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Posts Tagged ‘Matt Taibbi

Thomas Friedman Goes to the Wall

High priest of globalization lashes out against the enemies of progress

By

Republican National Convention made a joke of American democracy

In a pair of recent articles, “Web People Versus Wall People” and “How Clinton Could Knock Trump Out,” the Pulitzer Prize-winning columnist for the New York Times expresses deep concern that Clinton’s primary-season “lean” toward the politics of Bernie Sanders isn’t fake enough.

It’s been a whole week since the convention, and Hillary still hasn’t yet gone back to being the unabashed friend to big banks and staunch advocate for free trade and deregulation she just spent all of last year pretending she was not. This has Friedman freaked out.

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“Manufacturers just went abroad, to dictatorships and communist oligarchies, to make their products, forcing American workers to compete not just against foreign workers, but against their own history and legal systems.

People forget that when it comes to labor relations, America had to be dragged, kicking and screaming, in the direction of the civilized world.

Attempts to ban child labor in this country failed repeatedly, and we didn’t actually pass a federal child labor law that stuck until 1938.

Airlines in America were still firing flight attendants for getting married through the mid-eighties.”

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Thomas fears Hillary is leaning in the direction of socialism, “the greatest system ever invented for making people equally poor,” as opposed to staying true to the capitalist ethos of her husband, which would “grow our pie bigger and faster”:

I get that she had to lean toward Sanders and his voters to win the nomination; their concerns with fairness and inequality are honorable. But those concerns can be addressed only with economic growth…

(Ever economic growth is no longer sustainable: Get out of this mid set and start producing what can be sustained)

Friedman is conceding that inequality and unfairness are legitimate concerns. He’s just saying that now that the people most concerned about these issues have been beaten at the polls, we can safely go back to ignoring them and letting the beneficiaries of inequality worry about how and when to fix it.

This “let’s grow our pie bigger and faster” column (does this make more or less sense than George Bush’s famous “we should make the pie higher” idea?) comes on the heels of last week’s “Webs and Walls” column on the same theme.

This remarkable article divided the world into two groups of people. Roughly speaking, Friedman is talking about people who embrace globalization (“Web people”) versus people who reject it (“Wall people”).

This is already a confusing metaphor because the campaigns of the two candidates Friedman identifies as riling up the “Wall” people, Donald Trump and Bernie Sanders, were heavily reliant on Internet media, i.e. the Web.

Meanwhile, Friedman’s definition of “web people” describes individuals who:

Instinctively understand that Democrats and Republicans both built their platforms largely in response to the Industrial Revolution, the New Deal and the Cold War, but that today, a 21st-century party needs to build its platform in response to the accelerations in technology, globalization and climate change, which are the forces transforming the workplace, geopolitics and the very planet.

That seems like a very specific and weird belief system, probably unique to writers for the New York Times named Thomas Friedman.

Friedman never explains what any of this has to do with “webs” – is it an Internet thing? Do they have webbed hands?

(Friedman adopts new technology lexical to bypass his mind-fix)

But whatever, we get it, sort of. “Web people” embrace the future and “open systems,” i.e. free trade, bringing us closer to the heart of what Friedman is talking about.

Friedman is right that this election, like the Brexit vote, has really been a referendum on globalization. What’s infuriating is the cartoonish way he defines the critics of globalization.

“Wall people” in his mind are either xenophobic Trumpites who don’t want a flood of dirty, rapey immigrants entering their towns, or they’re Sanders socialists who don’t want to compete with foreign workers and insist on government handouts.

(Has Thomas ever worked at a minimum paid job?)

With regard to the latter, what troubles Friedman the most is the way Hillary is cozying up to her critics on the left:

She is opposing things she helped to negotiate, like the Pacific trade deal, and offering more benefits from government but refraining from telling people the hardest truth: that to be in the middle class, just working hard and playing by the rules doesn’t cut it anymore.

To have a lifelong job, you need to be a lifelong learner, constantly raising your game. (At the expense of the developing people?)

Yes, to get by these days, working hard isn’t enough to keep a job. You need to be “constantly raising your game.” Either that, or you need to marry a shopping mall heiress and write books fawning over Fortune 500 companies.

Friedman’s glib definition of globalization goes virtually unchallenged in the pundit-o-sphere, which by and large agrees with him that critics of globalism are either racists or afraid of capitalism.

But this issue is infinitely more complicated than that.

We never really had a referendum on globalization in America. It just sort of happened. (The US being left unchallenged after the fall of the Berlin Wall?)

People had jobs one day, then the next morning they were fired, replaced by 14-year-olds in Indonesia or sweatshop laborers in Bangladesh, working in unsafe hell-holes without overtime or health care, beaten when they don’t make quotas.

What exactly does “raising your game” mean in the context of that sort of competition?

Globalization in the snap of a finger essentially erased nearly two centuries of America’s bloody labor history.

It’s as if the Thibodeaux Massacre, the hangings of the Molly McGuires, the Pullman Strike, the L.A. Times bombing, the Flint sit-in and thousands of other strikes and confrontations never took place.

