Wednesday, December 9, 2009

School Lunch FAIL

1 statements

I eat fast food, and I know it's pure crap. But thank the fucking lord that I never ate public school food - my mom always packed me a lunch.

Government schools have crappier food than the crap they serve at Taco Bell, and even KFC! Yes, KFC! Remind me why, again, do most people consider it a bad thing when public education funding is cut or public schools are shut down?

From USA Today:

USA TODAY examined about 150,000 tests on beef purchased by the AMS for the school lunch program. The agency buys more than 100 million pounds of beef a year for schools, and the vast majority of it would satisfy the standards of most commercial buyers. But USA TODAY also found cases in which the agency bought meat that retailers and fast-food chains would have rejected.

Like the AMS, many big commercial buyers reject meat that tests positive for salmonella or E. coli O157:H7. But many fast-food chains and premium retailers set tougher limits than the AMS on so-called indicator bacteria. Although not necessarily dangerous themselves, high levels of the bacteria can suggest an increased likelihood that meat may have pathogens that tests might miss.

From 2005 to this year, the AMS purchased six orders of ground beef that exceeded the limits some commercial buyers set for indicator bacteria. The meat came from five companies: Beef Packers of Fresno, which filled two of the orders; Skylark Meats of Omaha; Duerson Foods of Pleasant Prairie, Wis.; N'Genuity Enterprises of Scottsdale, Ariz.; and Palo Duro Meat Processing of Amarillo, Texas.

Palo Duro is the largest provider of ground beef to schools. Beef Packers is one of the most troubled; it has been suspended as an AMS supplier three times, and Rep. Rosa DeLauro, D-Conn., called this week for the plant to be closed temporarily in the wake of two recalls.

From late November 2008 through January this year, the AMS bought nearly 500,000 pounds of ground beef from Beef Packers and Skylark with unusually high levels of an indicator bacteria known as "generic E. coli." The organism is considered an indicator of whether potential contaminants from the intestines of cattle have gotten into slaughtered meat — a source of the far more dangerous E. coli O157:H7.

The indicator bacteria are measured in CFUs, or colony-forming units. Jack in the Box, which pioneered many of the safety standards now used across the fast-food industry, won't accept beef with generic E. coli levels of more than 100 CFUs per gram. The AMS, on the other hand, will buy beef for the school lunch program with generic E. coli counts of up to 1,000 CFUs per gram — 10 times the Jack in the Box limit.

"That's a significant difference," says Marsden, the professor and beef industry adviser.

The shipments of beef that the AMS bought a year ago had generic E. coli levels up to four times higher than what Jack in the Box would accept. "Most higher-end companies certainly would reject that," Marsden says. Those bacteria levels "would be a yellow light (that) something's not right."

E. coli isn't the only indicator bacteria that the AMS allows at higher levels. The government also accepts beef with more than double the limit set by many fast-food chains for total coliform, which is used to assess whether a beef producer is minimizing fecal contamination in its meat.

"We look at those (measures) to gauge how a supplier is doing," says David Theno, who developed the safety program at Jack in the Box before retiring last year. If shipments regularly exceed the company's limits on indicator bacteria, "we'd stop doing business with them," he says.

Tuesday, December 1, 2009

Tuesday, November 24, 2009

Fighting Terrorism in Berkeley

2 statements

I'm so glad to finally see those terrorist Berkeley students getting the shit kicked out of them by our glorious peace officers. That'll learn 'em to go to a liberal college and get edumacated! MERIKUH!

Thursday, November 12, 2009

Dumb Cops, Dumb Laws, Unnecessary Victims

1 statements

First story: A woman asks LAPD for protection from her angry ex-lover. They escort her to her residence and wait outside. She gets stabbed multiple times in her residence. Cops hear her screams, burst inside and shoot the angry ex-lover to death, but it still wasn't fast enough to save her. Even when the cops are literally seconds away, it is still not enough. Instead of asking the cops for help, she should have taken matters into her own hands, bought a gun, and helped herself. She may still be alive today if she had a gun in her hand instead of having armed retards sitting outside her front door.

Second story: A UK military veteran discovers a shotgun discarded in his garden. Believing he is doing the responsible thing, he personally turns it in to the local police department. Result? He got arrested and convicted of illegal gun possession, and is facing 5 years of jailtime. Prosecutors acknowledge that he had no ill intent, but they insist intent is not relevant to the law. That's right, the UK has laws that, in practice (though not through intent - ha ha), discourage people from turning in found guns.

These two stories teach the same two lessons. First lesson: Never, ever, trust a cop, and by extension, any government employee. Second lesson: If you don't own a gun, buy one, and if you find a gun, keep it (and keep your mouth shut about it).

Thursday, November 5, 2009

Happy Guy Fawkes Day

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Remember remember the 5th of November...

Wednesday, October 28, 2009

They Are Selling You

0 statements

Thursday, October 22, 2009

Report on attacks against Michael Jude Gogulski 5 September 2009

1 statements

All supporters of Mike Gogulski and are encouraged to spread this report far and wide. Original post and source documents available here.


• v1.0 – 20090906
o Original version, real names, episodes 1-9, 6 image attachments
• v1.1 – 20090908
o Name labels harmonized in preparation for generation of 2 versions
o Forked into full and no-names versions
o Minor cleanup throughout
o Added offense “Abuse of Authority by Public Official”
o Introduction added to Episode 1, including first interaction with WITNESS
o Episode 9 expanded
o Episodes 10 and 11 added
o Catalogue of injuries added
o Tables of contents and figures added
• V1.2 – 20091022
o Release version, with relevant, known names


CATALOGUE OF INJURIES (created 8 September 2009) 5
EPISODE 1 – Saturday, 5 September 2009, inside building, BAR 6
EPISODE 2 – 5 September 2009, courtyard, BAR 7
EPISODE 2 – 5 September 2009, courtyard, BAR 8
EPISODE 3 – 5 September 2009, courtyard, BAR 9
EPISODE 10 – RESIDENCE – Saturday, 5 September 2009 18
EPISODE 11 – RESIDENCE – Sunday, 6 September 2009 19
EPISODE 12 – RESIDENCE, POLICE STATION – Monday, 7 September 2009 20

Figure 1 - Paramedic service receipt 22
Figure 2 - Predvolanie envelope, with signature 22
Figure 3 - Predvolanie, front 23
Figure 4 - Predvolanie, back 24
Figure 5 - Hospital medical report 25


Michael Jude Gogulski – Bar patron, victim, complainant, victim, prisoner, victim, patient, witness.

WITNESS – Female who frequents/works at BAR. Brunette, short hair, late 20s to early 30s. Knows me by sight and by name.

BARTENDER – Early-30s female, black hair. Bartender/supervisor at BAR.

ATTACKER – Manager/owner of BAR. Early 40s (?), moustache, straight greasy hair. Presumably Ján Kurtulík, owner/officer of KELLE, s.r.o., operator of the BAR.

BLONDE – Unknown blonde female associate of ATTACKER’s, possibly his business partner.

MIROSLAV PAŠEK – Police officer and main police attacker, about 5’10”, muscled, close-cropped hair, early to mid-30s. Standard police uniform. Identified by name tag pinned to uniform chest, left side. Two-stars plus wings rank insignia (uncertain).

CURLY – Police officer with short dark curly hair, fat with prominent belly, early to mid-40s. Equal in rank or superior to MIROSLAV PAŠEK. Standard police uniform.

ROOKIE1 and ROOKIE2 – Early-20s police officers wearing blue jumpsuit type police uniforms.

DISPATCHER – Emergency police dispatcher responding to my call at telephone number 158.

MARTIN – English-speaking police officer assigned to interpreter duty. Late 20s to early 30s.

FRIEND1 – My friend who I called from jail.

GUEST1 and GUEST2 – Two female couchsurfing guests from Slovenia staying at my residence.

FRIEND2 – My friend who met me at the hospital and drove me home.


POLICE STATION – Police station where I was taken. Šuňavcova 2, Bratislava – Nové Mesto

BAR – “Erotic Salon” establishment at Mikovíniho 2, Bratislava, Slovakia. Called variously “Wild Angels” and “Nymfa Salon”. Operated by Kelle, s.r.o., operated in turn by its officer, Ján Kurtulík. Location of attack by ATTACKER.

RESIDENCE – My flat.

CATALOGUE OF INJURIES (created 8 September 2009)

1. 2-cm round dermal abrasion, outer left elbow
Possible Source: Falling to ground after being struck by ATTACKER; Falling to ground after being struck by MIROSLAV PAŠEK at bar or in cell
2. 1.5-cm oblong dermal abrasion, inner left elbow
Possible Source: Scraped BAR wall while being held in pain-lock hold against wall by MIROSLAV PAŠEK
3. Several other dermal and epidermal small abrasions on outer left elbow
Possible Source: Uncertain
4. 2-cm round dermal abrasion, inner right elbow
Possible Source: Falling to ground after being struck by MIROSLAV PAŠEK at bar or in cell
5. 1-cm epidermal cut, right index finger
Possible Source: Uncertain
6. Two .5 to .75-cm dermal abrasions to head, 3cm above hairline at forehead
Possible Source: Head smashed into wall at BAR by MIROSLAV PAŠEK (multiple times)
7. 3-cm dermal laceration, behind left ear
Possible Source: Uncertain
8. 1-cm dermal abrasion, top of left knee
Possible Source: Falling to ground after being struck by ATTACKER; Falling to ground after being struck by MIROSLAV PAŠEK at bar or in cell
9. 1.5-cm light dermal abrasion, front of left knee
Possible Source: Falling to ground after being struck by ATTACKER; Falling to ground after being struck by MIROSLAV PAŠEK at bar or in cell
10. 6-cm x 5-cm deep contusion, inner side top of left knee. Purpling bruise
Possible Source: Falling to ground after being struck by MIROSLAV PAŠEK at bar or in cell
11. 5-cm x 4-cm light contusion, left thigh, 10-15-cm from kneecap. Light bluish bruise.
Possible Source: Uncertain
12. 8-cm x 4-cm contusion, upper right inner arm. Banded and jointed pattern reflecting 2 or 3 fingers’ grip.
Possible Source: Attack by MIROSLAV PAŠEK in holding cell
13. 6-cm x 2-cm light contusion, right side of back below scapula, near side.
Possible Source: Punched by MIROSLAV PAŠEK or CURLY at BAR
14. Contusion to right pectoralis.
Possible Source: Punched by MIROSLAV PAŠEK at BAR
15. Contusions to ribs and connective tissue below right pectoralis.
Possible Source: Punched by ATTACKER1, by MIROSLAV PAŠEK or CURLY at BAR, or by MIROSLAV PAŠEK in cell
16. Contusion to upper lumbar spine
Possible Source: Punched by MIROSLAV PAŠEK or CURLY at BAR
17. Contusion to lower tip of right scapula
Possible Source: Punched by MIROSLAV PAŠEK or CURLY at BAR

EPISODE 1 – Saturday, 5 September 2009, inside building, BAR

~4:00 AM: I arrive at BAR and order a whiskey. As I walk to a free table, WITNESS sees me and calls my name. I’ve introduced myself to her by name and spoken to her at length during two previous visits. We greet each other and I offer here some of my whiskey. She drains the glass instantly. I get another from the bar.

