Matt Taibbi's much-discussed take down of Goldman Sachs in Rolling Stone has begun to get its share of criticism. Today, Joe Weisenthal at Clusterstock called the article "a joke." The most scathing critique -- and one of the most cogent -- comes from Megan McArdle at The Atlantic, who went so far as to compare Taibbi to Sarah Palin:
"What I think, sadly, is that Matt Taibbi is becoming the Sarah Palin of journalism. He seems to deliberately eschew understanding his subjects, because only corrupt, pointy-headed financial journalists who have been co-opted by the system do that. And Matt Taibbi is here to save you from those pointy headed elites."
One of McArdle's main arguments is that Taibbi misuses several financial terms, including collateralized debt obligations and credit default swaps. While the terms themselves still sound arcane to many, McArdle argues that they're crucial to understanding the financial crisis. In fact, she calls out Taibbi for a "lack of fundamental conceptual understanding."
One of the key points in Taibbi's piece is that Goldman Sachs was entirely unique in the way it engineered asset bubbles. At one point, Taibbi suggests Goldman could be prosecuted for securities fraud for its use of CDOs. For one, McArdle points out, other large prestigious financial institutions bought and sold shoddy assets like CDOs. Goldman's customers, she says, were "not little grannies who think a bond coupon is what you use to buy denture glue. They're institutions who could reasonably be expected to understand the risks."
McArdle, it should be pointed out, agrees with much of the sentiment in Taibbi's piece. McArdle's summary: "just because Taibbi, or Sarah Palin, has a legitimate grievance, it does not follow that everything they say is thereby legitimate."
Read Megan McArdle's full post on Matt Taibbi at The Atlantic.