Wednesday, June 8, 2011

Sorkin vs. Taibbi

If you've read me for a while, you'll know that I'm a big Matt Taibbi fan. I've excerpted his work at Rolling Stone here several times before, and I could've done so on multiple other occasions. He's crass, highly opinionated, and occasionally unfair--part of that can probably be attributed to the publication he writes for--but as a journalist he's absolutely top notch. He pulls no punches, is unafraid to take on big targets, and sets a new standard for research with his tireless due diligence on his articles.

I've got more complex feelings on the New York Times' Andrew Ross Sorkin (editor of Dealbook). I think he's also a terrific journalist, with incredible connections throughout the financial and business world. I've only read excerpts of Too Big to Fail--and haven't seen the HBO special that it inspired--but I enjoyed what I read and was left with an impression that it was well-researched and mostly fair. That said, Sorkin has a tendency to be a bit inconsistent in his analysis, at times seeming to play favorites in his coverage. It's that tendency that has now led to a showdown between him and Taibbi, which I think is fascinating to watch (and read).

On the topic of Goldman Sachs--Taibbi's biggest, most frequent, and clearly favorite target--Sorkin issued the first salvo with a passionate defense of CEO Lloyd Blankfein (he of the "we're doing God's work" decree).
The vampire squid haters won’t like this column.
For the past several weeks, I have been trying to understand if Lloyd C. Blankfein, Goldman Sachs’s chief executive, could have perjured himself — as Senator Carl Levin has suggested — when he testified last year in front of the Senate’s Permanent Subcommittee on Investigations and declared, “We didn’t have a massive short against the housing market.”
Based on the subcommittee’s report, which was referred to the Justice Department, I wrote a column raising questions about Mr. Blankfein’s comments. At the time, his testimony seemed ridiculous in the face of evidence that Mr. Levin presented, which showed that the firm had regularly made large bets against the subprime market.
But upon further reporting — talking with executives at Goldman, who pointed me to other documents, and with officials in Washington, and then poring through the report, following the footnotes to the original sources and then cross-referencing them against other public records — I have come to a different and perhaps unsatisfying conclusion for those readers looking for a big scalp: Mr. Blankfein wasn’t lying.
The "vampire squid" reference that Sorkin opened his piece with was a direct reference to Taibbi's most famous Goldman Sachs article, and it was probably an ill-advised bit of baiting by Sorkin. Not surprisingly, Taibbi punched back with serious force, tearing apart the foundation of Sorkin's defense of Blankfein.
I've been trying not to say anything bad about Andrew Ross Sorkin. I even made a point of not watching Too Big To Fail so as not to get upset -- and when I heard from friends that the film turned [former Goldman Sachs CEO and Treasury Secretary] Hank Paulson into Joan of Arc, that decision seemed to have been validated.
Now I’m bummed to see that Sorkin has written an elaborate defense of Goldman in the New York Times "Dealbook" section, arguing among other things that Lloyd Blankfein probably did not commit perjury and that the bank did not have a huge directional bet against mortgages in 2007. As evidence, Sorkin cites unsubstantiated Goldman documents and Goldman sources who claim, among other things, that the bank had $5 billion worth of long bets on MBS "in other parts of the company," offsetting the now-notorious "Big Short."
The Sorkin piece reads like it was written by the bank's marketing department, which may not be an accident. In November of last year, the New York Times announced that "Dealbook" was entering into a sponsorship agreement with a variety of companies, including ... Goldman, Sachs.
Yikes. Taibbi's intimation that Sorkin's defense was corporate-led was probably not a particularly careful accusation, and it may end up getting him in a little bit of trouble with the Times' lawyers, but I also don't think it's an irrelevant link.

The fact is, Goldman Sachs is well known for its heavy lobbying efforts in Washington, efforts that have led to a virtual revolving door between Washington and the Goldman executive suite (Hank Paulson being only the most obvious example). Given that dynamic, it's not at all unreasonable to wonder whether they would use similar tactics to exert their influence in the media world, and to therefore question Sorkin and the Times' motivations. Given the factual errors/misrepresentations that Taibbi cites later in his piece, it's pretty tough to come away from the Taibbi-Sorkin back-and-forth without at least feeling a little queasy about the Goldman-Times business partnership.

Graphic courtesy of McClatchy
I should mention here that I am an unabashed Goldman hater, and my leanings thus put me squarely in the Taibbi camp in this debate. While I have many close friends who either work or worked for Goldman, my experiences with the firm's behavior on the American Stock Exchange trading floor (via the "independent" brokers they retained) soured my opinion of them and their tactics, and the events of the past 3-4 years have only steeled my nauseous response to the Goldman name. Their duplicitous nature, their constant bullying, and their incessant insistence that they are vital to the world's existence and survival have turned me off for good, and the revelations of illegal (or at least unethical) behavior within the firm don't surprise me at all.

Regardless of your feelings, though, I find the showdown between two of the financial world's best journalists to be fascinating on multiple levels. It's the establishment paper (Times) versus the alternative-culture icon (Rolling Stone), the product of the Ivory Tower (Sorkin) against the working-class hero (Taibbi), et cetera, ad nauseum. And the fact that the target of so many people's ire (Goldman) finds itself caught in the middle only adds to the intrigue. Good stuff.

[NY Times]
[Rolling Stone]

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