“Friedman’s glib definition of globalization goes virtually unchallenged in the pundit-o-sphere, which by and large agrees with him that critics of globalism are either racists or afraid of capitalism.”

In the new paradigm, all of those agonizing controversies and wars of political attrition, which collectively produced a vast set of rules and standards for dealing with workers, were simply wiped away.

Manufacturers just went abroad, to dictatorships and communist oligarchies, to make their products, forcing American workers to compete not just against foreign workers, but against their own history and legal systems.

People forget that when it comes to labor relations, America had to be dragged, kicking and screaming, in the direction of the civilized world.

Attempts to ban child labor in this country failed repeatedly, and we didn’t actually pass a federal child labor law that stuck until 1938. Airlines in America were still firing flight attendants for getting married through the mid-eighties.

Now all that work spent to get even past those most basic problems is at risk. In the global economy, employers can look at their business models as one giant arbitrage.

You do your banking in the laissez-faire havens of the Caribbean, build factories in slave-labor capitals like China or Indonesia, buy swaps in less-regulated financial atmospheres in London, sell your products in America and Europe, etc.

You also arrange your corporate structures so that you pay the smallest amount of tax possible, often by threatening to move until you receive subsidies and exemptions.

This leads to bizarre situations like Boeing making $26 billion in U.S. profits over a five-year period and receiving a U.S. federal tax refund of $401 million over the same time.

This whole situation has raised profound questions that nobody has ever bothered to try to answer for ordinary voters, as in: What are nation-states for, in a global economy?

What’s the point of all of our labor laws, or voting-rights laws, the first amendment and a host of other American legal traditions if large pluralities of American manufacturers do their business in countries like China, where human rights abuses are rampant, political freedom is nonexistent and speech is tightly controlled?

Friedman’s description of “Wall People” is probably somewhat true when it comes to Trump voters, many of whom do just want to be physically walled off from a confusing, racially diverse world.

But to dismiss the rest of globalization’s critics as communists who hate freedom and just want to curl up in the lap of government and hide from change is absurd and insulting.

Most educated people accept and embrace the idea of an increasingly integrated world. The problem is how to go forward into the future in a way that’s fair and doesn’t increase oppression, pollution, child labor, even slavery and indenture, to say nothing of the disenfranchisement of the ex-middle class in places like America.

These are very difficult questions. They’re ones that probably won’t have positive solutions without the determined leadership of the world’s bigger democratic powers, like the U.S. and the E.U.

The problem is that the major parties in the United States in particular seem almost totally disinterested in addressing the inequities of globalism. That’s because conventional wisdom is still stuck in the Friedman stage of telling people that if they’re troubled by the global economy, they’re just afraid of the future.

Because the Murphy’s Law tendency of American politics demands that we draw every conceivable wrong lesson from an event before accidentally stumbling in the direction of progress, the twin revolts in the 2016 presidential race will surely be misinterpreted for a good long while by the Friedmans of the world.

They won’t see the anti-establishment backlash as a reason to re-examine the impact of globalism on ordinary people.

Instead, as Friedman puts it, they’ll see an opportunity to build a single ruling coalition of “center-left Web People” (what a creepy image!) who will dominate the next generation of American politics:

My hope is that, for the good of the country, Republican Web People will, over time, join the Democratic Party and tilt it into a compassionate, center-left Web party for the 21st Century.

That would be a party that is sensitive to the needs of working people … but committed to capitalism, free markets and open trade as the vital engines of growth for a modern society.

Yes, let’s be sensitive to the needs of working people, unless they have complaints about globalism, in which case we’ll put our webbed hands over our ears and ignore them.

Are you loving this political season yet?

Revenge of the Simple:

How George W. Bush Gave Rise to Trump

By Matt Taibbi

To hear GOP insiders tell it, Doomsday is here. If Donald Trump scores huge on tonight and seizes control of the nomination in the Super Tuesday primaries, it will mark the beginning of the end of the Republican Party, and perhaps the presidency.

But Trump isn’t the beginning of the end. George W. Bush was.

The amazing anti-miracle of the Bush presidency is what makes today’s nightmare possible.

People forget what an extraordinary thing it was that Bush was president. Dubya wasn’t merely ignorant when compared with other politicians or other famous people. No, he would have stood out as dumb in just about any setting.

If you could somehow run simulations where Bush was repeatedly shipwrecked on a desert island with 20 other adults chosen at random, he would be the last person listened to by the group every single time.

He knew absolutely nothing about anything. He wouldn’t have been able to make fire, find water, build shelter or raise morale. It would have taken him days to get over the shock of no room service.

Bush went to the best schools but was totally ignorant of history, philosophy, science, geography, languages and the arts.

Asked by a child in South Carolina in 1999 what his favorite book had been growing up, Bush replied, “I can’t remember any specific books.”

Bush showed no interest in learning and angrily rejected the idea that a president ought to be able to think his way through problems.

As Mark Crispin Miller wrote in The Bush Dyslexicon, Bush’s main rhetorical tool was the tautology — i.e., saying the same thing, only twice.

“It’s very important for folks to understand that when there’s more trade, there’s more commerce” was a classic Bush formulation. “Our nation must come together to unite” was another.

