The New York Times, it seems, can’t make up its mind on l’affaire Goldman and AIG. In the past week the Grey Lady has had dueling articles on whether Goldman would have or wouldn’t have lost billions if the giant insurer had failed back at the height of the financial crisis. On Saturday, Gretchen Morgenson wrote that newly released documents finally prove that had AIG failed Goldman would have lost at least $577 million, and quiet possibly as much as $2.5 billion. Here’s a quote from the article that sums it up:
“This illustrates that the Goldman version of reality is not entirely accurate,” said Christopher Whalen, managing director at Institutional Risk Analytics. “They did have exposure to A.I.G., and that is what drove their behavior in the bailout.”
Great. We can put the matter to rest once and for all. Goldman would have lost billions if AIG failed. Or wait. Maybe it wouldn’t have. Three days later, on Tuesday, the New York Times published another article by reporter Andrew Ross Sorkin, based on the same newly released documents no less, concluding exactly the opposite. Sorkin says definitively that had AIG failed Goldman wouldn’t have lost a cent, at least not directly. Here’s Sorkin:
A popular narrative has been constructed that government officials, led by Henry M. Paulson Jr., then Treasury secretary and the former chief executive of Goldman, and Timothy F. Geithner, then the president of the Federal Reserve Bank of New York, saved A.I.G. to save banks that were exposed to the insurance giant — and in particular Goldman.So what was Goldman’s exposure? According to some newly released documents, perhaps far less than its detractors maintain.
The problem is at least one of those detractors Sorkin is talking about is in fact the very newspaper he works for. I called both Sorkin and Morgenson, and both declined to comment on their articles and the Goldman and AIG issue. So here’s the question: When two top reporters can’t agree on Goldman’s role and motivation in the AIG bailout, what are we supposed to think?
