Regarding the meaning of Goldman Sachs' record quarterly profits Paul Krugman writes:

First, it tells us that Goldman is very good at what it does. Unfortunately, what it does is bad for America.

Which The Economist notes:

What it does is bad for America. Not "some of what it does is bad for America". Not "the legal, profit-seeking behaviour of large investment banks may have some negative externalities that should be addressed by government regulators, in the following ways".

This is no way to have a policy discussion.

And yet, that is the way the discussion has gone today, leading to a follow-up addressing Ezra Klein, Matt Taibbi, and many others:

And yes, there are billions in profits, but that was the idea all along. As Matt Yglesias reminds us, the plan has long been to prop up banks with guarantees and limited assistance and let them earn their way to recapitalisation. Why? Because if failing banks were instead seized by the government, debtholders would have to be paid off to the tune of hundreds of billions of dollars to avoid a systemic meltdown. And Congress was simply not about to pony up hundreds of billions of dollars for yet another bank bail-out. So this is what happened instead. The government created the conditions under which banks might be highly profitable so that capital cushions could be rebuilt. Things appear to be working like a charm....

...journalists seem to be falling over themselves to out-pitchfork each other and pretending that the economy would be much, much better off if the country's large financial institutions weren't reporting profits and having success raising private capital. This makes no sense. Obviously, the interventions undertaken during the financial crisis were an ugly business. But they seem to be having the desired effect, and it's distracting and counterproductive for financial writers to keep acting surprised by the fact that this was how the government chose to address the situation.