MOUNT CLEMENS, Mich. — Hundreds of millions of times a day, thirsty Americans open a can of soda, beer or juice. And every time they do it, they pay a fraction of a penny more because of a shrewd maneuver by Goldman Sachs and other financial players that ultimately costs consumers billions of dollars. The story of how this works begins in 27 industrial warehouses in the Detroit area where a Goldman subsidiary stores customers’ aluminum. Each day, a fleet of trucks shuffles 1,500-pound bars of the metal among the warehouses. Two or three times a day, sometimes more, the drivers make the same circuits. They load in one warehouse. They unload in another. And then they do it again. This industrial dance has been choreographed by Goldman to exploit pricing regulations set up by an overseas commodities exchange, an investigation by The New York Times has found. The back-and-forth lengthens the storage time. And that adds many millions a year to the coffers of Goldman, which owns the warehouses and charges rent to store the metal. It also increases prices paid by manufacturers and consumers across the country.
It may have once upon a time been the era of “Too Big to Fail,” but now you can say hello to the era of “Manipulating Money to Make Money.” Goldman Sachs, once again proving that it’s employees are always the smartest guy in the room, has discovered a way to milk the economy while doing nothing but moving aluminum from warehouse to warehouse. The end consumer ultimately pays, of course, but Goldman wins because it’s staffed by people willing to exploit virtually any situation for profit. That the process of shuffling aluminum from warehouse to warehouse accomplishes nothing of value hardly needs explaining.
This sort of madness is why and how companies like Goldman Sachs brought the world economy to the brink of imploding upon itself. Playing “musical ingots” creates nothing of value, other than manipulating a regulatory system that in theory should be able to respond to and resolve this sort of capitalistic excess. Goldman Sachs will always find a way to maximize any regulatory environment for profit; they’ve found ways to get blood from a turnip, and even through it creates no value and does nothing for the economy, it adds billions to their bottom line. They’re sucking the life out of our economy, but as long as the money’s rolling in- and it is- who cares?
Remind me again why we bailed out companies like this?
