"King of the Dung Hill" Goldman (Government) Sachs Rules & Rides Herd On Taxpayers

Having predicted the ultimate victory of Goldman Sachs over all adversity, today's headlines were anticlimactic. Nouriel Roubini's figures though hold the keys to the kingdom. And you thought "change" meant the taxpayers no longer being taken regularly to the cleaners? Get clued in by the Goldman Sachs CEO here (h/t to Mark Hoback, a phenomenal writer at The Aristocrats). (Emphasis marks added - Ed.)

"I wasn't worried for a minute," beamed Goldman Sachs CEO Lloyd C. Blankfein, pleased for his company to be back on the golden brick road and reporting a 3.44 billion dollar profit in it's second quarter, only one month after paying back 10 billion dollars in Federal aid. "I knew the American people would never let us down. There is this strong love/hate dynamic they have always had with their Corporate Overlords. They know that sometimes the pendulum swings one way, and sometimes the other, but as long as we own the pendulum, I don't guess it really makes a whole lot of difference, does it?" "Some folks would say that it's the luck of the draw that Goldman Sachs came out of the financial meltdown smelling like a rose, and to them I would say 'you're absolutely right'. I guess we were just lucky to have placed our previous CEO Hank Paulson in a position where he could have at least a little positive influence on our future as the Bush Treasury Secretary.

And boy, were we ever lucky that he was the guy in charge of nationalizing all those bad loans. That was extra special lucky, just like the fact that so many of our good friends like Timmy Geithner and Larry Summers are a part of President Obama's exciting new change administration. But of course you know the old saying - the more things change, the more they remain the same." "You know, a lot of people said that Goldman Sachs was too big to fail, and they were absolutely correct in their assertion. That's an enviable position to be in, and one we have no intention of giving up, and which, thankfully, nobody is trying to make us do so. That's why I'm willing to say that if this whole economy should go to hell, we'll still be right here, King of the Dung Hill." "Bottom line, though, is that we owe the American taxpayers a huge debt of gratitude, and we know it. That's why we're putting up a picture of them in our corporate headquarters. In the mens room, right above the urinals."

Nouriel Roubini in the Global Economonitor tells the current tale of two cities (or reality states). (Emphasis marks added - Ed.)

Recent data suggest that job market conditions are not improving in the United States and other advanced economies. In the U.S., the unemployment rate, currently at 9.5%, is poised to rise above 10% by the fall. It should peak at 11% some time in 2010 and remain well above 10% for a long time. The unemployment rate will peak above 10% in most other advanced economies (especially Europe and Japan), too, where social safety nets are broader and thus leading to less short term job losses and pain, but where the effects of the crisis on growth have been even more severe than the U.S.

But these raw figures on job losses, bad as they are, actually understate the weakness in world labor markets. If you include partially employed workers and discouraged workers who left the U.S. labor force, for example, the unemployment rate is already 16.5%; even temporary employment is sharply down. Monetary and fiscal stimulus in most countries has done little to slow down the rate of job losses as economies suffer from problems of insolvency, not just illiquidity, and as the fiscal stimulus programs are too small and not labor intensive enough. As a result, total labor income – the product of jobs times hours worked times average hourly wages – has fallen dramatically.

Moreover, many employers, seeking to “share the pain” of the recession and slow down the rate of layoffs, are now asking workers to accept cuts in both hours and hourly wages. Thus, the total effect of the recession on labor income of jobs, hours and wage reductions is much larger.

Other indicators are suggesting a protracted period of job losses and a persistently high unemployment rate even after the recession is over. The average duration of unemployment is not at an all time high in the U.S. Many manufacturing sectors are on a secular decline (autos, etc.) and employers are shedding jobs on a permanent basis; employment in the previously bubbly sectors (housing and related housing/real estate services, banking and financial services) is falling sharply and will not recover for a long time. The process of offshore outsourcing of both blue collar and white collar jobs is still in full swing. A lot of the job losses in the U.S. and in other advanced economies are structural rather than cyclical; many jobs will never come back.

Read the rest here.

And try not to weep.

Suzan __________________