~4:35 AM: I am told “You must leave” by BARTENDER. She has been giving me trouble for only buying drinks rather than the other services on the menu as well.

After refusing to leave for no valid reason, and after dashing briefly upstairs in reaction to hearing a woman screaming but finding nothing amiss (WITNESS had gone upstairs with a patron), BARTENDER makes a phone call. Shortly after, ATTACKER appears in BAR with BLONDE. ATTACKER has a conversation with BARTENDER, stands behind bar looking at me. He is clearly the owner or manager. BLONDE also stands behind bar, and I observe her doing paperwork. ATTACKER and BLONDE retire to back room.

There were several other people in the establishment who witnessed me reacting to the scream, and being asked to leave and refused service: three presumably Slovak patrons, and 3-4 female staff.

After relenting to her demand and while asking a final time for a last drink (she told me they had stopped serving, then went to deliver drinks to some guests), I take a photograph of BARTENDER with my mobile phone and exit the building into the courtyard. As I leave, I observe BARTENDER hurrying into the back room.

EPISODE 2 – 5 September 2009, courtyard, BAR

Between Episode 1 and 4:53 AM

I approach the outer gate to the courtyard and find it locked. I turn around to see ATTACKER emerge from door to back office and walking toward me. ATTACKER carries some sort of blunt weapon (metal baton?) in right hand, resting the weapon against the back of his head as he approaches me.

ATTACKER approaches me and a verbal exchange begins. I demand the door be unlocked. ATTACKER demands that I delete the photo of BARTENDER. I refuse. ATTACKER makes threatening gestures and continues approaching me more closely. Exchange continues until ATTACKER strikes me at least once, possibly twice, on right side of upper body with his left hand. He then strikes me open-handed on right side of face, causing my glasses to fly off and clatter to the floor of the courtyard somewhere.

I tell ATTACKER now that I will delete the photo of BARTENDER. I take the mobile phone (Nokia 6120c) from my pocket. He takes it from my hand and begins looking for the photo. I snatch it from his hands, show him the screen, locate the photo of BARTENDER, delete it, then page through other photos until he is satisfied it has been deleted.

ATTACKER now opens the gate to the courtyard and walks back into his the back room office, inside which I can see a number of active video monitors. He sits behind a desk looking toward me, while BLONDE sits in a chair in front of the desk, facing the video monitors. I search for my glasses on the ground and cannot find them.

CHARGEABLE OFFENSES: False Imprisonment, Assault and Battery (all to ATTACKER)

EPISODE 2 – 5 September 2009, courtyard, BAR

Still in the courtyard, I dial 150 on my mobile phone at 4:53 AM. I tell respondent I need police. I’m told this is the fire department, and to call 158. I hang up and call 158 to be answered by DISPATCHER at 4:54 AM.

I tell DISPATCHER that I may have been robbed of my glasses and that I have been physically assaulted, requesting the police to come. I give him the location and address.

I continue searching for my glasses, to no avail, remaining in the courtyard. Several times I approach the open door to the back office where ATTACKER and BLONDE sit as described above, tell them that I’ve called the police. Over the course of ~10 minutes waiting for the police to arrive, I make an escalating series of demands for money from ATTACKER to simply leave and forget the incident, starting at €500 and ending at €3000. ATTACKER is impassive, says nothing. BLONDE never looks in my direction, and I don’t hear them speaking to each other.

EPISODE 3 – 5 September 2009, courtyard, BAR

~5:05 AM. Two police cars arrive, carrying MIROSLAV PAŠEK, CURLY, ROOKIE1 and ROOKIE2.

I stand behind open gate to courtyard, smoking a cigarette. Police stalk past me and enter ATTACKER’s office directly. Presumably a conversation occurs between ATTACKER and/or BLONDE and one or more police officers.

Either ROOKIE1 or ROOKIE2 remains outside the office. I tell him that I’m the one who called DISPATCHER. He says something to other police officers, who emerge from office.

Officers begin asking me questions, which I have trouble following. I tell them that ATTACKER attacked me, knocked off my glasses and that I can’t find them - presumed stolen.

Main interrogator quickly becomes MIROSLAV PAŠEK, who is short-tempered and aggressive. He asks more questions about incident. I try to respond as best I can in broken Slovak. MIROSLAV PAŠEK grabs my cigarette out of my hand and throws it to the floor. “What are you doing?” I ask (or something to this effect).

MIROSLAV PAŠEK: „Občiansky preukaz.” (“ID card.”)

Me: „To nemám.” (“I don’t have that.”)

MIROSLAV PAŠEK: „Pas.” (“Passport.”)

Me: „To nemám.” (“I don’t have that.”)

There may be more words after this exchange. My memory is cloudy.

At this point, MIROSLAV PAŠEK strikes me several times in the right side. At least the first blow is with his left hand. I cry out in pain and fall to the ground.

I cannot remember the remainder of the sequence of events which occurred at the BAR courtyard clearly.

MIROSLAV PAŠEK demands I stand, and I comply. I tell him this is going to make an interesting story for tomorrow’s SME or Pravda, featuring his name. He becomes enraged, strikes me again at least once, grabs my right arm, pushes me to wall of BAR building between entry door and back office door. Pushing me into the wall causes my head to impact the wall. MIROSLAV PAŠEK pins my upper body to the wall and wrenches my right arm up behind my back, putting extreme strain on my right shoulder and elbow. MIROSLAV PAŠEK says something to the effect that he doesn’t want to hear anything about seeing himself in SME or Pravda.

During all attacks by MIROSLAV PAŠEK, I cry out in pain and terror. Neighbors may have heard, and should be interviewed.

Other incidents during Episode 3:

Police finally understand that I have neither an ID card nor passport because I am a stateless person. They demand to see my Travel Document, which is not with me.

At one point, either CURLY or MIROSLAV PAŠEK makes some sort of threatening remark referring to “Američan.” I laugh. MIROSLAV PAŠEK strikes me again several times, and I collapse again.

I am pressed up against the entry door to the building in the pain-restraint hold as before. With my left hand I attempt to open the door to escape MIROSLAV PAŠEK’s attacks. It is locked. MIROSLAV PAŠEK and others observe me. MIROSLAV PAŠEK strikes me several times in the lower back, right side, and spine. At least one other police officer strikes me in the ribs, spine or lower back.

After more insults and threats, demands for respect and compliance, “speak this way”, etc., I am turned around and released to face MIROSLAV PAŠEK. I gaze at his name tag and memorize his name. MIROSLAV PAŠEK observes this and asks what I am looking at. I don’t respond. MIROSLAV PAŠEK strikes me several times and places me back in the restraint hold, smashing my head into the wall again. He asks again what I was looking at. I laugh. He wrenches my arm much harder, either forcing me up the wall or causing me to rise onto my toes. The pain is extreme. “Nothing,” I say.

At one point after being struck by MIROSLAV PAŠEK, falling to the ground, beaten by MIROSLAV PAŠEK while on the ground and then demanded by MIROSLAV PAŠEK to stand, I remained sitting and raised both arms with wrists crossed, asking to simply be taken to jail. Laughter resulted from MIROSLAV PAŠEK and several other officers, followed by MIROSLAV PAŠEK’s repeated demand to stand.

At some point they may have demanded proof that I deleted the photo of BARTENDER from my mobile phone. I laugh and say that proof of this is impossible, but page through my photos anyway until they are satisfied it is gone.

Ant some point during this encounter in the BAR courtyard, one of the police officers (not MIROSLAV PAŠEK) walked to the outer gate which was standing open. He closed the gate, making exit or observation impossible.

Toward the end of this engagement, one of the female staff, WITNESS, opened the door to the building and looked out. She looked me directly in the eyes, I believe as I was sitting on the ground, freshly beaten. She closed the door quickly.

Eventually, agreement is reached that we will go together to my flat to retrieve my Travel Document so they can verify my identity. I am bundled into a police car, back seat right side. I can’t recall the driver. ROOKIE1 or ROOKIE2 sat in the back to my left.

CHARGEABLE OFFENSES: Assault and Battery plus Abuse of Authority by Public Official (MIROSLAV PAŠEK and unknown officer who struck me in ribs), Failure to Report Crime (other 2 officers)


ROOKIE demands I wait in the car, opens car door, demands I exit and stand by car. I am then escorted to front door of RESIDENCE building. I open front door with my electronic key. Officers ask on which floor I live, and I tell them the 5th. Two officers (one ROOKIE and another not recalled) take the stairs, while I ride the elevator with the others. ROOKIE takes position in front of my door, demands I opened it, asking if anyone else is in the flat. I tell them two couchsurfers are present, GUEST1 and GUEST2.

ROOKIE allows me to open door with my key and reach inside to turn on lights. I call to GUEST1, asking her to bring my backpack to the door. I retrieve my Travel Document from the backpack and give it back to GUEST1. Officers take Travel Document. I tell GUEST1 repeatedly to call FRIEND1, tell her what was happening, that I was going to jail, and that she could find info on my computer.

Police officers demand I come back down stairs with them, load me back into car and drive me to POLICE STATION.


My memory is increasingly cloudy. I am trying to hold on to a single fact, the name of MIROSLAV PAŠEK. I am told to sit on a bench while discussion goes on inside an office near the entry to the building of my case. The officers have my Travel Document with them. ROOKIE1 or ROOKIE2 stands in hallway outside office watching me.

ROOKIE1/2 demands I empty my pockets, take off belt, turn off mobile phone, leave all objects on table opposite holding cell door. I comply. I am led into holding cell. I ask for water and to visit the toilet and am told “soon”.

There is part of a bottle of water in the cell. I drink it and place the empty bottle next to another one in the cell.

I lay down on the bench to rest. I notice my jeans are wet on the back side, presumably from falling on to wet ground at the BAR courtyard. I take off my jeans and lay them on the bench to dry, and lay down again. A passing officer tells me I must put my jeans back on. I refuse, telling him they are wet. He says that I must, since other people are passing by the open-bar door of the cell. “Prežijú,” I tell him – “They will survive.” He goes away.

After some time I am led out of the cell into an office. A male officer with short dark hair and a black laptop computer wants to interview me. He is assisted by another officer, female with long blonde curly hair. I answer a few basic questions. Female officer asks me for my mother’s name. I tell her. She doesn’t understand, asks me to write it down. I ask her if I may have paper and pen to make notes. She refuses. I refuse to write anything unless I can take my own notes. Eventually she relents and writes down my parents’ names herself with spelling assistance from me.

The male interrogator is asking a series of questions about the events of the evening. He asks why I took the photograph of BARTENDER. I state that I don’t want to answer. I am told that I must answer. I tell the officers that I’m not going to answer any more questions without an interpreter and an attorney.

During interrogation I state that I was beaten by police at BAR courtyard. Police officers are impassive.

During interrogation CURLY appears at the door to the room. When I turn to look at him he turns away before I can view his name badge, while he looks me in the eyes.

I am taken back to my cell, and lay down again. I am in extreme pain all over the right side of my body. I cannot lay on that side, and moving is painful. I feel extremely cold, and parts of my body are trembling at random.