One of my favorite tautologies was: “I understand that the unrest in the Middle East creates unrest throughout the region.”

Academics and political junkies alike giddily compiled these “Bushisms” along with others that were funny for different reasons (“I’m doing what I think what’s wrong,” for instance).

But Bush’s tautologies weren’t gaffes or verbal slips. They just represented the limits of his reasoning powers: A = A.

There are educational apps that use groups of images to teach two-year-olds to recognize that an orange is like an orange while a banana is a banana. Bush was stalled at that developmental moment. And we elected him president.

Bush’s eight years were like the reigns of a thousand overwhelmed congenital monarchs from centuries past. While the prince rode horses, romped with governesses and blew the national treasure on britches or hedge-mazes, the state was run by Svengalis and Rasputins who dealt with what Bush once derisively described as “what’s happening in the world.”

In Bush’s case he had Karl “Turd Blossom” Rove thinking out the problem of how to get re-elected, while Dick “Vice” Cheney, Donald “Rummy” Rumsfeld and Andrew “Tangent Man” Card took care of the day-to-day affairs of the country (part of Card’s responsibilities involved telling Bush what was in the newspapers he refused to read).

It took hundreds of millions of dollars and huge armies of such behind-the-throne puppet-masters to twice (well, maybe twice) sell a voting majority on the delusion of George Bush, president.

Though people might quibble with the results, the scale of this as a purely political achievement was awesome and heroic, comparable to a moon landing or the splitting of the atom.

Guiding Bush the younger through eight years of public appearances was surely the greatest coaching job in history. It was like teaching a donkey to play the Waldstein Sonata. It’s breathtaking to think about now.

But one part of it backfired. Instead of using an actor like Reagan to sell policies to the public, the Svengalis behind Bush sold him as an authentic man of the people, the guy you’d want to have an O’Doul’s with.

Rove correctly guessed that a generation of watching TV and Hollywood movies left huge blocs of Americans convinced that people who read books, looked at paintings and cared about spelling were either serial killers or scheming to steal bearer bonds from the Nakatomi building. (Even knowing what a bearer bond is was villainous).

The hero in American culture, meanwhile, was always a moron with a big gun who learned everything he needed to know from cowboy movies.

The climax of pretty much every action movie from the mid-eighties on involved shotgunning the smarty-pants villain in the face before he could finish some fruity speech about whatever.

Rove sold Bush as that hero. He didn’t know anything, but dammit, he was sure about what he didn’t know.

He was John McClane, and Al Gore was Hans Gruber.

GOP flacks like Rove rallied the whole press corps around that narrative, to the point where anytime Gore tried to nail Bush down on a point of policy, pundits blasted him for being a smug know-it-all using wonk-ese to talk over our heads — as Cokie Roberts put it once, “this guy from Washington doing Washington-speak.”

This is like the scene from the increasingly prophetic Idiocracy where no one can understand Luke Wilson, a person of average intelligence rocketed 500 years into America’s idiot future, because whenever he tries to reason with people, they think he’s talking “like a fag.”

The Roves of the world used Bush’s simplicity to win the White House. Once they got there, they used the levers of power to pillage and scheme like every other gang of rapacious politicians ever. But the plan was never to make ignorance a political principle. It was just a ruse to win office.

Now the situation is the opposite.

Now GOP insiders are frantic at the prospect of an uncultured ignoramus winning the presidency. A group of major donors and GOP strategists even wrote out a memo outlining why a super PAC dedicated to stopping Trump was needed.

“We want voters to imagine Donald Trump in the Big Chair in the Oval Office, with responsibilities for worldwide confrontation at his fingertips,” they wrote. Virginia Republican congressman Scott Ringell wrote an open letter to fellow Republicans arguing that a Trump presidency would be “reckless, embarrassing and ultimately dangerous.”

Hold on. It wasn’t scary to imagine George “Is our children learning?” Bush with the “responsibilities for worldwide confrontation” at his fingertips?

It wasn’t embarrassing to have a president represent the U.S. on the diplomatic stage who called people from Kosovo “Kosovians” and people from Greece “Grecians?”

It was way worse. Compared to Bush, Donald Trump is a Rutherford or an Einstein.

 In the same shipwreck scenario, Trump would have all sorts of ideas — all wrong, but at least he’d think of something, instead of staring at the sand waiting for a hotel phone to rise out of it.

Of course, Trump’s ignorance level, considering his Wharton education, is nearly as awesome as what Bush accomplished in spite of Yale.

In fact, unlike Bush, who had the decency to not even try to understand the news, Trump reads all sorts of crazy things and believes them all.

From theories about vaccines causing autism to conspiratorial questions about the pillow on Antonin Scalia’s face to Internet legends about Americans using bullets dipped in pigs’ blood to shoot Muslims, there isn’t any absurd idea Donald Trump isn’t willing to entertain, so long as it fits in with his worldview.

But Washington is freaking out about Trump in a way they never did about Bush. Why? Because Bush was their moron, while Trump is his own moron. That’s really what it comes down to.

And all of the Beltway’s hooting and hollering about how “embarrassing” and “dangerous” Trump is will fall on deaf ears, because as gullible as Americans can be, they’re smart enough to remember being told that it was OK to vote for George Bush, a man capable of losing at tic-tac-toe.

