the town dandy / By Hank Sims

Varieties of Bankruptcy

(July 16, 2009)  Recommended reading: Yes, Matt Taibbi‘s post-gonzo style can sometimes grate, but his report in the current issue of Rolling Stone qualifies as a must-read here in Humboldt County. The article is entitled “The Great American Bubble Machine.” It’s a short history of the Wall Street firm Goldman Sachs, as told through the great American financial bubbles of the last 100 years.

Why should Humboldt County in particular read this story? Well, remember back before the Great Bust of 2008, when Goldman Sachs had expressed some interest in throwing dollars at the great daft dream of turning Humboldt Bay into a player on the international shipping stage, with port facilities and a new railroad line and all that? The firm was seeking long-term leases with both the Humboldt Bay Harbor, Recreation and Conservation District and the North Coast Railroad Authority in exchange for the mountains of cash that would be required to bring those agencies back from the dead. At the time, freight-boosters viewed Goldman’s interest as a proof sent from Heaven that there was a there there, after all. The main money men have to know something, right?

Alas, Wall Street fell down the toilet before the wedding could be consummated. But what Taibbi’s article persuasively argues is that for many years Goldman’s main business has been bilking pension funds and other investors out of their capital. It doesn’t matter what hole Goldman persuades its clients to pour money down — it gets a cut no matter where the money goes, or what happens to it after it is gone.

Viewed this way, the firm’s game of footsie with might be more profitably understood not as an infusion of confidence in the great Humboldt County dream of heavy freight and international trade, but simply as a mission to dig a new pit. Tech stocks, subprime mortgages — they only take you so far. The successful high finance firm is the one that continuously looks West, surveying terra incognita, bringing home whole new worlds to pillage.

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It was sad to receive that urgent and hastily composed e-mail from the Northcoast Environmental Center on Monday. It seems that the organization — a groundbreaking, history-making Humboldt County institution for nearly four decades — has just about run out of cash. The e-mail warned that it could disappear in a matter of weeks, if large amounts of funds are not raised, and quickly.

“Some folks might take for granted that we’ll always be here at the forefront of every environmental issue that matters on the North Coast …” the e-mail stated. “However, reversals over the last several years have completely depleted our reserves, and we’re at risk of becoming endangered unless our — and your — garden gets more financial ‘fertilizer.’”

There’s no doubt that extraordinary bad luck has plagued the organization for almost a decade. The e-mail alert runs down the NEC’s setbacks. It lost its building to fire in 2001, leaving behind a contaminated mess of a lot. The general downturn of the economy (see above), which hit donor-funded nonprofits especially hard. And probably most importantly, the sudden death of longtime NEC leader Tim McKay in 2006, at age 59.

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