POTENTIAL OFFENSE: Failure to Report a Crime (two officers)


MIROSLAV PAŠEK comes to the door to my cell after a few minutes. MIROSLAV PAŠEK demands that I sit up. I ask why. He says I must obey him. I refuse and lay down. He calls me insulting names and threatens me. I ask if he really wants to do that while on video (camera mounted at back of cell near ceiling) and he snarls. MIROSLAV PAŠEK enters the cell, demands again that I sit up. I ignore him. MIROSLAV PAŠEK grabs my shirt collar and right upper arm with his left hand and attempts to haul me up, loses his grip. MIROSLAV PAŠEK grabs me again, hauls me to my feet, strikes me several times in right side, and on head. I fall to the floor, striking my head on the floor. MIROSLAV PAŠEK demands that I get on the bench and sit. I comply.

CHARGEABLE OFFENSES: Assault and Battery, Abuse of Authority by Public Official (MIROSLAV PAŠEK)


An English-speaking police officer who calls himself MARTIN appears at my cell door saying he’s been asked to help me with the interview since my Slovak is not so good.

I ask MARTIN if I’m being charged with anything, and he says no. I ask if I’m free to go, and he says no, I must give a report. I tell him I’m not giving any information without an attorney.

MARTIN goes away and comes back several minutes later. Normally I would give the attorney’s name to them and they would call, because it’s “not like America here”. But they give me my mobile phone. I call FRIEND1, explain situation, ask for help. I turn the mobile phone off and return it to MARTIN, who places it back with my items on the table opposite the cell.

I remain sitting. I am dizzy and in great pain. My head hurts like nothing before. I feel like my temperature is dropping rapidly. I continue to experience tremor in my extremities.

Some time later I stand and go to the cell door. MARTIN sees me, asks if I am all right. I tell him about my symptoms. He asks if I want a doctor. I say yes. He says a doctor will be here shortly. I ask him if there is a rule that I cannot lay down on the bench. He says no. I ask him then if his friend Miro (MIROSLAV PAŠEK) is still here, since he beat me in the cell because I would not sit up. He states that MIROSLAV PAŠEK has left, his shift having ended.

POTENTIAL OFFENSE: Failure to Report a Crime (MARTIN)


MARTIN returns to my cell and leads me to another office. Two more senior police officers are there. One is typing something on a typewriter. They ask me a number of questions about answering questions for the report, which I refuse to do. MARTIN interprets. I again state that I was beaten by police officers at BAR, and then by MIROSLAV PAŠEK in the holding cell. They seem incredulous.

POTENTIAL OFFENSE: Failure to Report a Crime (MARTIN, two interrogating officers)

The older officer sitting on the right side of the office at one point says that I can leave if I pay a penalty of €30. I refuse, saying I’m not paying anything.

Two paramedics arrive. One speaks English and asks me about my condition. They decide to recommend that I go to the hospital, and I agree. They fill out and ask me to sign a Patient Agreement. I comply. I demand a copy of what I signed and they refuse, saying “You don’t need that, that’s just for us,” until finally they give me a blank copy of the same document (ATTACHED).

MARTIN tells me that I’m to be released with a “predvolanie” order to appear at the police station at 8am Monday morning (ATTACHED), and that I’ll be taken to the hospital without escort “So it doesn’t seem like you’re a murderer or something.” I agree, and sign an envelope (ATTACHED) indicating my receipt of the predvolanie document.

The paramedics call the ambulance service. There is trouble because I don’t have my insurance card with me and can’t remember the name of the insurance company. The paramedics require €2 in payment for something. I have a five-euro note, which I give them. They don’t have the proper change. They return a €2 coin to me, and I tell them to keep the change. They give me a cash receipt (ATTACHED).

Knowing I’m released, I ask to make a phone call. My phone and other items are given to me. I phone GUEST1 at 8:34AM, who has already left my residence with her friend.


I go with the ambulance personnel and am taken to the hospital at Kramáre. Female paramedic takes my blood pressure and presumably pulse prior to departure. At the hospital, I am given an intake examination in the emergency room. I am then X-rayed 3 times for the head, twice for the chest. I am given a physical examination by one doctor. I am given an ultrasound examination of the abdomen and lower chest. I am given a second examination of a sort (see below), during which the doctor reviews the X-rays. I am discharged without admission or treatment, with a medical report (ATTACHED).

Between examinations I lay on seats in the hallway and try to sleep. I cannot sleep. The pain in my right side is debilitating, and I continue to experience peripheral tremors.

During the second general examination (largely verbal) in the emergency room, I point out to Dr. Michal Magala that I have a number of cuts, scrapes and bruises that I received while being beaten by the police. I ask that they be examined and noted in the file. Magala tells me that these are “somariny” (“jackassery”), and that I could have gotten them anywhere. I insist that I’m here for a medical examination after being attacked, and want all of my injuries noted in detail. Magala yells at me, again saying these are “somariny”, approaches me threateningly and smashes his left fist into a cabinet between us for emphasis.

My friend FRIEND2 meets me at the hospital and drives me home, where I arrive about 11:20AM, Saturday, 5 September 2009.

Deficiencies in the medical report:
1. The notation “Homans negat.” indicates that a physical test for indications of deep vein thrombosis was conducted. No such test was conducted.
2. “bez vytoku krvi genitalu” indicates there was no discharge of blood from the genitals. No questions about this were asked, nor was I ever asked to remove my trousers for the necessary examination.
3. The report claims that a pelvic palpation examination was conducted. No such examination was conducted.
4. The report claims that an examination of the legs was conducted. No such examination was conducted.

EPISODE 10 – RESIDENCE – Saturday, 5 September 2009

I take 800mg of ibuprofen, make some phone calls and fall asleep around 12:30, for about sixteen hours. I’m in extreme pain. I cannot lay on my right side, my head hurts, I feel dizzy, moving my chest in any fashion causes great pain. The tremors have ceased. I am terrified, and can’t think clearly.

EPISODE 11 – RESIDENCE – Sunday, 6 September 2009

I begin writing this report, and share early versions with a number of people.

I photograph some of my injuries with my mobile phone camera and a mirror.

A friend comes and photographs my injuries, and takes with him the unwashed clothing I was wearing during the attacks.

I am supposed to give a statement at 8am on Monday. Numerous contacts to lawyers result in failure. All are either not certified for the criminal system, on vacation, don’t speak English, or otherwise unavailable.

I make contact with a court-certified interpreter, and arrange to meet at her flat at 7:30am.

I go to a restaurant to have dinner around 8pm. A friend’s contact calls to give me the number of a qualified lawyer. I arrange with the lawyer that I will phone him at 7:30am, and he will call the police station to exercise my right to postpone the interview until I can have counsel present.

I go home and make phone calls and other arrangements. I cannot sleep. I am terrified, in pain and can’t think clearly. I set five alarms on my mobile phone to awaken me before 6am, and finally get to sleep around 4am.

EPISODE 12 – RESIDENCE, POLICE STATION – Monday, 7 September 2009

I awaken at 10:40, having not heard 5 alarms or a call from FRIEND1 at 8:11am.

I shower, dress, take 800mg of ibuprofen and go to a restaurant to have coffee. I phone the interpreter and ask her to call the lawyer for me, for him to call the police station, apologize for me and to arrange another time. She phones him and calls me back, saying that I should just contact them myself. He doesn’t want to represent me now, because he does not speak English.

I walk to the POLICE STATION, appearing there around 11:45am. Since I have no interpreter, they will arrange one.

While I am waiting, I briefly catch sight of CURLY entering the building. I am terrified.

The police tell me that the interpreter will arrive at 1:00pm. I leave to meet a friend, and show her an early version of this report in hardcopy.

I return to the police station, part with my friend and enter at 1:00pm.

Around 1:15pm the interpreter arrives.

The interviewing officer is the same one who told me to put my jeans back on while in the cell, and who attempted to conduct the interview previously. The interpreter is presumably another police officer, unknown to me previously.

I apologize profusely for being late. The officers seem to accept this.

I ask if I’m being charged with anything. No. But I could be charged with a breach of public order offense, a misdemeanor which carries a €100 fine.

I tell them that I want to move the interview to a time later in the week when I can have counsel present. It’s not clear whether or not this is permitted, but they insist on carrying out the interview now.

The parameters of the interview are set such that I can discuss things with the interpreter at length, and he will then dictate a summary in Slovak to be entered into the report.

I tell them that I am reluctant to give any information, because I was beaten by the police at the scene and while in the holding cell. They seem incredulous and shrug this off.

I tell them I don’t want to file any charges or register any complaints.

I end up signing a “witness statement” of some sort, which contains a very vague description of events, roughly this:

Around 4:00 AM on Saturday, 5 September 2009 I went to BAR. I had a couple of drinks. There was a conflict between me and the bartender. As I left, I could not find my glasses. I called the police. The police arrived and asked me for my ID, but I didn’t understand. The police took me home to retrieve my ID, and then to the police station to file a report. I was released to the hospital for medical treatment.

I was not resisting the police in not providing my ID, there was a misunderstanding.

I sign two copies of the statement, and ask for one copy. I am refused, the interpreter telling me that they are not allowed to give me a copy.

I leave the police station around 2:30pm. I go home, take 800mg of ibuprofen and sleep for six hours.

Saturday, October 17, 2009

Monday, September 14, 2009

Hillary Clinton Devestates Pakistan

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This is horrible! Not even the Hillary Clinton Warning Sirens saved them.

U.S. Condemned For Pre-Emptive Use Of Hillary Clinton Against Pakistan

Friday, September 11, 2009

Then Again...

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...this one is also quite fitting:

Remember 9-11

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A more proper tribute to the memory of 9-11 has never been found:

Friday, August 21, 2009

Crazy Facts from GovernmentLand

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Here are some facts (from the New York Times no less) which show why government is all fail, all the time:

The United States incarcerates people at nearly five times the world average. Of those sentenced to state prisons, 82 percent were convicted of nonviolent crimes, according to one study.

California spends $216,000 annually on each inmate in the juvenile justice system. In contrast, it spends only $8,000 on each child attending the troubled Oakland public school system, according to the Urban Strategies Council.

For most of American history, we had incarceration rates similar to those in other countries. Then with the “war on drugs” and the focus on law and order in the 1970s, incarceration rates soared.

One in 10 black men ages 25 to 29 were imprisoned last year, partly because possession of crack cocaine (disproportionately used in black communities) draws sentences equivalent to having 100 times as much powder cocaine. Black men in the United States have a 32 percent chance of serving time in prison at some point in their lives, according to the Sentencing Project.

“There are only two possibilities here,” Mr. Webb said in introducing his bill, noting that America imprisons so many more people than other countries. “Either we have the most evil people on earth living in the United States, or we are doing something dramatically wrong in terms of how we approach the issue of criminal justice.”

The next logical question is this: If government sucks so bad at all these things, as the NYT admits, then why the hell does the NYT want government to be involved in healthcare at all? It's like saying that JimBob is the worst manager ever, therefore we should give JimBob a new set of managerial responsibilities.

No! The answer is to fire JimBob and never do business with his organization again, ever!

Thursday, August 6, 2009

Iraq War: A Biblical Event

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According to some French guy, in early 2003 President Bush called President Chirac and said that God wanted him to invade Iraq to defeat Gog and Magog, two Satanic forces mentioned in the Bible.

Holy fuck. I suspected something Biblical (not oil/energy or money) in Bush's Iraq invasion all along. And now a Frenchie interviews (former) president of France Chirac, and the truth comes out.