We’re about to enter a dark period in the history of the American experiment.

The Founding Fathers never imagined an electorate raised on Toddlers and Tiaras and Temptation Island.

Remember, just a few decades ago, shows like Married With Children and Roseanne were satirical parodies. Now the audience can’t even handle that much irony. A lot of American culture is just dumb slobs cheering on other dumb slobs.

It was inevitable, once we broke the seal with Bush, that our politics would become the same thing.

Madison and Jefferson never foresaw this situation. They knew there was danger of demagoguery, but they never imagined presidential candidates exchanging “mine’s bigger than yours” jokes or doing “let’s laugh at the disabled” routines.

There’s no map in the Constitution to tell us how to get out of where we’re going. All we can do now is hold on.

Read more: http://www.rollingstone.com/politics/news/revenge-of-the-simple-how-george-w-bush-gave-rise-to-trump-20160301#ixzz42JkoWfkh
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This US Congress is back to high school status: Prostituting politics?

Ladies and gentlemen, welcome to the U.S. Senate!

Israeli Prime Minister Benjamin Netanyahu spoke to Congress on March 3rd, 2015.

Standing ovation and frequent standing to applaud plenty of farting statements?

Israeli Prime Minister’s visit inspires bitchy barbs and insults, and nobody came out of this week looking good

Years ago, when I was just starting in this business, I had the privilege to meet a well-known muckraker and columnist. I asked him the secret of his success.

“Two things,” he said.

“One: when you’re hammered after a night out, drink an entire liter of water before you go to bed. An entire liter, do you understand? Otherwise the whole next work day is shot.”

“An entire liter,” I said. “Got it.”

Second, never write about Israel. It just pisses people off. No matter what you say, you lose half your Rolodex.”

I frowned. How he could ignore such an important topic? Didn’t he care?

“Son,” he said, “we’re prostitutes. We don’t enjoy the sex.”

After Netanyahu Speech, Congress Is Officially High School

By March 6, 2015

Mainly by accident, I sort of ended up following that advice, but I did watch the Benjamin Netanyahu speech and its aftermath this week. A few thoughts on one of the more unseemly scenes Congress has cooked up in a while:

Benjamin Netanyahu

Israeli Prime Minister Benjamin Netanyahu speaks to Congress on March 3rd, 2015. Samuel Corum/Anadolu Agency/Getty

First of all, the applause from members of the House and Senate was so over the top, it recalled the famous passage in the Gulag Archipelago about the apparatchik approach to a Stalin speech: “Never be the first one to stop clapping.”

Watching it, you’d almost have thought the members were experiencing a similar terror of being caught looking unenthusiastic.

I say almost because in reality, it’s a silly thought, in a democracy: nobody’s getting taken out back and shot for showing boredom.

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But then, no kidding at all, a gif apparently showing Rand Paul clapping with insufficient fervor rocketed around social media.

It got enough attention that the Washington Post wrote about it and Paul himself had to issue a statement on Fox and Friends denying he wasn’t clapping really, really hard. “I gave the Prime Minister 50 standing ovations. I co-sponsored bringing him here,” Paul pleaded. Is the Internet age beautiful or what?

But the telescreens weren’t just watching the Republicans. Cameras also captured Nancy Pelosi looking somewhat south of enraptured during the speech.

Those photos only circulated more after she said she was “near tears” because she was saddened by Netanyahu’s speech, which she termed an “insult to the intelligence of the United States.”

This in turn led to more social media avalanching and a cartoonish response from South Carolina Senator Lindsey Graham, who told a donor at a fund-raiser: “Did you see Nancy Pelosi on the floor? Complete disgust. . .If you can get through all the surgeries, there’s disgust!”

Ladies and gentlemen, welcome to the U.S. Senate!

If Kathy Griffin ever bombs out on Fashion Police, Graham will have a job waiting for him.

After Bloomberg traitorously reported on Graham’s locker-room joke about Pelosi’s face, a storm of criticism from Democrat members raged and the Senator was forced to walk his comments back (“I made a poor attempt at humor,” he said, in what is looking like the go-to lawyer-drafted apology line of our times).

All of this preening and adolescent defiance, all these bitchy homeroom-style barbs and insults: has the U.S. government ever seemed more like high school?

Harry Reid, Benjamin Netanyahu and Mitch McConnell
Senate Majority Leader Mitch McConnell (L), and Senate Minority Leader Harry Reid (R), pose with Israel’s Prime Minister Benjamin Netanyahu in Washington, DC on March 3rd, 2015. Mandel Ngan/AFP/Getty

Indiana Republican Jackie Walorski apparently thinks school’s still in. This is her reacting after Netanyahu’s speech, according to Slate:

“Wooh, baby! That was awesome!”

Around the world, not everyone was so enthused.

Several Israeli diplomats took to Twitter to voice their concerns over Netanyahu’s appearance.

(Everybody tweeted about this speech. There were more Iranian officials on Twitter Tuesday than there were sportswriters at the Super Bowl).

