Everything changes and nothing changes...

The 1950s in the US saw the arrival of a generation of writers keen to express their post war view of the world in a different way - the so-called "Beat Generation". Their essentials were spontaneity, open emotion and vivid descriptions of harsh world experiences. Their arrival on the scene was perhaps an understandable post-war reaction - the ugliness of the War had inspired a "throwing caution to the wind" liberal attitude amongst this group, that echoed the sentiment of a particular generation.

Lawrence Ferlinghetti is a less-talked-about member of this group - less talked about than the likes of Jack Kerouac or Allen Ginsberg - but it was he who founded the City Lights Bookstore in San Francisco that provided the meeting place for this new generation of writers. He was responsible for publishing Kerouac's "On the Road" in 1956, but was an accomplished poet in his own right. His most famous line in his poetry comes as the the first line of his 1950s collection "A Far Rockaway of the Heart".

"Everything changes and nothing changes".

The sentiment embodied by the line was reflective of many things - not least the fact that even though the Second World War had just ended, there was an on-going likelihood that people and things would not be changed by its awfulness, and that there was a sad inevitability to history repeating itself.

Ferlinghetti's line has an ongoing resonance, but perhaps has a particular relevance to the current point time. While we don't have another world war in our recent past, what we do have is the worst economic crisis in any of our lifetimes. US unemployment is rising by 500,000 per month and the hardship felt by many around the world will be here for many years as governments try to figure out how to pay back the huge debt burdens they now have. Yet, as the policy-makers try to address the circumstances that created this mess, it's hard not to get the sense that "everything changes and nothing changes."

That sense certainly sprang to mind this week as I contemplated the news that Goldman Sachs was "back on track", posting record profits for their second quarter. Current estimates suggest that the Goldman bonus pool come year end will allow the average Goldman payout (a not very mean, mean average) to be around $750,000 per employee. The financial world war may be past its worst, but in the corridors of Washington and this bastion of Wall Street, nothing seems to have changed.

While on the one hand I applaud the capacity of this organization and its people to print money, there is an aggravation that they don't deserve it. Their victories are by stealth and sleight of hand at least as much as through their undoubted intellectual capacity. As I have blogged before, there is a good chance that Goldman would have gone the way of Lehman had it not received close to $13bn worth of taxpayers funds as part of the AIG bailout. Where is the year end bonus for the weary US taxpayer - for it was their "investment" that enabled not just the survival of this bank, but it's ongoing money printing capacity?

In effect Goldman is just a big hedge-fund, with one great advantage over other hedge funds - an explicit backstop guarantee from the US taxpayer. As it turns out - the amount of risk that Goldman is taking currently is at the upper end of the spectrum of the past few years, while their funding costs because of the implicit US government backstop are being kept artificially low. Even though they have paid back their $10bn worth of TARP funds, they still have close to $30bn worth of government backed debt that they raised during the stressed period post Lehman's collapse. They are the ultimate example of the "heads I win, tales you lose" set-up, that is the curse of the western banking system. It's a structure that allows the likes of Goldman to bet the house in the knowledge that if the proverbial hits the fan, retirement to the Hamptons or St. Tropez won't be in jeopardy.

Not surprisingly, there has been an uptick in anti Goldman sentiment within the mainstream media this week on the back of their results. In a widely read article by Matt Taibi in Rolling Stone magazine he managed to take the vitriol out of the mainstream business press and down a more "popular" channel. One particular quote in his article seems to be doing the rounds: "The world's most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money." Aggressive perhaps, but it's a sentiment that is understandable.

Lamenting the fact that the likes of Goldman continue to win, while the less powerful continue to lose is as tiresome as it is unsurprising. Thankfully there are those who can turn something as serious as this into satire - which is ultimately probably a better form of conscientious objection than serious prose. Joe Wiesenthal's take hits that mark:

"In what some on Wall Street are calling the biggest blockbuster deal in the history of the financial sector, Goldman Sachs confirmed today that it was in talks to acquire the US Department of the Treasury. According to Goldman spokesperson, Jon Hestron, the merger between Goldman and the Treasury Department is "a good fit" because 'they're in the business of printing money and so are we.' The Goldman spokesman said that the merger would create efficiencies for both entities: "We already have so many employees and so much money flowing back and forth, this would just streamline things."

Mr. Hestron said that the only challenge facing Goldman in completing the merger "is trying to figure out which parts of the Treasury Department we don't already own." Goldman recently celebrated record earnings by roasting a suckling pig over a bonfire of hundred-dollar bills."

Everything changes and nothing changes.