I wonder why the US mainstream media isn't covering this story? Oh, that's right, it's because they are all shills and puppets for the Christeo-Satanic forces that run our government. How could I have forgotten?

Here is the article:

Incredibly, President George W. Bush told French President Jacques Chirac in early 2003 that Iraq must be invaded to thwart Gog and Magog, the Bible’s satanic agents of the Apocalypse.

Honest. This isn’t a joke. The president of the United States, in a top-secret phone call to a major European ally, asked for French troops to join American soldiers in attacking Iraq as a mission from God.

Now out of office, Chirac recounts that the American leader appealed to their “common faith” (Christianity) and told him: “Gog and Magog are at work in the Middle East…. The biblical prophecies are being fulfilled…. This confrontation is willed by God, who wants to use this conflict to erase his people’s enemies before a New Age begins.”

This bizarre episode occurred while the White House was assembling its “coalition of the willing” to unleash the Iraq invasion. Chirac says he was boggled by Bush’s call and “wondered how someone could be so superficial and fanatical in their beliefs.”

After the 2003 call, the puzzled French leader didn’t comply with Bush’s request. Instead, his staff asked Thomas Romer, a theologian at the University of Lausanne, to analyze the weird appeal. Dr. Romer explained that the Old Testament book of Ezekiel contains two chapters (38 and 39) in which God rages against Gog and Magog, sinister and mysterious forces menacing Israel. Jehovah vows to smite them savagely, to “turn thee back, and put hooks into thy jaws,” and slaughter them ruthlessly. In the New Testament, the mystical book of Revelation envisions Gog and Magog gathering nations for battle, “and fire came down from God out of heaven, and devoured them.”

In 2007, Dr. Romer recounted Bush’s strange behavior in Lausanne University’s review, Allez Savoir. A French-language Swiss newspaper, Le Matin Dimanche, printed a sarcastic account titled: “When President George W. Bush Saw the Prophesies of the Bible Coming to Pass.” France’s La Liberte likewise spoofed it under the headline “A Small Scoop on Bush, Chirac, God, Gog and Magog.” But other news media missed the amazing report.

Subsequently, ex-President Chirac confirmed the nutty event in a long interview with French journalist Jean-Claude Maurice, who tells the tale in his new book, Si Vous le Répétez, Je Démentirai (If You Repeat it, I Will Deny), released in March by the publisher Plon.

Oddly, mainstream media are ignoring this alarming revelation that Bush may have been half-cracked when he started his Iraq war. My own paper, The Charleston Gazette in West Virginia, is the only U.S. newspaper to report it so far. Canada’s Toronto Star recounted the story, calling it a “stranger-than-fiction disclosure … which suggests that apocalyptic fervor may have held sway within the walls of the White House.” Fortunately, online commentary sites are spreading the news, filling the press void.

The French revelation jibes with other known aspects of Bush’s renowned evangelical certitude. For example, a few months after his phone call to Chirac, Bush attended a 2003 summit in Egypt. The Palestinian foreign minister later said the American president told him he was “on a mission from God” to defeat Iraq. At that time, the White House called this claim “absurd.”

Recently, GQ magazine revealed that former Defense Secretary Donald Rumsfeld attached warlike Bible verses and Iraq battle photos to war reports he hand-delivered to Bush. One declared: “Put on the full armor of God, so that when the day of evil comes, you may be able to stand your ground.”

It’s awkward to say openly, but now-departed President Bush is a religious crackpot, an ex-drunk of small intellect who “got saved.” He never should have been entrusted with the power to start wars.

For six years, Americans really haven’t known why he launched the unnecessary Iraq attack. Official pretexts turned out to be baseless. Iraq had no weapons of mass destruction after all, and wasn’t in league with terrorists, as the White House alleged. Collapse of his asserted reasons led to speculation about hidden motives: Was the invasion loosed to gain control of Iraq’s oil—or to protect Israel—or to complete Bush’s father’s vendetta against the late dictator Saddam Hussein? Nobody ever found an answer.

Now, added to the other suspicions, comes the goofy possibility that abstruse, supernatural, idiotic, laughable Bible prophecies were a factor. This casts an ominous pall over the needless war that has killed more than four thousand young Americans and cost U.S. taxpayers perhaps $1 trillion.

Wednesday, July 29, 2009

My Reply to an Essay on China, the US, and Yu Wan Mei

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The Onion was recently acquired by Yu Wan Mei. A Stanford professor wrote about the entire thing (click the link, it's a good essay).

I emailed said professor my thoughts on the matter. Here is my email:

I thought your essay ( was quite good, and you analyzed the relationship between China and the US quite well via your dissection of The Onion's recent "sale" to Yu Wan Mei.

However, I think you are a bit mistaken in your portrayal of US politicians vs. Chinese politicians. I, for one, have seen nothing but the same theatrical Grand High Poobah attitude in US politicians that you find in China. I certainly haven't seen this sincerity and honesty that you allege exists within the palaces of Washington DC. I think that Chinese and US politicians are closer to the same breed, and conduct far more of the same carnival show, then you claim.

For all the cultural differences between the people of these two countries, I would argue that the working civilian in the US has a great deal more in common with the Chinese civilian than he has with any politician from his homeland. If you want to find the same "breed" of people here, you must look not to imaginary national boundaries, but instead you must look to a far more real boundary: that between the powerful and the powerless - the productive class vs the parasite class - the citizen vs the politician. Our adversay is not across the Pacific, but across the Potomac.

Aaron Kinney

Monday, July 27, 2009

Monday, July 20, 2009

Commander in Chief: Council on Foreign Relations

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And I, for one, welcome our new CFR overlords..

Thursday, July 16, 2009

Friday, July 10, 2009

Mike Gogulski PWNS Social Security

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When God and Government Mix

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I don't see how this could possibly go wrong:

Irish atheists are horrified by new legislation making blasphemy illegal, and punishable by a 25,000-Euro fine. Christians of all stripes should be, too.

As part of a revision to defamation legislation, the Dail (Irish Parliament) passed legislation creating a new crime of blasphemy. This attack on free speech, debated for several months in Europe, has gone largely unnoticed in the American press.

The text of the legislation is provided at the end of this post.

How does this impact free speech? Just don’t be rude.

* Atheists can be prosecuted for saying that God is imaginary. That causes outrage.
* Pagans can be prosecuted for saying they left Christianity because God is violent and bloodthirsty, promotes genocide, and permits slavery.
* Christians can be prosecuted for saying that Allah is a moon god, or for drawing a picture of Mohammed, or for saying that Islam is a violent religion which breeds terrorists.
* Jews can be prosecuted for saying Jesus isn’t the Messiah.

Is it really THAT big a deal?

Ireland’s Blasphemy Bill not only criminalizes free speech, it also gives the police the authority to confiscate anything deemed “blasphemous”. They may enter and search any premises, with force if needed, upon “reasonable suspicion” that such materials are present.

* The local Freethinkers society, with its copies of Hitchens’ God Is Not Great: How Religion Poisons Everything.
* The video store, with copies of The God Who Wasn’t There.
* The history teacher, who uses The Dark Side of Christian History to teach her class.
* The library, with its collection of books deemed blasphemous.
* Even the homeowner who lets the wrong person know he has a copy of Salman Rushdie’s The Satanic Verses could find his door broken in by the Thought Police, his bookshelves ransacked, and his books burning in the front yard!

Satirizing religion in any way, shape, or form, if it “causes outrage”, is now a prosecutable offense in Ireland. Saying anything negative about a religion, if it “causes outrage”, can now be prosecuted as a crime. Just like in Muslim countries.

Witness the return of the Dark Ages.

The text of the legislation:

36. Publication or utterance of blasphemous matter.

(1) A person who publishes or utters blasphemous matter shall be guilty of an offence and shall be liable upon conviction on indictment to a fine not exceeding €100,000. [Amended to €25,000]

(2) For the purposes of this section, a person publishes or utters blasphemous matter if (a) he or she publishes or utters matter that is grossly abusive or insulting in relation to matters held sacred by any religion, thereby causing outrage among a substantial number of the adherents of that religion, and (b) he or she intends, by the publication or utterance of the matter concerned, to cause such outrage.

(3) It shall be a defence to proceedings for an offence under this section for the defendant to prove that a reasonable person would find genuine literary, artistic, political, scientific, or academic value in the matter to which the offence relates.

37. Seizure of copies of blasphemous statements.

(1) Where a person is convicted of an offence under section 36, the court may issue a warrant (a) authorising any member of the Garda Siochana to enter (if necessary by the use of reasonable force) at all reasonable times any premises (including a dwelling) at which he or she has reasonable grounds for believing that copies of the statement to which the offence related are to be found, and to search those premises and seize and remove all copies of the statement found therein, (b) directing the seizure and removal by any member of the Garda Siochana of all copies of the statement to which the offence related that are in the possession of any person, © specifying the manner in which copies so seized and removed shall be detained and stored by the Garda Siochana.

(2) A member of the Garda Siochana may (a) enter and search any premises, (b) seize, remove and detain any copy of a statement to which an offence under section 36 relates found therein or in the possession of any person, in accordance with a warrant under subsection (1).

(3) Upon final judgment being given in proceedings for an offence under section 36, anything seized and removed under subsection (2) shall be disposed of in accordance with such directions as the court may give upon an application by a member of the Garda Siochana in that behalf.

Tuesday, July 7, 2009

Wednesday, July 1, 2009

Goldman Sachs: Ruler of the Universe

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Rolling Stone Magazine published an article about Goldman Sachs and how it owns Wall Street, D.C., and all of the world. Apparently this article is only in the print edition, and not online. I found it via Cryptogon:


From tech stocks to high gas prices, Goldman Sachs has engineered every major market manipulation since the Great Depression – and they’re about to do it again


The first thing you need to know about Goldman Sachs is that it’s everywhere. The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money. In fact, the history of the recent financial crisis, which doubles as a history of the rapid decline and fall of the suddenly swindled-dry American empire, reads like a Who’s Who of Goldman Sachs graduates.

By now, most of us know the major players. As George Bush’s last Treasury secretary, former Goldman CEO Henry Paulson was the architect of the bailout, a suspiciously self-serving plan to funnel trillions of Your Dollars to a handful of his old friends on Wall Street. Robert Rubin, Bill Clinton’s former Treasury secretary, spent 26 years at Goldman before becoming chairman of Citigroup – which in turn got a $300 billion taxpayer bailout from Paulson. There’s John Thain, the rear end in a top hat chief of Merrill Lynch who bought an $87,000 area rug for his office as his company was imploding; a former Goldman banker, Thain enjoyed a multibillion-dollar handout from Paulson, who used billions in taxpayer funds to help Bank of America rescue Thain’s sorry company. And Robert Steel, the former Goldmanite head of Wachovia, scored himself and his fellow executives $225 million in golden parachute payments as his bank was self-destructing. There’s Joshua Bolten, Bush’s chief of staff during the bailout, and Mark Patterson, the current Treasury chief of staff, who was a Goldman lobbyist just a year ago, and Ed Liddy, the former Goldman director whom Paulson put in charge of bailed-out insurance giant AIG, which forked over $13 billion to Goldman after Liddy came on board. The heads of the Canadian and Italian national banks are Goldman alums, as is the head of the World Bank, the head of the New York Stock Exchange, the last two heads of the Federal Reserve Bank of New York – which, incidentally, is now in charge of overseeing Goldman – not to mention …

But then, any attempt to construct a narrative around all the former Goldmanites in influential positions quickly becomes an absurd and pointless exercise, like trying to make a list of everything. What you need to know is the big picture: If America is circling the drain, Goldman Sachs has found a way to be that drain – an extremely unfortunate loophole in the system of Western democratic capitalism, which never foresaw that in a society governed passively by free markets and free elections, organized greed always defeats disorganized democracy.