Yigal Caspi, Israel’s ambassador to Switzerland, retweeted a line from an Israeli journalist: “Is it no longer possible to suffice in scaring us here in Hebrew? [Netanyahu] has to fly all the way to the US Congress and tell them in English how dangerous Iran’s nuclear program is?”

Caspi and two other diplomats got the axe for their social media responses to the speech.

Meanwhile, British journalist Jeremy Bowen got caught in the Twitter Punji-trap when he made a comment about Elie Wiesel, the author and Holocaust survivor who sat in the Speaker’s box with Netanyahu’s wife, Sara.

A safe joke to make about Wiesel’s presence probably would have been something along the lines of, “I guess that book Elie was planning on co-writing with Barack Obama is on hold.”

The BBC’s Bowen went in a different direction, bluntly declaring that Netanyahu was “playing the Holocaust card” by bringing the Nobel laureate and camp survivor.

Instantly accused of anti-Semitism and Holocaust denial, Bowen and the BBC insisted that he was just using “journalistic shorthand,” and that the wording was appropriate because Netanyahu was raising the “spectre of another Holocaust.”

As of this writing, Twitter warriors are still feasting on Bowen’s head and should have him skeletonized by nightfall.

Nobody came out of this week looking good.

Regardless of where you stood on a possible nuclear deal with Iran, the whole episode this week made the American government look like what some in the Iranian press apparently called it: a clown show.

Once upon a time, the opposition party pursuing a second line of foreign policy for domestic political purposes was considered unseemly.

Think candidate Dick Nixon submarining the 1968 Vietnam Peace talks behind LBJ’s back, or the fabled October Surprise conspiracy theory.

This was something one did in secret, preferably in trench coats instead of ties, with no press at all present, unless you count Sy Hersh’s future sources.

But this was like the October Surprise as a pay-per-view MMA event.

That this sleazy scheme was cooked up mainly for the political gain of both the hosts and the speaker (who faces an election in two weeks) was obvious in about a hundred different ways, beginning with the fact that the speech was apparently timed so that Israeli audiences could watch it over dinner.

But the gambit only sort of worked for Netanyahu, whose Likud Party has experienced only a modest bounce since the speech, if it got one at all.

American news outlets humorously had different takes on the same polls showing Likud gaining one or two seats (HuffPo: “Netanyahu’s Popularity Rises After Speech to U.S. Congress: Polls”; Washington Post: “Netanyahu’s Speech to Congress Fails to Jolt Electoral Needle At Home”).

Similarly, if the move had any benefit to the Republicans in congress, it was hard to perceive.

Nobody in the media drew a link between Bibi’s speech and the Republicans’ surrender on the Homeland Security funding bill, but on some level there must have been one.

You can’t invite a foreign leader into the House Gallery to accuse a sitting president of being soft on terrorism in an event covered by 10 million journalists, and then turn around the same week and defund the president’s Homeland Security department over some loony immigration objective.

Even worse, the decision to try to conduct their own foreign policy in the shadow of the White House went over so badly with American voters, it actually gave Barack Obama a 5-point sympathy bump in his approval rating.

Put it all together, and the Republicans’ big rollout this week had to be the most self-defeating political pincer move since the Judean Peoples’ Front sent their Crack Suicide Squad to the rescue in Life of Brian.

This was a week that made everyone look bad: congress, the media, Netanyahu, the Tweeting Supreme Leader in Iran, everyone. Obama only came out looking OK because he mostly stayed off camera and kept his mouth shut.

Mostly, however, it was just a depressing, circus-like demonstration of how schizoid and dysfunctional Washington politics have become.

The logical next step after a caper like this is the opening of Republican and Democratic embassies abroad. Let’s hope it’s a long time before anyone tries this again.

Read more: http://www.rollingstone.com/politics/news/after-netanyahu-speech-congress-is-officially-high-school-20150306#ixzz3Toz4FYqK
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 “Total moral surrender”: Broken justice system on Wall Street

Matt Taibbi relentless coverage of Wall Street malfeasance turned him into one of the most influential journalists of his generation, but in his new book, “The Divide: American Injustice in the Age of the Wealth Gap,” Matt Taibbi takes a close and dispiriting look at how inequality and government dysfunction have created a two-tiered justice system in which most Americans are guilty until proven innocent, while a select few operate with no accountability whatsoever.

tells Salon about Geithner’s excuses, Piketty’s success and Nixon’s cronies this MAY 20, 2014:

Salon sat down last week with Taibbi for a wide-ranging chat that touched on his new book, the lingering effects of the financial crisis, how American elites operate with impunity and why, contrary to what many may think, he’s actually making a conservative argument for reform.

The interview can be found below, and has been lightly edited for length and clarity.

"It’s total moral surrender": Matt Taibbi unloads on Wall Street, inequality and our broken justice systemMatt Taibbi (Credit: AP/Louis Lanzano)

So, what is “The Divide”?

The book is really just about why some people go to jail and why some people don’t go to jail, and “the divide” is the term I came up with to describe this phenomenon we have where there are essentially two different criminal justice systems, one that works in one way for people who are either very rich or working within the confines of a giant systemically important institution, and the other system that works in another way for people who are without means. And that’s what the book is about.

