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Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America
The dramatic story behind the most audacious power grab in American history
The financial crisis that exploded in 2008 isn’t past but prologue. The stunning rise, fall, and rescue of Wall Street in the bubble-and-bailout era was the coming-out party for the network of looters who sit at the nexus of American political and economic power. The grifter class—made up of the largest players in the financial industry and the politicians who do their bidding—has been growing in power for a generation, transferring wealth upward through increasingly complex financial mechanisms and political maneuvers. The crisis was only one terrifying manifestation of how they’ve hijacked America’s political and economic life.
Rolling Stone’s Matt Taibbi here unravels the whole fiendish story, digging beyond the headlines to get into the deeper roots and wider implications of the rise of the grifters. He traces the movement’s origins to the cult of Ayn Rand and her most influential—and possibly weirdest—acolyte, Alan Greenspan, and offers fresh reporting on the backroom deals that decided the winners and losers in the government bailouts. He uncovers the hidden commodities bubble that transferred billions of dollars to Wall Street while creating food shortages around the world, and he shows how finance dominates politics, from the story of investment bankers auctioning off America’s infrastructure to an inside account of the high-stakes battle for health-care reform—a battle the true reformers lost. Finally, he tells the story of Goldman Sachs, the “vampire squid wrapped around the face of humanity.”
Taibbi has combined deep sources, trailblazing reportage, and provocative analysis to create the most lucid, emotionally galvanizing, and scathingly funny account yet written of the ongoing political and financial crisis in America. This is essential reading for anyone who wants to understand the labyrinthine inner workings of politics and finance in this country, and the profound consequences for us all.
The financial crisis that exploded in 2008 isn’t past but prologue. The stunning rise, fall, and rescue of Wall Street in the bubble-and-bailout era was the coming-out party for the network of looters who sit at the nexus of American political and economic power. The grifter class—made up of the largest players in the financial industry and the politicians who do their bidding—has been growing in power for a generation, transferring wealth upward through increasingly complex financial mechanisms and political maneuvers. The crisis was only one terrifying manifestation of how they’ve hijacked America’s political and economic life.
Rolling Stone’s Matt Taibbi here unravels the whole fiendish story, digging beyond the headlines to get into the deeper roots and wider implications of the rise of the grifters. He traces the movement’s origins to the cult of Ayn Rand and her most influential—and possibly weirdest—acolyte, Alan Greenspan, and offers fresh reporting on the backroom deals that decided the winners and losers in the government bailouts. He uncovers the hidden commodities bubble that transferred billions of dollars to Wall Street while creating food shortages around the world, and he shows how finance dominates politics, from the story of investment bankers auctioning off America’s infrastructure to an inside account of the high-stakes battle for health-care reform—a battle the true reformers lost. Finally, he tells the story of Goldman Sachs, the “vampire squid wrapped around the face of humanity.”
Taibbi has combined deep sources, trailblazing reportage, and provocative analysis to create the most lucid, emotionally galvanizing, and scathingly funny account yet written of the ongoing political and financial crisis in America. This is essential reading for anyone who wants to understand the labyrinthine inner workings of politics and finance in this country, and the profound consequences for us all.
253 pages, Hardcover
First published September 21, 2010
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January 19, 2023
You don’t have to be Dorothy or “The One” to know that there is something foul going on behind the economic curtain. Matt Taibbi, a former contributing editor at Rollingstone, rips away the misinformation that cloaks some of the most nefarious behavior in American history. He looks at a few elements of what can only be described as institutional organized crime and explains just what is going on in clear, understandable terms.
He takes aim at the ethos of smug Ayn Rand acolytes, reserving particular scorn for Alan Greenspan. While Greenspan may indeed be, as Taibbi calls him, the “Biggest Asshole in the World,” it is the worldview of Rand’s followers and their impact on our economy has been remarkable and not in a good way. He shows how.
Taibbi looks also at how commodity speculation has resulted in misery for all of us, how myopic government officials are racing to sell off public property and long-term revenue streams in return for short term payments solely to keep themselves in office through the next election cycle, how private interests have made a scandal of our national health care system and he offers a close look at the “vampire squid” that is Goldman Sachs. The latest economic downturn is not the first one, or even the largest, in which they have had causal impact.
My one gripe with the book is Taibbi’s fondness for the foul. For example, while one may sympathize with Taibbi’s view of Alan Greenspan and his fellow Ayn Rand acolytes, it does his argument no service to call them “jerk-offs.” While such heartfelt expression may be satisfying, and might be standard fare for his Rollingstone readers, it makes his book inaccessible to any who are not already on board with his analysis. Once readers from an alternate view come across Taibbi’s merry profanity, they have an easy excuse to dismiss him.
