It was a comparison that seemed at first too histrionic to enjoy much of a shelf life: Rolling Stone reporter Matt Taibbi called Goldman Sachs
The image has endured, however; nearly a month after it first appeared, the
Exhibit A: Goldmans decision to pay the Treasury Departments full asking price of $1.1 billion for its Tarp warrants last week, believed to be largely
Warren, who was testifying before the Committee that day in her capacity as the chairman of the Tarp Congressional Oversight Panel, said Goldmans agreement to pay full price for its warrants proves that oversight works, giving credit to her committee for having called out the first few banks warrant purchase prices as too low. I agree with you, Bachus said later, praising Warrens panel. Oversight worked.
But the image of a giant bloodsucking squid may have had more impact than any oversight and may continue to do so. As long as the image stays intact in the media (it was repeated again today in a column by Michael Lewis
Animal metaphors as a policy lever are nothing new in the banking world. The National Association of Realtors helped fuel its campaign several years ago against bankers efforts to win real estate brokerage powers by showing an image of an Octopus reaching out to grab peoples homes. The group even handed out buttons and magnets with the Octopus, labeled The Big Grab. Its worth noting that NAR ultimately won the fight.
Perhaps policymakers should take a hint. Could the White House get away, for instance, with calling any mortgage servicer who refuses to modify enough loans a raging wildebeest of doom, trampling the most delicate and slow-growing of grassesthe U.S. housing market? Animal nightmares may be all the leverage they have left.