So Wonks Anonymous does not want to wait for the SF Comical to give his readers a picture of just what universal genius Meg Whitman, former CEO of E Bay and current high bidder for the office of Governor of California, is up to. Links to the excellent story by Lance Williams and Carla Marinucci will be posted on Tuesday. In the meantime the reader will get Wonks Anonymous retelling:

It all started with IPOs. That would be initial public offerings - the first sale of the stock of a new corporation to "the public". This, like everything else in finance, is not quite as straightforward as it seems.

A naive person, say an economist who seldom left the sheltered world of the university, would thing that the IPO would be designed to raise as much money for the new corporation as possible. One might even use modern electronic auction technology to set the best price possible for the new shares.

That way the corporation would get lots of capital from investors which it to use to expand output, do research and so on to insure maximum future returns. Investors would then know that the money that they put into their stock was backed up by real investments that would bring real returns.

In the real world shares of an IPO are regularly priced at a deep discount. At the beginning of the day of the IPO lucky investors can pick up stock at par value of $1 per share that might trade at well over $100 a share by the end of the day.

Naturally the investment bank that runs this scam doesn't give out shares at the initial price to just anyone. Initial opportunities to purchase an IPO are carefully allocated to useful people. As the CEO of a growing tech start up Meg Whitman was potentially useful so Goldman Sachs steered plenty of IPO shares her way.

And that was the start of a wonderful relationship. Meg bought shares and flipped them at a profit and, when it came time for Meg's own company to go public, Goldman Sachs got the business with its fees and the opportunity to distribute shares at the initial discount to all sorts of useful people - Wonks Anonymous wonders how many of these useful people currently sit in the Senate.

Meg was so good that they even put her on the board of Goldman Sachs where she got $475,000. During her tenure she voted in favor of an obscene pay package for Hank Paulson, then CEO of Goldman Sachs.

Business as usual you say but Wonks Anonymous urges you to stop and think. Every paycheck you put hard earned dollars in your IRA which the financial sector supposedly uses to invest in useful and profitable projects. Except that for every $100 dollars that you put into a stock $99 dollars have been siphoned off to line the pockets of some well connected parasite who will use it to support a lavish lifestyle and maybe even run for governor.

Meg Whitman will have more than one occasion to direct business to Goldman Sachs as Governor of California and for Meg Whitman this is all just business as usual. Dot coms were literally swimming in money and massive graft was the order of the day. The State of California can hardly afford such corrupt excess.