Griftopia reminded me of Naomi Klein’s The Shock Doctrine in its visceral impact. This is very compelling stuff. By the time you finish reading the book, you may want to invest in pitchfork and torch futures. Taibbi offers plenty of fuel with which we might light up the night. If only.
January 14, 2019 - NY Times - Malaysia Blames Goldman Sachs for Stolen Billions - by Alexandra Stevenson
OTHER READING
April 19, 2012 - TARP on steroids for the EEU furthers the demise of democracy and guess who helped set it up?- The European Stabilization Mechanism, Or How the Goldman Vampire Squid Just Captured Europe
June 21, 2012 - a Taibbi Rollingstone piece on how Wall Street rips us all off, The Scam Wall Street Learned From the Mafia
==============================THE AUTHOR
Links to the author’s Twitter and FB pages
I could paste a gazillion Taibbi refs here, but if you are interested in more than the few listed here, the Google machine will happily spit up scads when you enter the author’s name.
Matt at Rollingstone (he left there in February 2014)
Matt’s pre-2011 blog
My look at another Matt Taibbi book, the Divide
The engine for looting the old ghetto neighborhoods was the drug trade, which served two purposes with brutal efficiency. Narco-business was the mechanism for concentrating all the money on the block into that Escalade-hungry dealer’s hands, while narco-chemistry was the mechanism for keeping the people on his block too weak and hopeless to do anything about it. The more dope you push into the neighborhood, the more weak, strung-out, and dominated the people who live there will be.Taibbi goes into detail on how this scam has been inflicted on so much of the population.
In the new American ghetto, the nightmare engine is bubble economics, a kind of high-tech casino scam that kills neighborhoods just like dope does, only the product is credit, not crack or heroin. It concentrates the money of the population in just a few hands with brutal efficiency, just like narco-business, and just as in narco-business the product itself, debt, steadily demoralizes the customer to the point where he’s unable to prevent himself from being continually dominated.
He takes aim at the ethos of smug Ayn Rand acolytes, reserving particular scorn for Alan Greenspan. While Greenspan may indeed be, as Taibbi calls him, the “Biggest Asshole in the World,” it is the worldview of Rand’s followers and their impact on our economy has been remarkable and not in a good way. He shows how.
Taibbi looks also at how commodity speculation has resulted in misery for all of us, how myopic government officials are racing to sell off public property and long-term revenue streams in return for short term payments solely to keep themselves in office through the next election cycle, how private interests have made a scandal of our national health care system and he offers a close look at the “vampire squid” that is Goldman Sachs. The latest economic downturn is not the first one, or even the largest, in which they have had causal impact.
My one gripe with the book is Taibbi’s fondness for the foul. For example, while one may sympathize with Taibbi’s view of Alan Greenspan and his fellow Ayn Rand acolytes, it does his argument no service to call them “jerk-offs.” While such heartfelt expression may be satisfying, and might be standard fare for his Rollingstone readers, it makes his book inaccessible to any who are not already on board with his analysis. Once readers from an alternate view come across Taibbi’s merry profanity, they have an easy excuse to dismiss him.
Griftopia reminded me of Naomi Klein’s The Shock Doctrine in its visceral impact. This is very compelling stuff. By the time you finish reading the book, you may want to invest in pitchfork and torch futures. Taibbi offers plenty of fuel with which we might light up the night. If only.
January 14, 2019 - NY Times - Malaysia Blames Goldman Sachs for Stolen Billions - by Alexandra Stevenson
OTHER READING
April 19, 2012 - TARP on steroids for the EEU furthers the demise of democracy and guess who helped set it up?- The European Stabilization Mechanism, Or How the Goldman Vampire Squid Just Captured Europe
June 21, 2012 - a Taibbi Rollingstone piece on how Wall Street rips us all off, The Scam Wall Street Learned From the Mafia
==============================THE AUTHOR
Links to the author’s Twitter and FB pages
I could paste a gazillion Taibbi refs here, but if you are interested in more than the few listed here, the Google machine will happily spit up scads when you enter the author’s name.
Matt at Rollingstone (he left there in February 2014)
Matt’s pre-2011 blog
My look at another Matt Taibbi book, the Divide
March 26, 2011
This is the 6th book I've read about the recent financial catastrophes.
Fools Gold, The End of Wall Street, The Big Short, How Markets Fail, All the Devils Are Here are all worthy books, but Griftopia tops the rest with its insights and outrage.
Taibbi doesn't simply settle for exposition and analysis. He's angry that business (Wall Street, insurance industry in particular) abetted by our government has robbed us blind while citizens have amused themselves with a media circus that doesn't investigate or analyze anything but rather creates endless cheap Punch & Judy shows featuring mindless, clowns wearing business attire variously speaking in measured tones or spouting pointless vitriol.
