Last year, when Hank Paulson told us all that the planet would explode if we didn't fork over a gazillion dollars to Wall Street immediately, the entire rationale not only for TARP but for the whole galaxy of lesser-known state crutches and safety nets quietly ushered in later on was that Wall Street, once rescued, would pump money back into the economy, create jobs, and initiate a widespread recovery. This, we were told, was the reason we needed to pilfer massive amounts of middle-class tax revenue and hand it over to the same guys who had just blown up the financial world. We'd save their asses, they'd save ours. That was the deal.

It turned out not to happen that way. We constructed this massive bailout infrastructure, and instead of pumping that free money back into the economy, the banks instead simply hoarded it and ate it on the spot, converting it into bonuses. So what does this Goldman profit number mean? This is the final evidence that the bailouts were a political decision to use the power of the state to redirect society's resources upward, on a grand scale. It was a selective rescue of a small group of chortling jerks who must be laughing all the way to the Hamptons every weekend about how they fleeced all of us at the very moment the game should have been up for all of them.

Taken altogether, what all of this means is that Goldman's profit announcement is a giant "fuck you" to the rest of the country. It is a statement of supreme privilege, an announcement that it feels no shame in taking subsidies and funneling them directly into their pockets, and moreover feels no fear of any public response. It knows that it's untouchable and it's not going to change its behavior for anyone. And it doesn't matter who knows it.

There are going to be some people who say that some of this stuff isn't government subsidy so much as ordinary government contracting. After all, do we criticize Boeing for making airplanes or Electric Boat for making submarines during a war? If we don't do that, then why should we be pissed about Goldman making a profit underwriting TARP repayment stock issuances, or Treasuries?

The difference is that Boeing and Electric Boat didn't start the war. But these guys on Wall Street causesd this crisis, and now they're raking in money on the infrastructure their buddies in government have devised to bail them out. It's a self-fulfilling cycle -- beautiful, in a way, but at the same time sort of uniquely disgusting. That they're going to get away with it is bad enough -- that they're getting praised for it, for being such smart guys, is damn near intolerable.

If Mr. Obama hopes to create a regulatory environment that stands for another six decades, he is going to have to do what Roosevelt did once upon a time. He is going to have make some bankers mad.

Does the Obama administration have the political will to break up financial giants? If the government's continuing transfer of wealth from ordinary taxpayers to Goldman partners is any indication, probably not.

It's taken some time but finally people from all over the political spectrum are looking up and noticing that the banner waving on the flagpole stands for Bailout Nation rather than the land of the free. And they're pissed.

Not everyone understands why they are pissed off. For instance, the Congressmen grilling Hank Paulson today are thoroughly confused. Some want to know why Paulson didn't fire Bank of America CEO Ken Lewis. Others want to know where Paulson got the temerity to threaten Lewis's job. Still others just seem to want a chance to vent.

But Matt Taibbi, whose famous Rolling Stone article proposed a somewhat absurd conspiracy theory that described Goldman as a bubble machine, has finally figured it out. What's wrong with Goldman isn't that is evil or even uniquely evil. What's wrong is that it is pocketing money that it is making, in part, because it isn't subject to market discipline. It is close to a pure play government arbitrage firm these days.

Do read the whole thing, if only to nod your head in grudging respect at how well Goldman Sachs scammed America... It's disgusting, and yet you have to respect how well the plan worked. It was a con job of epic proportions, leading to a visible theft and everyone knew who was behind it. And yet they got away scot-free anyway.