A point you make in the book, though, is that the justice system is starting to treat people who aren’t poor or part of a marginalized group with a level of brutality we tend to think is only reserved for the oppressed.

I made a conscious decision to start the book with the story of Abacus Federal Savings bank, which is this little bank in Chinatown.

The people who run that bank were not poor. They weren’t even what you would typically classify as members of the victim class … But why was that bank prosecuted and why was Goldman Sachs or Chase not prosecuted?

What I was trying to get at was, in this new reality, [legal authorities] consider it not feasible to go after companies of a certain size, and [Abacus] is how small you have to be now to be targeted

There was an SEC commissioner who talked about “shot selection,” like in basketball, [and] how you should go for the baskets with the greatest chance of scoring.

So while it may be more satisfying to go after the bigger companies, you’re more likely to get a successful action against a smaller company.

It’s not just about poor people, it’s also just about the way the regulatory system works. Bureaucracies organically flow toward the easier result, and the easier result is always a smaller company, an undefended person, a low-level drug dealer.

The regulatory system hesitates before it decides to proceed against a well-heeled, well-defended company [against which] they’re going to have to fight for years and years and years just to get the case in court …

It’s not just about the poor, it’s more about how there’s a class that enjoys impunity and then there’s everybody else.

Do you think this is a new development?

Certainly the rich have always had it easier than the poor. I think that’s a story as old as a story can be. But what we’re seeing recently is that there have been a couple recent developments that have significantly worsened the situation, both going back to the Clinton years: Clinton signs on to welfare reform, Clinton and the Democrats begin to court the financial services sector and begin to adopt deregulatory policies.

Now you have political consensus in both parties on both issues; both have the same approach to poverty, to people at the bottom, and they have the same approach to enforcement.

What begins as deregulation of Wall Street concludes, ultimately, in potentially non-enforcement of crime; and what begins as being “tougher” on welfare cheats in the ’90s, and being tougher on the whole process of giving out benefits, devolves into something pretty close to the criminalization of poverty itself …

And that’s just something that happens naturally when you have a political consensus, which is what we have now. Including the additional factors of the Holder memo —

Would you mind explaining the Holder memo?

Holder, as deputy attorney general in the Clinton years, outlined what was actually sort of a “get tough on crime” document. He gave prosecutors all these tools to go after big corporations.

But, at the bottom [of the memo], he outlined this policy called “collateral consequences,” which was — all it really said was, if you’re a prosecutor and you’re going after a big corporation that employs a lot of people, and you’re worried about innocent victims, you can seek other remedies.

Instead of criminally prosecuting, you can do a deferred prosecution agreement, a non-prosecution agreement or, especially, you can levy fines.

When he wrote that, it was nearly a decade before the too-big-to-fail era, but when he came back to office [as Obama’s attorney general], this idea, which initially had been completely ignored when he first wrote it, suddenly [becomes] the law of the land now, insofar as these systemically important institutions are concerned.

The administration’s come out and overtly talked about collateral consequences and talked about [how] they can’t go against companies like HSBC and UBS because they’re worried about what the impact might be on the world economy.

What’s interesting about it is that this idea suddenly matches this thing that happened with our economy where we have the collapse of the economy in 2008, [and] instead of breaking up these bad companies, we merged them together and made them bigger and more dangerous.

Now they’re even more unprosecutable than before, now this collateral consequences idea is even more applicable. And that’s the reality we live in now; it’s just this world where if you can commit an offense within the auspices of a company like that, the resolution won’t be a criminal resolution, it will be something else.

The argument is similar to why they said they couldn’t prosecute people for torture: because the CIA is systemically important, because we can’t risk pissing off the national security community, because we can’t risk disturbing the national security system.

And where does it end? We’re sitting in the offices of “The Intercept” right now. What if you say you really want to pursue the illegal surveillance program? How could you do it? It’s a $75 billion mechanism that isn’t just contained in the United States.

It’s across multiple countries; it doesn’t exist in any one place; it’s everywhere. If you were to move against the smallest member of the conspiracy, you’d have to involve thousands of people. It’s impossible to even conceive of what that kind of [system-preserving] approach would be.

That’s exactly what the situation is. We have companies that are essentially beyond the reach of what we would traditionally think of as the law, which is a crazy concept because, even back in the ’70s, it was reinforced in every American’s mind that even the president could be dragged into a criminal case.

And now, we can’t even conceive of taking Lloyd Blankfein to court for lying to Congress.

An unspoken assumption undergirding this logic is the idea that these systems which we can’t mess with are actually working. As I’m sure you’re aware, former Treasury Secretary Tim Geithner’s memoir is now out, and in the reviews I’ve read, there’s something of a consensus view that the book shows how Geithner’s completely internalized the idea that the financialization of the economy is ultimately good for everybody.

So when people bring up all the things he could have done but didn’t do, his response is, Well, this is a good system, basically, and the most important thing is to keep it functioning.

So what’s the answer to that?

I’d say it inevitably makes a more radical response necessary.

I mean, it’s funny, [Geithner’s] shifting rationale … because the initial rationale, when Geithner first came to office and the economy was still fragile … is that he was concerned about the consequences of what he called “market-altering” prosecutions.