The bank’s unprecedented reach and power have enabled it to turn all of America into a giant pump-and-dump scam, manipulating whole economic sectors for years at a time, moving the dice game as this or that market collapses, and all the time gorging itself on the unseen costs that are breaking families everywhere – high gas prices, rising consumer-credit rates, half-eaten pension funds, mass layoffs, future taxes to pay off bailouts. All that money that you’re losing, it’s going somewhere, and in both a literal and a figurative sense, Goldman Sachs is where it’s going: The bank is a huge, highly sophisticated engine for converting the useful, deployed wealth of society into the least useful, most wasteful and insoluble substance on Earth – pure profit for rich individuals.

They achieve this using the same playbook over and over again. The formula is relatively simple: Goldman positions itself in the middle of a speculative bubble, selling investments they know are crap. Then they hoover up vast sums from the middle and lower floors of society with the aid of a crippled and corrupt state that allows it to rewrite the rules in exchange for the relative pennies the bank throws at political patronage. Finally, when it all goes bust, leaving millions of ordinary citizens broke and starving, they begin the entire process over again, riding in to rescue us all by lending us back our own money at interest, selling themselves as men above greed, just a bunch of really smart guys keeping the wheels greased. They’ve been pulling this same stunt over and over since the 1920s – and now they’re preparing to do it again, creating what may be the biggest and most audacious bubble yet.

If you want to understand how we got into this financial crisis, you have to first understand where all the money went – and in order to understand that, you need to understand what Goldman has already gotten away with. It is a history exactly five bubbles long – including last year’s strange and seemingly inexplicable spike in the price of oil. There were a lot of losers in each of those bubbles, and in the bailout that followed. But Goldman wasn’t one of them.


Goldman wasn’t always a too-big-to-fail Wall Street behemoth, the ruthless face of kill-or-be-killed capitalism on steroids – just almost always. The bank was actually founded in 1869 by a German immigrant named Marcus Goldman, who built it up with his son-in-law Samuel Sachs. They were pioneers in the use of commercial paper, which is just a fancy way of saying they made money lending out short-term IOUs to small-time vendors in downtown Manhattan.

You can probably guess the basic plotline of Goldman’s first 100 years in business: plucky, immigrant-led investment bank beats the odds, pulls itself up by its bootstraps, makes shitloads of money. In that ancient history there’s really only one episode that bears scrutiny now, in light of more recent events: Goldman’s disastrous foray into the speculative mania of pre-crash Wall Street in the late 1920s.

This great Hindenburg of financial history has a few features that might sound familiar. Back then, the main financial tool used to bilk investors was called an “investment trust.” Similar to modern mutual funds, the trusts took the cash of investors large and small and (theoretically, at least) invested it in a smorgasbord of Wall Street securities, though the securities and amounts were often kept hidden from the public. So a regular guy could invest $10 or $100 in a trust and feel like he was a big player. Much as in the 1990s, when new vehicles like day trading and e-trading attracted reams of new suckers from the sticks who wanted to feel like big shots, investment trusts roped a new generation of regular-guy investors into the speculation game.

Beginning a pattern that would repeat itself over and over again, Goldman got into the investment-trust game late, then jumped in with both feet and went hog-wild. The first effort was the Goldman Sachs Trading Corporation; the bank issued a million shares at $100 apiece, bought all those shares with its own money and then sold 90 percent of them to the hungry public at $104. The trading corporation then relentlessly bought shares in itself, bidding the price up further and further. Eventually it dumped part of its holdings and sponsored a new trust, the Shenandoah Corporation, issuing millions more in shares in that fund – which in turn sponsored yet another trust called the Blue Ridge Corporation. In this way, each investment trust served as a front for an endless investment pyramid: Goldman hiding behind Goldman hiding behind Goldman. Of the 7,250,000 initial shares of Blue Ridge, 6,250,000 were actually owned by Shenandoah – which, of course, was in large part owned by Goldman Trading.

The end result (ask yourself if this sounds familiar) was a daisy chain of borrowed money, one exquisitely vulnerable to a decline in performance anywhere along the line; The basic idea isn’t hard to follow. You take a dollar and borrow nine against it; then you take that $10 fund and borrow $90; then you take your $100 fund and, so long as the public is still lending, borrow and invest $900. If the last fund in the line starts to lose value, you no longer have the money to pay back your investors, and everyone gets massacred.

In a chapter from The Great Crash, 1929 titled “In Goldman Sachs We Trust,” the famed economist John Kenneth Galbraith held up the Blue Ridge and Shenandoah trusts as classic examples of the insanity of leverage-based investment. The trusts, he wrote, were a major cause of the market’s historic crash; in today’s dollars, the losses the bank suffered totaled $475 billion. “It is difficult not to marvel at the imagination which was implicit in this gargantuan insanity,” Galbraith observed, sounding like Keith Olbermann in an ascot. “If there must be madness, something may be said for having it on a heroic scale.”

Fast-Forward about 65 years. Goldman not only survived the crash that wiped out so many of the investors it duped, it went on to become the chief underwriter to the country’s wealthiest and most powerful corporations. Thanks to Sidney Weinberg, who rose from the rank of janitor’s assistant to head the firm, Goldman became the pioneer of the initial public offering, one of the principal and most lucrative means by which companies raise money. During the 1970s and 1980s, Goldman may not have been the planet-eating Death Star of political influence it is today, but it was a top-drawer firm that had a reputation for attracting the very smartest talent on the Street.

It also, oddly enough, had a reputation for relatively solid ethics and a patient approach to investment that shunned the fast buck; its executives were trained to adopt the firm’s mantra, “long-term greedy.” One former Goldman banker who left the firm in the early Nineties recalls seeing his superiors give up a very profitable deal on the grounds that it was a long-term loser. “We gave back money to ‘grownup’ corporate clients who had made bad deals with us,” he says. “Everything we did was legal and fair – but ‘long-term greedy’ said we didn’t want to make such a profit at the clients’ collective expense that we spoiled the marketplace.”

But then, something happened. It’s hard to say what it was exactly; it might have been the fact that Goldman’s co-chairman in the early Nineties, Robert Rubin, followed Bill Clinton to the White House, where he directed the National Economic Council and eventually became Treasury secretary. While the American media fell in love with the story line of a pair of baby-boomer, Sixties-child, Fleetwood Mac yuppies nesting in the White House, it also nursed an undisguised crush on Rubin, who was hyped as without a doubt the smartest person ever to walk the face of the Earth, with Newton, Einstein, Mozart and Kant running far behind.

Rubin was the prototypical Goldman banker. He was probably born in a $4,000 suit, he had a face that seemed permanently frozen just short of an apology for being so much smarter than you, and he exuded a Spock-like, emotion-neutral exterior; the only human feeling you could imagine him experiencing was a nightmare about being forced to fly coach. It became almost a national cliche that whatever Rubin thought was best for the economy – a phenomenon that reached its apex in 1999, when Rubin appeared on the cover of Time with his Treasury deputy, Larry Summers, and Fed chief Alan Greenspan under the headline THE COMMITTEE TO SAVE THE WORLD. And “what Rubin thought,” mostly, was that the American economy, and in particular the financial markets, were over-regulated and needed to be set free. During his tenure at Treasury, the Clinton White House made a series of moves that would have drastic consequences for the global economy – beginning with Rubin’s complete and total failure to regulate his old firm during its first mad dash for obscene short-term profits.

The basic scam in the Internet Age is pretty easy even for the financially illiterate to grasp. Companies that weren’t much more than pot-fueled ideas scrawled on napkins by up-too-late bong-smokers were taken public via IPOs, hyped in the media and sold to the public for megamillions. It was as if banks like Goldman were wrapping ribbons around watermelons, tossing them out 50-story windows and opening the phones for bids. In this game you were a winner only if you took your money out before the melon hit the pavement.

It sounds obvious now, but what the average investor didn’t know at the time was that the banks had changed the rules of the game, making the deals look better than they actually were. They did this by setting up what was, in reality, a two-tiered investment system – one for the insiders who knew the real numbers, and another for the lay investor who was invited to chase soaring prices the banks themselves knew were irrational. While Goldman’s later pattern would be to capitalize on changes in the regulatory environment, its key innovation in the Internet years was to abandon its own industry’s standards of quality control.

“Since the Depression, there were strict underwriting guidelines that Wall Street adhered to when taking a company public,” says one prominent hedge-fund manager. “The company had to be in business for a minimum of five years, and it had to show profitability for three consecutive years. But Wall Street took these guidelines and threw them in the trash.” Goldman completed the snow job by pumping up the sham stocks: “Their analysts were out there saying is worth $100 a share.”

The problem was, nobody told investors that the rules had changed. “Everyone on the inside knew,” the manager says. “Bob Rubin sure as hell knew what the underwriting standards were. They’d been intact since the 1930s.”

Jay Ritter, a professor of finance at the University of Florida who specializes in IPOs, says banks like Goldman knew full well that many of the public offerings they were touting would never make a dime. “In the early Eighties, the major underwriters insisted on three years of profitability. Then it was one year, then it was a quarter. By the time of the Internet bubble, they were not even requiring profitability in the foreseeable future.”

Goldman has denied that it changed its underwriting standards during the Internet years, but its own statistics belie the claim. Just as it did with the investment trust in the 1920s, Goldman started slow and finished crazy in the Internet years. After it took a little-known company with weak financials called Yahoo! public in 1996, once the tech boom had already begun, Goldman quickly became the IPO king of the Internet era. Of the 24 companies it took public in 1997, a third were losing money at the time of the IPO. In 1999, at the height of the boom, it took 47 companies public, including stillborns like Webvan and eToys, investment offerings that were in many ways the modern equivalents of Blue Ridge and Shenandoah. The following year, it underwrote 18 companies in the first four months, 14 of which were money losers at the time. As a leading underwriter of Internet stocks during the boom, Goldman provided profits far more volatile than those of its competitors: In 1999, the average Goldman IPO leapt 281 percent above its offering price, compared to the Wall Street average of 181 percent.

How did Goldman achieve such extraordinary results? One answer is that they used a practice called “laddering,” which is just a fancy way of saying they manipulated the share price of new offerings. Here’s how it works: Say you’re Goldman Sachs, and comes to you and asks you to take their company public. You agree on the usual terms: You’ll price the stock, determine how many shares should be released and take the CEO on a “road show” to schmooze investors, all in exchange for a substantial fee (typically six to seven percent of
the amount raised). You then promise your best clients the right to buy big chunks of the IPO at the low offering price – let’s say’s starting share price is $15 – in exchange for a promise that they will buy more shares later on the open market. That seemingly simple demand gives you inside knowledge of the IPO’s future, knowledge that wasn’t disclosed to the day-trader schmucks who only had the prospectus to go by: You know that certain of your clients who bought X amount of shares at $15 are also going to buy Y more shares at $20 or $25, virtually guaranteeing that the price is going to go to $25 and beyond. In this way, Goldman could artificially jack up the new company’s price, which of course was to the bank’s benefit – a six percent fee of a $500 million IPO is serious money.

