Senator Levin: Boy, that Timberwolf was one shitty deal.
Senate Permanent Subcommittee on Investigations (2010)
Caractacus Pott: And after that, Vulgaria became a free country.
Chitty Chitty Bang Bang (1968)
I have a weakness for watching special televised hearings conducted by the United States Senate. I don’t know exactly why. Maybe it’s because the choreography is so predictable regardless of the dancers. Maybe it’s because I like feeling in the thick of the great debates in American politics while just sitting in my robe eating donuts. Maybe it’s because I truly believe that these shows are the ne plus ultra of caricatured theatrical debate. Or, maybe, it’s because I continue to have hope that America can work out its problems right in front of my eyes.
Other than the news media, I don’t really know how many other people share my interest. After watching a good Senate hearing session, I am usually fired up enough to want to discuss it with somebody – really anybody. I usually discover, however, that most people I know either didn’t have the time to watch or just plain didn’t care to watch. Most of my follow-up Socratic dialogues, therefore, are simply my own loud rejoinders directed to the TV commentators.
The Goldman Sachs hearing was, to my mind, one of the best hearings of all time. It was delivered in three episodes, all of which occurred in one day (I understand that there is a lot of other work being conducted in the Senate). For whatever reason, the Senate wanted to get this over in a hurry – a slash, burn, and get out of there sort of thing. I believe that they had a good reason for this – namely, that the longer they questioned their witnesses, the more that they would show how little they knew about Wall Street and its machinations. They judged that just about perfect.
One of my favorite portions of the debate was a segment of questioning by Senator McCain. He went into a dramatic trance, slowed the meter of his voice down to where it just put you on the edge of your chair . . . waiting. It turned out to be a wait in vain. While he had some pointed questions that were building suspense about a particular deal, he didn’t have any idea what it was about when the Goldman witness interrupted his line of attack. McCain, suddenly realizing that he was on the verge of confirming that this line was just a brainless monologue, awkwardly stopped and yielded back to the Chairman. It was a pitiful performance from him, but we’ve seen it for years. Remember when he stopped his presidential campaign just before a scheduled debate to buzz into Washington in the midst of the financial meltdown to intervene in the crisis. When he arrived at the table, he just sat there like the lightest of the lightweights – without so much as a clue about what was happening and what needed to be done.
The attention-getting highlights though were provided by the Chairman of the Subcommittee, Carl Levin. Senate decorum suffered considerably when he repeatedly uttered the “sh” word – over and over again. I think it was entirely proper for him to use the word once, when he quoted the Goldman email the first time. But to repeat the word again and again? I am not sure if there has been a definitive count of the “sh” word that he used in the hearings, but some have said it was 13 times. I’ve also read 30 to 50. I listened to most of the hearing and would guess that the count is closer to 13, but it could have been 50. It was way too many times more than once.
There was another word that was repeated ad nauseum during the hearing. This one did not come from the Senatorial side but, instead, from the Goldman people. The word “risk” was used by Goldman so often that it got to the point where I though some smart Senator might call them on it. Over and over again Goldman interjected the word. They used it euphemistically in every conceivable way. None of their clients ever lost money – they just assumed too much risk. Goldman never made any money – they just reduced the risk of their negative positions. As a market maker, Goldman matched the risk that one client wanted to assume with the risk of another. And if one client’s risk could not be matched with another client, then Goldman themselves assumed the risk – that is, until they decided to offload the risk and “get closer to home.” You got the feeling from Goldman that it was a caretaker of risk for the world, simply caught as an arbitrageur in the midst of an extremely volatile and risky situation. One of Goldman’s main witnesses was, in fact, their head of their risk management department. Wow, did the Senate Committee person responsible for that witness selection get suckered in advance by Goldman’s risk rhetoric, or what?
All and all, Goldman used the word “risk” hundreds of times. How could anyone not notice this? Not one of the Senators did. They were too wrapped up in the scripts prepared by their staffs. There was not a thoughtful questioner in the entire bunch of Committee members. If any of them would have just listened carefully to something other than their own babble, they just might have been able to penetrate the digression and repetitive shield that Goldman had erected. But, not a chance. The hearing turned out to be a marathon – but a marathon that was unnecessarily run in circles.
Now – don’t you wish you would have watched?