Federal authorities announced today they are investigating Goldman Sachs for attempting to corner the baby food market.
According to a complaint filed by the Federal Trade Commission (FTC), Goldman has been using shell companies to buy bulk shipments of baby food and keep it in warehouses until scarcity forces prices to rise. The Wall Street investment bank then sells back the baby food to retailers at a substantial profit.
An FTC analysis shows that the scheme has cost consumers $2.5 billion over the last five years, and that 5 percent of all money spent on brands like Gerber and Earth’s Best goes directly into Goldman’s pocket.
To avoid suspicion and the possibility of baby food makers increasing production, Goldman has been running its scheme intermittently and mostly in small to mid-size towns with locally-owned retailers.
“They’d create a shortage in one town, and before the distributor could respond with more supply they’d sweep in and make the re-sale,” explains an source inside the FTC. “Then it was on to the next town.”
Return of the Vampire Squid
One such town was Appleton, Wis., where in 2011 an acute shortage of baby food caused the local price to triple in a matter of weeks.
“I couldn’t find baby food for my two little boys anywhere in town,” says Susan Lander, a stay-at-home mother. “Finally Woodman’s began to stock some Gerbers, but it was $25 for a six pack.
“I had no choice but to pay up, even though we were short on money in those days. My husband had just lost his job in the mortgage industry.
“At the time I thought to myself that someone must be ‘pulling a Goldman’ on the local baby food market. It turns out it was Goldman itself! It’s really terrible. Those people have no shame.”
Legal experts say the FTC has a strong case, as the complaint contains ample documentation to prove fraudulent behavior. Goldman executives, however, seem to believe their firm will once again escape penalties for their unethical deeds.
“These motherf*****s at the FTC are about to find out who runs this motherf*****g town,” says Lloyd Blankfein, Goldman Sachs’ longtime CEO. “I got enough Senators in my back pocket to kill this bullshit investigation.
“So we’ve been buying up baby food and creating artificial shortages at supermarkets. So what? You think this is a game? You think this is a motherf*****g game? This is a business motherf****r! And my motto in business is do whatever it takes to make a profit.
“So some dumb bitch in some dumb f*****g state has to pay a little more each week in food costs. Cry me a f*****g river. I got shareholders and partners that need to get paid!”
Reaction to the scandal in Washington has been predictably circumscript, with only Sen. Elizabeth Warren (D-MA) condemning the report outright. Sen. Chuck Schumer (D-NY), however, says he disagrees with the FTC complaint and hopes the firm is cleared.
“On behalf of the entire federal government I would just like to apologize to Goldman Sachs for inconveniencing them with this frivolous investigation,” he said in a written statement.
“Clearly Wall Street must have a good reason for manipulating the baby food market. Let’s trust them on this. I’m sure they have our best interests at heart.”