Goldman was repeatedly sued by shareholders for engaging in laddering in a variety of Internet IPOs, including Webvan and NetZero. The deceptive practices also caught the attention of Nichol as Maier, the syndicate manager of Cramer & Co., the hedge fund run at the time by the now-famous chattering television rear end in a top hat Jim Cramer, himself a Goldman alum. Maier told the SEC that while working for Cramer between 1996 and 1998, he was repeatedly forced to engage in laddering practices during IPO deals with Goldman.

“Goldman, from what I witnessed, they were the worst perpetrator,” Maier said. “They totally fueled the bubble. And it’s specifically that kind of behavior that has caused the market crash. They built these stocks upon an illegal foundation – manipulated up – and ultimately, it really was the small person who ended up buying in.” In 2005, Goldman agreed to pay $40 million for its laddering violations – a puny penalty relative to the enormous profits it made. (Goldman, which has denied wrongdoing in all of the cases it has settled, refused to respond to questions for this story.)

Another practice Goldman engaged in during the Internet boom was “spinning,” better known as bribery. Here the investment bank would offer the executives of the newly public company shares at extra-low prices, in exchange for future underwriting business. Banks that engaged in spinning would then undervalue the initial offering price – ensuring that those “hot” opening price shares it had handed out to insiders would be more likely to rise quickly, supplying bigger first-day rewards for the chosen few. So instead of opening at $20, the bank would approach the CEO and offer him a million shares of his own company at $18 in exchange for future business – effectively robbing all of Bullshit’s new shareholders by diverting cash that should have gone to the company’s bottom line into the private bank account of the company’s CEO.

In one case, Goldman allegedly gave a multimillion-dollar special offering to eBay CEO Meg Whitman, who later joined Goldman’s board, in exchange for future i-banking business. According to a report by the House Financial Services Committee in 2002, Goldman gave special stock offerings to executives in 21 companies that it took public, including Yahoo! co-founder Jerry Yang and two of the great slithering villains of the financial-scandal age – Tyco’s Dennis Kozlowski and Enron’s Ken Lay. Goldman angrily denounced the report as “an egregious distortion of the facts” – shortly before paying $110 million to settle an investigation into spinning and other manipulations launched by New York state regulators. “The spinning of hot IPO shares was not a harmless corporate perk,” then-attorney general Eliot Spitzer said at the time. “Instead, it was an integral part of a fraudulent scheme to win new investment-banking business.”

Such practices conspired to turn the Internet bubble into one of the greatest financial disasters in world history: Some $5 trillion of wealth was wiped out on the NASDAQ alone. But the real problem wasn’t the money that was lost by shareholders, it was the money gained by investment bankers, who received hefty bonuses for tampering with the market. Instead of teaching Wall Street a lesson that bubbles always deflate, the Internet years demonstrated to bankers that in the age of freely flowing capital and publicly owned financial companies, bubbles are incredibly easy to inflate, and individual bonuses are actually bigger when the mania and the irrationality are greater.


Nowhere was this truer than at Goldman. Between 1999 and 2002, the firm paid out $28.5 billion in compensation and benefits – an average of roughly $350,000 a year per employee. Those numbers are important because the key legacy of the Internet boom is that the economy is now driven in large part by the pursuit of the enormous salaries and bonuses that such bubbles make possible. Goldman’s mantra of “long-term greedy” vanished into thin air as the game became about getting your check before the melon hit the pavement.

The market was no longer a rationally managed place to grow real, profitable businesses: It was a huge ocean of Someone Else’s Money where bankers hauled in vast sums through whatever means necessary and tried to convert that money into bonuses and payouts as quickly as possible. If you laddered and spun 50 Internet IPOs that went bust within a year, so what? By the time the Securities and Exchange Commission got around to fining your firm $110 million, the yacht you bought with your IPO bonuses was already six years old. Besides, you were probably out of Goldman by then, running the U.S. Treasury or maybe the state of New Jersey. (One of the truly comic moments in the history of America’s recent financial collapse came when Gov. Jon Corzine of New Jersey, who ran Goldman from 1994 to 1999 and left with $320 million in IPO-fattened stock, insisted in 2002 that “I’ve never even heard the term ‘laddering’ before.”)

For a bank that paid out $7 billion a year in salaries, $110 million fines issued half a decade late were something far less than a deterrent – they were a joke. Once the Internet bubble burst, Goldman had no incentive to reassess its new, profit-driven strategy; it just searched around for another bubble to inflate. As it turns out, it had one ready, thanks in large part to Rubin.

Goldman’s role in the sweeping disaster that was the housing bubble is not hard to trace. Here again, the basic trick was a decline in underwriting standards, although in this case the standards weren’t in IPOs but in mortgages. By now almost everyone knows that for decades mortgage dealers insisted that home buyers be able to produce a down payment of 10 percent or more, show a steady income and good credit rating, and possess a real first and last name. Then, at the dawn of the new millennium, they suddenly threw all that poo poo out the window and started writing mortgages on the backs of napkins to cocktail waitresses and ex-cons carrying five bucks and a Snickers bar.

None of that would have been possible without investment bankers like Goldman, who created vehicles to package those lovely mortgages and sell them en masse to unsuspecting insurance companies and pension funds. This created a mass market for toxic debt that would never have existed before; in the old days, no bank would have wanted to keep some addict ex-con’s mortgage on its books, knowing how likely it was to fail. You can’t write these mortgages, in other words, unless you can sell them to someone who doesn’t know what they are.

Goldman used two methods to hide the mess they were selling. First, they bundled hundreds of different mortgages into instruments called Collateralized Debt Obligations. Then they sold investors on the idea that, because a bunch of those mortgages would turn out to be OK, there was no reason to worry so much about the lovely ones: The CDO, as a whole, was sound. Thus, junk-rated mortgages were turned into AAA-rated investments. Second, to hedge its own bets, Goldman got companies like AIG to provide insurance – known as credit-default swaps – on the CDOs. The swaps were essentially a racetrack bet between AIG and Goldman: Goldman is betting the ex-cons will default, AIG is betting they won’t.

There was only one problem with the deals: All of the wheeling and dealing represented exactly the kind of dangerous speculation that federal regulators are supposed to rein in. Derivatives like CDOs and credit swaps had already caused a series of serious financial calamities: Procter & Gamble and Gibson Greetings both lost fortunes, and Orange County, California, was forced to default in 1994. A report that year by the Government Accountability Office recommended that such financial instruments be tightly regulated – and in 1998, the head of the Commodity Futures Trading Commission, a woman named Brooksley Born, agreed. That May, she circulated a letter to business leaders and the Clinton administration suggesting that banks be required to provide greater disclosure in derivatives trades, and maintain reserves to cushion against losses.

More regulation wasn’t exactly what Goldman had in mind. “The banks go crazy – they want it stopped,” says Michael Greenberger, who worked for Born as director of trading and markets at the CFTC and is now a law professor at the University of Maryland. “Greenspan, Summers, Rubin and [SEC chief Arthur] Levitt want it stopped.”

Clinton’s reigning economic foursome – “especially Rubin,” according to Greenberger – called Born in for a meeting and pleaded their case. She refused to back down, however, and continued to push for more regulation of the derivatives. Then, in June 1998, Rubin went public to denounce her move, eventually recommending that Congress strip the CFTC of its regulatory authority. In 2000, on its last day in session, Congress passed the now-notorious Commodity Futures Modernization Act, which had been inserted into an 1l,000-page spending bill at the last minute, with almost no debate on the floor of the Senate. Banks were now free to trade default swaps with impunity.

But the story didn’t end there. AIG, a major purveyor of default swaps, approached the New York State Insurance Department in 2000 and asked whether default swaps would be regulated as insurance. At the time, the office was run by one Neil Levin, a former Goldman vice president, who decided against regulating the swaps. Now freed to underwrite as many housing-based securities and buy as much credit-default protection as it wanted, Goldman went berserk with lending lust. By the peak of the housing boom in 2006, Goldman was underwriting $76.5 billion worth of mortgage-backed securities – a third of which were subprime – much of it to institutional investors like pensions and insurance companies. And in these massive issues of real estate were vast swamps of crap.

Take one $494 million issue that year, GSAMP Trust 2006-S3. Many of the mortgages belonged to second-mortgage borrowers, and the average equity they had in their homes was 0.71 percent. Moreover, 58 percent of the loans included little or no documentation – no names of the borrowers, no addresses of the homes, just zip codes. Yet both of the major ratings agencies, Moody’s and Standard & Poor’s, rated 93 percent of the issue as investment grade. Moody’s projected that less than 10 percent of the loans would default. In reality, 18 percent of the mortgages were in default within 18 months.

Not that Goldman was personally at any risk. The bank might be taking all these hideous, completely irresponsible mortgages from beneath-gangster-status firms like Countrywide and selling them off to municipalities and pensioners – old people, for God’s sake – pretending the whole time that it wasn’t grade-D horseshit. But even as it was doing so, it was taking short positions in the same market, in essence betting against the same crap it was selling. Even worse, Goldman bragged about it in public. “The mortgage sector continues to be challenged,” David Viniar, the bank’s chief financial officer, boasted in 2007. “As a result, we took significant markdowns on our long inventory positions …. However, our risk bias in that market was to be short, and that net short position was profitable.” In other words, the mortgages it was selling were for chumps. The real money was in betting against those same mortgages.

“That’s how audacious these assholes are,” says one hedge-fund manager. “At least with other banks, you could say that they were just dumb – they believed what they were selling, and it blew them up. Goldman knew what it was doing.” I ask the manager how it could be that selling something to customers that you’re actually betting against – particularly when you know more about the weaknesses of those products than the customer – doesn’t amount to securities fraud.

“It’s exactly securities fraud,” he says. “It’s the heart of securities fraud.”

Eventually, lots of aggrieved investors agreed. In a virtual repeat of the Internet IPO craze, Goldman was hit with a wave of lawsuits after the collapse of the housing bubble, many of which accused the bank of withholding pertinent information about the quality of the mortgages it issued. New York state regulators are suing Goldman and 25 other underwriters for selling bundles of crappy Countrywide mortgages to city and state pension funds, which lost as much as $100 million in the investments. Massachusetts also investigated Goldman for similar misdeeds, acting on behalf of 714 mortgage holders who got stuck ho1ding predatory loans. But once again, Goldman got off virtually scot-free, staving off prosecution by agreeing to pay a paltry $60 million – about what the bank’s CDO division made in a day and a half during the real estate boom.

The effects of the housing bubble are well known – it led more or less directly to the collapse of Bear Stearns, Lehman Brothers and AIG, whose toxic portfolio of credit swaps was in significant part composed of the insurance that banks like Goldman bought against their own housing portfolios. In fact, at least $13 billion of the taxpayer money given to AIG in the bailout ultimately went to Goldman, meaning that the bank made out on the housing bubble twice: It hosed the investors who bought their horseshit CDOs by betting against its own crappy product, then it turned around and hosed the taxpayer by making him payoff those same bets.

