popularity in the 1930s because it was very difficult to put together a view of what was really going on in the world. That is, the jigsaw puzzle took what everyone was experiencing (confusion over how the world fit together now, especially the financial world) and allowed people the pleasure of solving the picture. This professor connected the financial jigsaw puzzle to the first chapter of The Grapes of Wrath, with the soon-to-be dispossessed farmer wondering who he should shoot to solve his problem and the sympathetic bulldozer operator noting that you can't really shoot anyone to solve this problem because no one person is in control of the system.
That's the feeling I get reading Galbraith's "In Goldman, Sachs We Trust," part of a chapter from his book on the stock market crash of 1929. Galbraith draws the lines--with many numbers--of how Goldman, Sachs came to dominate the market with its investment trust.
But, although the headnote says this piece is very clear and although we could be said to have lived through a very similar crash recently (with overleveraged investment firm), I still found this version of the story a little hard to follow. Maybe when we're dealing with these many numbers, I want some of those Ezra Klein-style charts and graphs. Or maybe this is one of those situations where people seem to be doing something so cockamamie that it's hard to grasp after the fact. Or maybe I just didn't read it carefully enough while I was at the gym today (busted!).
Galbraith does make his explanation a little easier to follow--but maybe a little harder to prosecute--by personifying Goldman, Sachs: Goldman, Sachs comes to understand something, and Goldman, Sachs uses some new financial tool, and Goldman, Sachs buys and sells. Who does this? Are there people behind these bad decisions? In Galbraith's account, not really. So who do we shoot to change the system?