Taibbi is the Hunter Thompson of our time, but an improved version who does his homework and shows us where all the bodies have been buried.
Watch the documentary Inside Job and then read Griftopia
Fools Gold, The End of Wall Street, The Big Short, How Markets Fail, All the Devils Are Here are all worthy books, but Griftopia tops the rest with its insights and outrage.
Taibbi doesn't simply settle for exposition and analysis. He's angry that business (Wall Street, insurance industry in particular) abetted by our government has robbed us blind while citizens have amused themselves with a media circus that doesn't investigate or analyze anything but rather creates endless cheap Punch & Judy shows featuring mindless, clowns wearing business attire variously speaking in measured tones or spouting pointless vitriol.
Taibbi is the Hunter Thompson of our time, but an improved version who does his homework and shows us where all the bodies have been buried.
Watch the documentary Inside Job and then read Griftopia
September 21, 2015
When I finally put this book down I thought only one thing....
EVERYONE IN AMERICA SHOULD READ THIS DAMN BOOK!
'Griftopia' is about the people and institutions that are actively taking away your future. The greed and gluttony of the rich and powerful has never felt so perverse.
If education is truly a weapon against oppression, then this book is everyone's fucking infantry rifle. Buy it and load up on ammo.
EVERYONE IN AMERICA SHOULD READ THIS DAMN BOOK!
'Griftopia' is about the people and institutions that are actively taking away your future. The greed and gluttony of the rich and powerful has never felt so perverse.
If education is truly a weapon against oppression, then this book is everyone's fucking infantry rifle. Buy it and load up on ammo.
March 3, 2017
I've read three books concerning the financial collapse. The other two were by Yves Smith and Joseph Stiglitz and, while perfectly understandable and, in Stiglitz' case, as a dignified and careful critique, they didn't leave me steaming like this account. Matt Taibbi goes the full mile in this book and fills us in on all the facts that make up the big picture. I'm sorry to say that several of the events he mentioned got right by me when they were happening.
Would that every issue of national interest had such a carefully researched, all-embracing summary like this one. I'd recommend this book heartily to all - as long as some profanity isn't objectionable, like frequent references to people as assholes - the chief one being the man that could do no wrong for so long, Alan Greenspan.
If you are an Ayn Rand fan, approach this book carefully as Rand is roasted. Sarah Palin, the Tea Party, Republicans and Democrats alike get large amounts of rotten veggies all over their faces - and with good reasons that are well documented.
There is a concise four paragraph account of the deception that Barack Obama pulled off - running on positions that he immediately reversed upon taking office. Taibbi tells all about the sell-out to the insurance and pharmaceutical industries in very understandable prose that you could easily (and should) spread around to others. He never fails to place the blame by naming the individuals involved, virtually all of which have come through the mess as millionaires charged with no crime.
He takes us through the history of the last 30 years to let us see how the Beast of Wall Street, Goldman Sachs, played games with the American economy, offering innovations in financial products that were known to be risky, even rotten - to the point that GS was betting against them and laughing about it behind the backs of the customers from which it was taking orders.
The book quotes from the GS literature given to investors, the small print that nobody reads, clearly stating GS is free to do as it wishes, including taking positions (buying or selling in the market) in contradiction to the advice it gives clients.
As Taibbi puts it, America is swirling around the drain and Goldman Sachs did everything it could to be the drain (you'll get a juicy metaphor every dozen pages or so). He identifies all the personalities involved with the bail-out, both in and out of the government, that are Goldman Sachs alumni; a tight circle that always made sure the public paid and GS ended up a winner.
The AIG bailout was complex, involving credit default swaps that had nothing to back them up. If you don't know what that means, you will after reading this book.
Taibbi is understandably irate. The complexity of the economy invites the insiders to play games while the public is left in confusion about what is going on and mistakenly assumes that those in government are properly minding the store.
Griftopia is as easy to read as a book can be. The pages fly by. You might imagine the author lounging on your living room sofa ranting and raving as would a good friend who is concerned that you aren't paying attention to what's been happening.
He's absolutely right. It is exactly the same with foreign policy where all kinds of nefarious activity takes place about which, but for Wikileaks, the public would be ignorant. The powerful act in a world apart and all of us pay for the consequences. The considerate, the cautious, the less-than-obsessed-with-ambition do not make it to the halls of power and the ones who do are very much alike in the arrogance and connivance with which they act. Deception is the rule, whether it comes from the mouth of the CEO of Goldman Sachs, or that of the Secretary of State or even the President. All you and I see is the imagery they want us to see.
Lincoln was right in the 19th century when he said you can't fool all the people all the time, but we are far closer to that now than we have ever been and there are many putting it to the test with all the cleverness they can muster.