And once again, while the world was crashing down all around the bank, Goldman made sure it was doing just fine in the compensation department. In 2006, the firm’s payroll jumped to $16.5 billion – an average of $622,000 per employee. As a Goldman spokesman explained, “We work very hard here.”

But the best was yet to come. While the collapse of the housing bubble sent most of the financial world fleeing for the exits, or to jail, Goldman boldly doubled down – and almost single-handedly created yet another bubble, one the world still barely knows the firm had anything to do with.

By the beginning of 2008, the financial world was in turmoil. Wall Street had spent the past two and a half decades producing one scandal after another, which didn’t leave much to sell that wasn’t tainted. The terms junk bond, IPO, subprime mortgage and other once-hot financial fare were now firmly associated in the public’s mind with scams; the terms credit swaps and CDOs were about to join them. The credit markets were in crisis, and the mantra that had sustained the fantasy economy throughout the Bush years – the notion that housing prices never go down – was now a fully exploded myth, leaving the Street clamoring for a new bullshit paradigm to sling.

Where to go? With the public reluctant to put money in anything that felt like a paper investment, the Street quietly moved the casino to the physical-commodities market – stuff you could touch: corn, coffee, cocoa, wheat and, above all, energy commodities, especially oil. In conjunction with a decline in the dollar, the credit crunch and the housing crash caused a “flight to commodities.” Oil futures in particular skyrocketed, as the price of a single barrel went from around $60 in the middle of 2007 to a high of $147 in the summer of 2008.

That summer, as the presidential campaign heated up, the accepted explanation for why gasoline had hit $4.11 a gallon was that there was a problem with the world oil supply. In a classic example of how Republicans and Democrats respond to crises by engaging in fierce exchanges of moronic irrelevancies, John McCain insisted that ending the moratorium on offshore drilling would be “very helpful in the short term,” while Barack Obama in typical liberal-arts yuppie style argued that federal investment in hybrid cars was the way out.


But it was all a lie. While the global supply of oil will eventually dry up, the short-term flow has actually been increasing. In the six months before prices spiked, according to the U.S. Energy Information Administration, the world oil supply rose from 85.24 million barrels a day to 85.72 million. Over the same period, world oil demand dropped from 86.82 million barrels a day to 86.07 million. Not only was the short-term supply of oil rising, the demand for it was falling – which, in classic economic terms, should have brought prices at the pump down.

So what caused the huge spike in oil prices? Take a wild guess. Obviously Goldman had help – there were other players in the physical-commodities market – but the root cause had almost everything to do with the behavior of a few powerful actors determined to turn the once-solid market into a speculative casino. Goldman did it by persuading pension funds and other large institutional investors to invest in oil futures – agreeing to buy oil at a certain price on a fixed date. The push transformed oil from a physical commodity, rigidly subject to supply and demand, into something to bet on, like a stock. Between 2003 and 2008, the amount of speculative money in commodities grew from $13 billion to $317 billion, an increase of 2,300 percent. By 2008, a barrel of oil was traded 27 times, on average, before it was actually delivered and consumed.

As is so often the case, there had been a Depression-era law in place designed specifically to prevent this sort of thing. The commodities market was designed in large part to help farmers: A grower concerned about future price drops could enter into a contract to sell his corn at a certain price for delivery later on, which made him worry less about building up stores of his crop. When no one was buying corn, the farmer could sell to a middleman known as a “traditional speculator,” who would store the grain and sell it later, when demand returned. That way, someone was always there to buy from the farmer, even when the market temporarily had no need for his crops.

In 1936, however, Congress recognized that there should never be more speculators in the market than real producers and consumers. If that happened, prices would be affected by something other than supply and demand, and price manipulations would ensue. A new law empowered the Commodity Futures Trading Commission – the very same body that would later try and fail to regulate credit swaps – to place limits on speculative trades in commodities. As a result of the CFTC’s oversight, peace and harmony reigned in the commodities markets for more than 50 years.

All that changed in 1991 when, unbeknownst to almost everyone in the world, a Goldman-owned commodities-trading subsidiary called J. Aron wrote to the CFTC and made an unusual argument. Farmers with big stores of corn, Goldman argued, weren’t the only ones who needed to hedge their risk against future price drops – Wall Street dealers who made big bets on oil prices also needed to hedge their risk, because, well, they stood to lose a lot too.

This was complete and utter crap – the 1936 law, remember, was specifically designed to maintain distinctions between people who were buying and selling real tangible stuff and people who were trading in paper alone. But the CFTC, amazingly, bought Goldman’s argument. It issued the bank a free pass, called the “Bona Fide Hedging” exemption, allowing Goldman’s subsidiary to call itself a physical hedger and escape virtually all limits placed on speculators. In the years that followed, the commission would quietly issue 14 similar exemptions to other companies.

Now Goldman and other banks were free to drive more investors into the commodities markets, enabling speculators to place increasingly big bets. That 1991 letter from Goldman more or less directly led to the oil bubble in 2008, when the number of speculators in the market – driven there by fear of the falling dollar and the housing crash – finally overwhelmed the real physical suppliers and consumers. By 2008, at least three quarters of the activity on the commodity exchanges was speculative, according to a congressional staffer who studied the numbers – and that’s likely a conservative estimate. By the middle of last summer, despite rising supply and a drop in demand, we were paying $4 a gallon every time we pulled up to the pump.

What is even more amazing is that the letter to Goldman, along with most of the other trading exemptions, was handed out more or less in secret. “I was the head of the division of trading and markets, and Brooksley Born was the chair of the CFTC,” says Greenberger, “and neither of us knew this letter was out there.” In fact, the letters only came to light by accident. Last year, a staffer for the House Energy and Commerce Committee just happened to be at a briefing when officials from the CFTC made an offhand reference to the exemptions.

“1 had been invited to a briefing the commission was holding on energy,” the staffer recounts. “And suddenly in the middle of it, they start saying, ‘Yeah, we’ve been issuing these letters for years now.’ I raised my hand and said, ‘Really? You issued a letter? Can I see it?’ And they were like, ‘Duh, duh.’ So we went back and forth, and finally they said, ‘We have to clear it with Goldman Sachs.’ I’m like, ‘What do you mean, you
have to clear it with Goldman Sachs?’”

The CFTC cited a rule that prohibited it from releasing any information about a company’s current position in the market. But the staffer’s request was about a letter that had been issued 17 years earlier. It no longer had anything to do with Goldman’s current position. What’s more, Section 7 of the 1936 commodities law gives Congress the right to any information it wants from the commission. Still, in a classic example of how complete Goldman’s capture of government is, the CFTC waited until it got clearance from the bank before it turned the letter over.

Armed with the semi-secret government exemption, Goldman had become the chief designer of a giant commodities betting parlor. Its Goldman Sachs Commodities Index – which tracks the prices of 24 major commodities but is overwhelmingly weighted toward oil – became the place where pension funds and insurance companies and other institutional investors could make massive long-term bets on commodity prices. Which was all well and good, except for a couple of things. One was that index speculators are mostly “long only” bettors, who seldom if ever take short positions – meaning they only bet on prices to rise. While this kind of behavior is good for a stock market, it’s terrible for commodities, because it continually forces prices upward. “If index speculators took short positions as well as long ones, you’d see them pushing prices both up and down,” says Michael Masters, a hedge-fund manager who has helped expose the role of investment banks in the manipulation of oil prices. “But they only push prices in one direction: up.”

Complicating matters even further was the fact that Goldman itself was cheerleading with all its might for an increase in oil prices. In the beginning of 2008, Arjun Murti, a Goldman analyst, hailed as an “oracle of oil” by The New York Times, predicted a “super spike” in oil prices, forecasting a rise to $200 a barrel. At the time Goldman was heavily invested in oil through its commodities-trading subsidiary, J. Aron; it also owned a stake in a major oil refinery in Kansas, where it warehoused the crude it bought and sold. Even though the supply of oil was keeping pace with demand, Murti continually warned of disruptions to the world oil supply, going so far as to broadcast the fact that he owned two hybrid cars. High prices, the bank insisted, were somehow the fault of the piggish American consumer; in 2005, Goldman analysts insisted that we wouldn’t know when oil prices would fall until we knew “when American consumers will stop buying gas-guzzling sport utility vehicles and instead seek fuel-efficient alternatives.”

But it wasn’t the consumption of real oil that was driving up prices – it was the trade in paper oil. By the summer of2008, in fact, commodities speculators had bought and stockpiled enough oil futures to fill 1.1 billion barrels of crude, which meant that speculators owned more future oil on paper than there was real, physical oil stored in all of the country’s commercial storage tanks and the Strategic Petroleum Reserve combined. It was a repeat of both the Internet craze and the housing bubble, when Wall Street jacked up present-day profits by selling suckers shares of a fictional fantasy future of endlessly rising prices.

In what was by now a painfully familiar pattern, the oil-commodities melon hit the pavement hard in the summer of 2008, causing a massive loss of wealth; crude prices plunged from $147 to $33. Once again the big losers were ordinary people. The pensioners whose funds invested in this crap got massacred: CalPERS, the California Public Employees’ Retirement System, had $1.1 billion in commodities when the crash came. And the damage didn’t just come from oil. Soaring food prices driven by the commodities bubble led to catastrophes across the planet, forcing an estimated 100 million people into hunger and sparking food riots throughout the Third World.

Now oil prices are rising again: They shot up 20 percent in the month of May and have nearly doubled so far this year. Once again, the problem is not supply or demand. “The highest supply of oil in the last 20 years is now,” says Rep. Bart Stupak, a Democrat from Michigan who serves on the House energy committee. “Demand is at a 10-year low. And yet prices are up.”

Asked why politicians continue to harp on things like drilling or hybrid cars, when supply and demand have nothing to do with the high prices, Stupak shakes his head. “I think they just don’t understand the problem very well,” he says. “You can’t explain it in 30 seconds, so politicians ignore it.”

After the oil bubble collapsed last fall, there was no new bubble to keep things humming – this time, the money seems to be really gone, like worldwide-depression gone. So the financial safari has moved elsewhere, and the big game in the hunt has become the only remaining pool of dumb, unguarded capital left to feed upon: taxpayer money. Here, in the biggest bailout in history, is where Goldman Sachs really started to flex its muscle.

It began in September of last year, when then-Treasury secretary Paulson made a momentous series of decisions. Although he had already engineered a rescue of Bear Stearns a few months before and helped bail out quasi-private lenders Fannie Mae and Freddie Mac, Paulson elected to let Lehman Brothers – one of Goldman’s last real competitors – collapse without intervention. (”Goldman’s superhero status was left intact,” says market analyst Eric Salzman, “and an investment-banking competitor, Lehman, goes away.”) The very next day, Paulson greenlighted a massive, $85 billion bailout of AIG, which promptly turned around and repaid $13 billion it owed to Goldman. Thanks to the rescue effort, the bank ended up getting paid in full for its bad bets: By contrast, retired auto workers awaiting the Chrysler bailout will be lucky to receive 50 cents for every dollar they are owed.

