Financial firms, we now know, directed vast quantities of capital into the construction of unsellable houses and empty shopping malls. They increa sed risk rather than reducing it, and concentrated risk rather than spreading it. In effect, the industry was selling dangerous patent medicine to gullible consumers.
Goldman’s role in the financialization of America was similar to that of other players, except for one thing: Goldman didn’t believe its own hype. Other banks invested heavily in the same toxic waste they were selling to the public at large. Goldman, famously, made a lot of money selling securities backed by subprime mortgages — then made a lot more money by selling mortgage-backed securities short, just before their value crashed. All of this was perfectly legal, but the net effect was that Goldman made profits by playing the rest of us for suckers.
My mother, who knows what she's talking about, has said that beyond this, Goldman, through strategic placement of insiders and "respected experts," has been placed in a position to benefit from every policy regarding the health of the economy in the last 4 years. Goldman profits, the American people suffer.
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