Geithner was worried that … if he were to suddenly delve into the dealings of a Countrywide — which might have the capacity to bring down Bank of America or AIG, which they were trying desperately to rehabilitate in its pseudo-nationalized state — [that] the economy was too fragile.

Well, we’re five, six years out of the crisis now, and the economy is ostensibly stabilized enough that we could theoretically entertain those kinds of prosecutions, but, exactly as you said, the rationale has kind of shifted to “This is a functioning system; it would cause too much damage to a fruitful and essentially functional international economy to take on these firms.

We’ve kind of made the strategic decision to resolve these matters with this crude system in which [authorities] just take a check from HSBC for working with drug traffickers, or they take a check from UBS for raiding LIBOR. That’s much more radical than “Let’s not fuck with the economy while we’re still in the middle of a crisis.”

And additionally, by the way, part of Geithner’s justification for everything that happened is that the bailouts worked. And I think there’s a community of regulators who are in that camp, who feel like we did what we had to do to keep it all from falling down.

So, they say, “Why would we want to go back and open that Pandora’s box again? We had to make these difficult decisions. The bailout was maybe distasteful, but it worked. So let’s not go and dig that all up again.”

But that conflates different issues. Do we give all these companies a pass for robo-signing? For mass perjury? Do we give them a pass for subprime mortgage fraud?

Do we give rating agencies a pass for giving out phony ratings? That doesn’t make sense in terms of helping the economy become more functional and more able to serve the needs of everybody. All it really does is allow people to get away with crimes.

Some elites also argue — both in regard to the financial crisis as well as the torture regime — that we should be sympathetic to regulators or torturers because they were operating in a chaotic and stressful environment. We weren’t there, so we can’t judge, basically.

This is another thing that’s in my book. Lehman Brothers, right? So, this huge fiasco happens with the sale of Lehman Brothers to Barclays … Barclays bought off insiders at Lehman to basically rig the sale in Barclays’ favor …

And when the creditors who got screwed out of billions of dollars tried to get the courts to reopen the matter, the judge in the case, Judge Peck, explicitly came out and said, Well, it’s sort of like war, where one can talk about the fog of war, we can talk about the fog of Lehman.

This is an extraordinary situation, things were happening, decisions were made. It’s exactly as you said, the justification essentially becomes: shit happens. And that’s crazy. It’s total moral surrender, and just like the torture issue, there’s the “How can you judge if you weren’t there?” idea. I mean, that takes away our ability to judge anything if that justification holds. That’s just crazy.

To make a reference to our shared alma mater [Bard College], this line of argument reminds me of something Hannah Arendt once wrote — I think it was in “Origins of Totalitarianism,” but I’m not sure — which was, essentially, that people are more able to make the right judgment about a situation when they’re not in it.

When you’re not in the middle of something, you’re more able to see it from every angle and draw a fully informed, rational conclusion.

That’s absolutely true. There was a kind of collective Stockholm Syndrome that formed around the entire financial services sector and the regulatory sector. They were very much thrown together in the middle of this crisis, innocent and guilty alike, and they crafted this solution to get us all out of it.

And things were learned about what had gone on before 2008, but they essentially collectively decided they weren’t going to look into those things because they’re weren’t a part of the solution for getting out of the crisis.

They were the wrong people to judge what was happening during that period. They really needed outside, independent observers to go in and look to see [whether] was this really fraud or [whether] was this market mania, over-zealousness.

And every sane observer who has looked at it has said it was fraud, it was mass criminality — and [the financial sector is] not really the people you would want to ask for an objective opinion about that stuff.

That view goes so strongly against the rationale Obama gave when he first announced his economic team. Critics said, “The people you’ve picked to fix this mess are the ones who created it to begin with!” And Obama and his team would say, “Well, who knows it better?”

Exactly — they brought in all the people who had helped to repeal the Glass-Steagall Act, who helped push through the Commodity Futures Modernization Act.

Not only did they create too-big-to-fail essentially through the Gramm–Leach–Bliley Act but they … greatly accelerated the financialization of the economy with the total deregulation of the derivatives market.

And these are the people you’re going to bring back to sit in judgment of what went on? They were the people who are screwing up to begin with — exactly the people you don’t want to have looking at this thing.

I started covering this Wall Street story way back in late 2008, and, from the very beginning, I heard disappointment on Wall Street from financial professionals who said Obama had missed this teachable moment.

Here’s this politician with these great communication skills, who could have come in and explained to people what had happened before 2008, that the banking sector had decided to massively engage in this totally socially useless activity of creating toxic mortgages and selling them off to people all around the world.

And instead of doing that, instead of creating a modern-day Pecora Commission and getting to the bottom of it and creating new and safer vehicles for people to trade in, they just threw a bunch of money at the problem and brought in all the same hacks who had created the problem and tried to sweep it under the rug.

Naming your book “The Divide” — was that intended at all to be a nod toward “The Great Divergence”?

No, it wasn’t intended to be that. I really struggle with titles. And headlines also. “Spanking the Donkey” was a really good title. I liked that one a lot.