Immediately after the AIG bailout, Paulson announced his federal bailout for the financial industry, a $700 billion plan called the Troubled Asset Relief Program, and put a heretofore unknown 35-year-old Goldman banker named Neel Kashkari in charge of administering the funds. In order to qualify for bailout monies, Goldman announced that it would convert from an investment bank to a bankholding company, a move that allows it access not only to $10 billion in TARP funds, but to a whole galaxy of less conspicuous, publicly backed funding – most notably, lending from the discount window of the Federal Reserve. By the end of March, the Fed will have lent or guaranteed at least $8.7 trillion under a series of new bailout programs – and thanks to an obscure law allowing the Fed to block most congressional audits, both the amounts and the recipients of the monies remain almost entirely secret.

Converting to a bank-holding company has other benefits as well: Goldman’s primary supervisor is now the New York Fed, whose chairman at the time of its announcement was Stephen Friedman, a former co-chairman of Goldman Sachs. Friedman was technically in violation of Federal Reserve policy by remaining on the board of Goldman even as he was supposedly regulating the bank; in order to rectify the problem, he applied for, and got, a conflict-of-interest waiver from the government. Friedman was also supposed to divest himself of his Goldman stock after Goldman became a bank-holding company, but thanks to the waiver, he was allowed to go out and buy 52,000 additional shares in his old bank, leaving him $3 million richer. Friedman stepped down in May, but the man now in charge of supervising Goldman – New York Fed president William Dudley – is yet another former Goldmanite.

The collective message of all this – the AIG bailout, the swift approval for its bank-holding conversion, the TARP funds – is that when it comes to Goldman Sachs, there isn’t a free market at all. The government might let other players on the market die, but it simply will not allow Goldman to fail under any circumstances. Its edge in the market has suddenly become an open declaration of supreme privilege. “In the past it was an implicit advantage,” says Simon Johnson, an economics professor at MIT and former official at the International Monetary Fund, who compares the bailout to the crony capitalism he has seen in Third World countries. “Now it’s more of an explicit advantage.”

Once the bailouts were in place, Goldman went right back to business as usual, dreaming up impossibly convoluted schemes to pick the American carcass clean of its loose capital. One of its first moves in the post-bailout era was to quietly push forward the calendar it uses to report its earnings, essentially wiping December 2008 – with its $1.3 billion in pretax losses – off the books. At the same time, the bank announced a highly suspicious $1.8 billion profit for the first quarter of 2009 – which apparently included a large chunk of money funneled to it by taxpayers via the AIG bailout. “They cooked those first-quarter results six ways from Sunday,” says one hedge-fund manager. “They hid the losses in the orphan month and called the bailout money profit.”

Two more numbers stand out from that stunning first-quarter turnaround. The bank paid out an astonishing $4.7 billion in bonuses and compensation in the first three months of this year, an 18 percent increase over the first quarter of 2008. It also raised $5 billion by issuing new shares almost immediately after releasing its first-quarter results. Taken together, the numbers show that Goldman essentially borrowed a $5 billion salary payout for its executives in the middle of the global economic crisis it helped cause, using half-baked accounting to reel in investors, just months after receiving billions in a taxpayer bailout.

Even more amazing, Goldman did it all right before the government announced the results of its new “stress test” for banks seeking to repay TARP money – suggesting that Goldman knew exactly what was coming. The government was trying to carefully orchestrate the repayments in an effort to prevent further trouble at banks that couldn’t pay back the money right away. But Goldman blew off those concerns, brazenly flaunting its insider status. “They seemed to know everything that they needed to do before the stress test came out, unlike everyone else, who had to wait until after,” says Michael Hecht, a managing director of JMP Securities. “The government came out and said, ‘To pay back TARP, you have to issue debt of at least five years that is not insured by FDIC – which Goldman Sachs had already done, a week or two before.”

And here’s the real punch line. After playing an intimate role in four historic bubble catastrophes, after helping $5 trillion in wealth disappear from the NASDAQ, after pawning off thousands of toxic mortgages on pensioners and cities, after helping to drive the price of gas up to $4 a gallon and to push 100 million people around the world into hunger, after securing tens of billions of taxpayer dollars through a series of bailouts overseen by its former CEO, what did Goldman Sachs give back to the people of the United States in 2008?

Fourteen million dollars.

That is what the firm paid in taxes in 2008, an effective tax rate of exactly one, read it, one percent. The bank paid out $10 billion in compensation and benefits that same year and made a profit of more than $2 billion – yet it paid the Treasury less than a third of what it forked over to CEO Lloyd Blankfein, who made $42.9 million last year.

How is this possible? According to Goldman’s annual report, the low taxes are due in large part to changes in the bank’s “geographic earnings mix.” In other words, the bank moved its money around so that most of its earnings took place in foreign countries with low tax rates. Thanks to our completely hosed corporate tax system, companies like Goldman can ship their revenues offshore and defer taxes on those revenues indefinitely, even while they claim deductions upfront on that same untaxed income. This is why any corporation with an at least occasionally sober accountant can usually find a way to zero out its taxes. A GAO report, in fact, found that between 1998 and 2005, roughly two-thirds of all corporations operating in the U.S. paid no taxes at all.

This should be a pitchfork-level outrage – but somehow, when Goldman released its post-bailout tax profile, hardly anyone said a word. One of the few to remark on the obscenity was Rep. Lloyd Doggett, a Democrat from Texas who serves on the House Ways and Means Committee. “With the right hand out begging for bailout money,” he said, “the left is hiding it offshore.”

Fast-Forward to today. It’s early June in Washington, D.C. Barack Obama, a popular young politician whose leading private campaign donor was an investment bank called Goldman Sachs – its employees paid some $981,000 to his campaign – sits in the White House. Having seamlessly navigated the political minefield of the bailout era, Goldman is once again back to its old business, scouting out loopholes in a new government-created market with the aid of a new set of alumni occupying key government jobs.


Gone are Hank Paulson and Neel Kashkari; in their place are Treasury chief of staff Mark Patterson and CFTC chief Gary Gensler, both former Goldmanites. (Gensler was the firm’s co-head of finance) And instead of credit derivatives or oil futures or mortgage-backed CDOs, the new game in town, the next bubble, is in carbon credits – a booming trillion-dollar market that barely even exists yet, but will if the Democratic Party that it gave $4,452,585 to in the last election manages to push into existence a groundbreaking new commodities bubble, disguised as an “environmental plan,” called cap-and-trade.

The new carbon-credit market is a virtual repeat of the commodities-market casino that’s been kind to Goldman, except it has one delicious new wrinkle: If the plan goes forward as expected, the rise in prices will be government-mandated. Goldman won’t even have to rig the game. It will be rigged in advance.

Here’s how it works: If the bill passes; there will be limits for coal plants, utilities, natural-gas distributors and numerous other industries on the amount of carbon emissions (a.k.a. greenhouse gases) they can produce per year. If the companies go over their allotment, they will be able to buy “allocations” or credits from other companies that have managed to produce fewer emissions. President Obama conservatively estimates that about $646 billions worth of carbon credits will be auctioned in the first seven years; one of his top economic aides speculates that the real number might be twice or even three times that amount.

The feature of this plan that has special appeal to speculators is that the “cap” on carbon will be continually lowered by the government, which means that carbon credits will become more and more scarce with each passing year. Which means that this is a brand-new commodities market where the main commodity to be traded is guaranteed to rise in price over time. The volume of this new market will be upwards of a trillion dollars annually; for comparison’s sake, the annual combined revenues of an electricity suppliers in the U.S. total $320 billion.

Goldman wants this bill. The plan is (1) to get in on the ground floor of paradigm-shifting legislation, (2) make sure that they’re the profit-making slice of that paradigm and (3) make sure the slice is a big slice. Goldman started pushing hard for cap-and-trade long ago, but things really ramped up last year when the firm spent $3.5 million to lobby climate issues. (One of their lobbyists at the time was none other than Patterson, now Treasury chief of staff.) Back in 2005, when Hank Paulson was chief of Goldman, he personally helped author the bank’s environmental policy, a document that contains some surprising elements for a firm that in all other areas has been consistently opposed to any sort of government regulation. Paulson’s report argued that “voluntary action alone cannot solve the climate-change problem.” A few years later, the bank’s carbon chief, Ken Newcombe, insisted that cap-and-trade alone won’t be enough to fix the climate problem and called for further public investments in research and development. Which is convenient, considering that ‘Goldman made early investments in wind power (it bought a subsidiary called Horizon Wind Energy), renewable diesel (it is an investor in a firm called Changing World Technologies) and solar power (it partnered with BP Solar), exactly the kind of deals that will prosper if the government forces energy producers to use cleaner energy. As Paulson said at the time, “We’re not making those investments to lose money.”

The bank owns a 10 percent stake in the Chicago Climate Exchange, where the carbon credits will be traded. Moreover, Goldman owns a minority stake in Blue Source LLC, a Utah-based firm that sells carbon credits of the type that will be in great demand if the bill passes. Nobel Prize winner Al Gore, who is intimately involved with the planning of cap-and-trade, started up a company called Generation Investment Management with three former bigwigs from Goldman Sachs Asset Management, David Blood, Mark Ferguson and Peter Harris. Their business? Investing in carbon offsets. There’s also a $500 million Green Growth Fund set up by a Goldmanite to invest in green-tech … the list goes on and on. Goldman is ahead of the headlines again, just waiting for someone to make it rain in the right spot. Will this market be bigger than the energy-futures market?

“Oh, it’ll dwarf it,” says a former staffer on the House energy committee.

Well, you might say, who cares? If cap-and-trade succeeds, won’t we all be saved from the catastrophe of global warming? Maybe – but cap-and-trade, as envisioned by Goldman, is really just a carbon tax structured so that private interests collect the revenues. Instead of simply imposing a fixed government levy on carbon pollution and forcing unclean energy producers to pay for the mess they make, cap-and trade will allow a small tribe of greedy-as-hell Wall Street swine to turn yet another commodities market into a private tax-collection scheme. This is worse than the bailout: It allows the bank to seize taxpayer money before it’s even collected.

“If it’s going to be a tax, I would prefer that Washington set the tax and collect it,” says Michael Masters, the hedge fund director who spoke out against oil-futures speculation. “But we’re saying that Wall Street can set the tax, and Wall Street can collect the tax. That’s the last thing in the world I want. It’s just asinine.”

Cap-and-trade is going to happen. Or, if it doesn’t, something like it will. The moral is the same as for all the other bubbles that Goldman helped create, from 1929 to 2009. In almost every case, the very same bank that behaved recklessly for years, weighing down the system with toxic loans and predatory debt, and accomplishing nothing but massive bonuses for a few bosses, has been rewarded with mountains of virtually free money and government guarantees – while the actual victims in this mess, ordinary taxpayers, are the ones paying for it.

It’s not always easy to accept the reality of what we now routinely allow these people to get away with; there’s a kind of collective denial that kicks in when a country goes through what America has gone through lately, when a people lose as much prestige and status as we have in the past few years. You can’t really register the fact that you’re no longer a citizen of a thriving first-world democracy, that you’re no longer above getting robbed in broad daylight, because like an amputee, you can still sort of feel things that are no longer there.

But this is it. This is the world we live in now. And in this world, some of us have to play by the rules, while others get a note from the principal excusing them from homework till the end of time, plus 10 billion free dollars in a paper bag to buy lunch. It’s a gangster state, running on gangster economics, and even prices can’t be trusted anymore; there are hidden taxes in every buck you pay. And maybe we can’t stop it, but we should at least know where it’s all going.