“The Divide” is a little bit more of a serious book [than my others]; there’s less humor and less of that kind of jokey narrative stuff than in anything else I’ve written. So I think it’s an appropriate title, it seems to me.

I bring it up because it feels like wealth inequality is kind of this specter that’s hovering above the whole discussion of the two legal systems.

It’s all related. The Thomas Piketty thing, why are people interested in that? Elizabeth Warren’s book, Michael Lewis’s book, what Glenn’s doing over there with “The Intercept” — it’s this growing story about institutional inequality that is getting more and more pronounced with each passing year. And the impunity of certain institutions and certain individuals is growing all the time.

It’s a question that people are thinking about. Ten years ago, 15 years ago, you would never have seen a book like Thomas Piketty’s flying off the shelves, because it would have been too taboo for anyone to be asking out loud if there’s anything inherently dysfunctional about our form of corporate capitalism.

But people are asking that question now because it’s just so obvious and ubiquitous. Not just in the criminal justice system that I’m writing about, but in everybody’s life now. So yeah, I think we’re all kind of talking about the same thing; it’s just we’re talking about different parts of it.

I think looking at its effect on the criminal justice system is especially useful, too, because it’s evidence of Piketty’s argument about how inequality isn’t just bad economically, but is corrosive to our values, it’s a problem —

Morally.

Yes, morally.

Morally, it doesn’t work anymore. You just cannot have a society where people instinctively know that certain people are above the law, because it will create total disrespect for authority among everybody else. And that’s completely corrosive.

You need to have people believing in the system to some degree — even if it’s just an illusion, you need to have them believing. And that was … another thing I was trying to get to in this book, the difference between what happened in the Bush years, with the scandals with Adelphi and Enron and Tyco, and what happened now, [when] they just stopped seeing the necessity of keeping up appearances.

They didn’t even make a few symbolic prosecutions, and so it leaves the entire public with this glaring statistic that there were no prosecutions and there was massive crime. How does that make anybody else feel? How does it make you feel when you pay a speeding ticket, you can’t write that off, but HSBC can write off its $1.9 billion fine for drug trafficking?

People start to think about these things, and they start losing their faith in the system and it doesn’t work anymore. It’s funny, because when they talk about income inequality on the campaign trail and in these elections …

They always talk about it in this unthreatening, antiseptic way, and it’s just so much more extreme than that. It’s much broader and more disgusting problem than the way they typically present it in our political debate. So that was another thing I was trying to do, was to try to bring out the grotesque nature of the whole thing.

To your point about accountability, it reminds me of what some Nixon supporters — like Ronald Reagan — said during Watergate, before Nixon resigned, about the president’s cronies: They did things that were illegal but they weren’t, y’know, crimes.

Exactly. I heard that and very similar expressions all throughout this process. They weren’t crime crimes. Like, what does that even mean? There’s a difference between committing a crime and just breaking the law? There really isn’t a difference, and especially — even when you dig under the service of what the malefactors and the villains in my book did — they really werecrimes.

If you saw “Scarface” and that scene when Tony Montana is walking into the bank with his duffel bags full of money and walks out without the duffel bags, well, that’s what HSBC was doing, they were washing the money for murderers.

Price fixing? I mean, c’mon, that’s what the mafia does. Bribery? The Jefferson County case where they’re bribing local officials to get them into bad swap deals? It’s organized crime.

But in many cases they’re paper crimes so they don’t seem so bad, or they’re merely enabling somebody who’s violent so they’re not the person with actual blood on their hands, or it’s pennies at a time from millions of people — the “Office Space” model of crime — so people don’t feel like it’s a big robbery. I mean, that’s a crazy distinction. It’s an Orwellian expression.

You know, with your comment about how people need to believe in the system to some degree, it occurs to me that in a fundamental way, you’re actually making a small-c conservative argument. You’re not saying we need to burn everything to the ground and start over, you’re saying we need to stick with the principles we supposedly all believe in.

People forget that all my sources come from Wall Street. They’re all capitalists, they’re all ardent capitalists. They grew up, their passion in life was reading Adam Smith and believing in that whole world.

And I came into this story 6 years ago, whatever it was, not really knowing a whole lot about it, but certainly I never would have described myself as an ardent capitalist …

When people ask me what the solutions are to these problems, for me, the fastest shortcut to everything being cleaned up is disentangling the government from its unnatural support of these too-big-to-fail institutions, forcing them to sink or swim on their own in the real free market.

I never would have imagined myself making that argument five or six years ago, but that’s the argument … These people, not only are they not being prosecuted, but they’re not subject to the normal forces of the market anymore, and in a way that enables them even more …

If you were to force these companies to sink or swim on their own they’d be vaporized instantly. We see this every time there’s any hint the government is going to stop bailing these companies out or may consider not doing it in the future — they lose billions of dollars in market capitalization overnight …

It’s a very conservative argument [I’m making]. I’m not advocating for socialism; I’m advocating for the “Schoolhouse Rock” version of what we were taught about democracy and capitalism, and we have a long way to go just to get back to that.

 

Elias IsquithElias Isquith is an assistant editor at Salon, focusing on politics. Follow him on Twitter at @eliasisquith, and email him at eisquith@salon.com.

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