Would that every issue of national interest had such a carefully researched, all-embracing summary like this one. I'd recommend this book heartily to all - as long as some profanity isn't objectionable, like frequent references to people as assholes - the chief one being the man that could do no wrong for so long, Alan Greenspan.
If you are an Ayn Rand fan, approach this book carefully as Rand is roasted. Sarah Palin, the Tea Party, Republicans and Democrats alike get large amounts of rotten veggies all over their faces - and with good reasons that are well documented.
There is a concise four paragraph account of the deception that Barack Obama pulled off - running on positions that he immediately reversed upon taking office. Taibbi tells all about the sell-out to the insurance and pharmaceutical industries in very understandable prose that you could easily (and should) spread around to others. He never fails to place the blame by naming the individuals involved, virtually all of which have come through the mess as millionaires charged with no crime.
He takes us through the history of the last 30 years to let us see how the Beast of Wall Street, Goldman Sachs, played games with the American economy, offering innovations in financial products that were known to be risky, even rotten - to the point that GS was betting against them and laughing about it behind the backs of the customers from which it was taking orders.
The book quotes from the GS literature given to investors, the small print that nobody reads, clearly stating GS is free to do as it wishes, including taking positions (buying or selling in the market) in contradiction to the advice it gives clients.
As Taibbi puts it, America is swirling around the drain and Goldman Sachs did everything it could to be the drain (you'll get a juicy metaphor every dozen pages or so). He identifies all the personalities involved with the bail-out, both in and out of the government, that are Goldman Sachs alumni; a tight circle that always made sure the public paid and GS ended up a winner.
The AIG bailout was complex, involving credit default swaps that had nothing to back them up. If you don't know what that means, you will after reading this book.
Taibbi is understandably irate. The complexity of the economy invites the insiders to play games while the public is left in confusion about what is going on and mistakenly assumes that those in government are properly minding the store.
Griftopia is as easy to read as a book can be. The pages fly by. You might imagine the author lounging on your living room sofa ranting and raving as would a good friend who is concerned that you aren't paying attention to what's been happening.
He's absolutely right. It is exactly the same with foreign policy where all kinds of nefarious activity takes place about which, but for Wikileaks, the public would be ignorant. The powerful act in a world apart and all of us pay for the consequences. The considerate, the cautious, the less-than-obsessed-with-ambition do not make it to the halls of power and the ones who do are very much alike in the arrogance and connivance with which they act. Deception is the rule, whether it comes from the mouth of the CEO of Goldman Sachs, or that of the Secretary of State or even the President. All you and I see is the imagery they want us to see.
Lincoln was right in the 19th century when he said you can't fool all the people all the time, but we are far closer to that now than we have ever been and there are many putting it to the test with all the cleverness they can muster.
October 3, 2019
Here is a book that invites anger. Anger and then hopelessness. I read for awhile and found myself becoming so angry I needed to set it down. This is an important book that will hopefully be read and draw people closer together as they recognise the true source of America’s downfall.
February 3, 2021
Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America
by Matt Taibbi
I read this book a long time ago but it is still relevant today. The book is not about you or me but about the con men and women behind the scenes. (Well, some are right there in our faces just lying to us!)
This book covers the right, left, and everyone in between. No one is left out. The many ways people have had the screws put to us and gotten away with it. The author pulls no punches!
He makes even the most complex scams easy to understand.
I forgot how good this book was! Definitely need to get one of his newer books!
by Matt Taibbi
I read this book a long time ago but it is still relevant today. The book is not about you or me but about the con men and women behind the scenes. (Well, some are right there in our faces just lying to us!)
This book covers the right, left, and everyone in between. No one is left out. The many ways people have had the screws put to us and gotten away with it. The author pulls no punches!
He makes even the most complex scams easy to understand.
I forgot how good this book was! Definitely need to get one of his newer books!
March 16, 2016
Each book by Mr. Taibbi just gets better. Since his days writing for The Exile (which I loved), he has been slowly perfecting the balance of righteous fury, investigative journalism, and appreciation of the absurd in his writing. This book gets it just about right.
The premise of his last book is that political parties on the left and right, in their zeal to service their corporate masters, have abandoned the lower and middle classes, leaving them to cobble together their own view of the world using the Internet, a half-remembered high-school education, and whatever nonsense the media is feeding them at the moment.
In this book, we learn the M.O. and tricks of these corporate masters as they systematically fleece America. A country this rich and this anti-intellectual is just too much of a mark for what Mr. Taibbi calls "the Grifter class" (and what Kurt Andersen similarly called The Grasshopper Generation) not to take to the cleaners.
And America gets taken to the cleaners repeatedly. The book covers the dot com bubble and the housing bubble. Kind of standard stuff we've all heard before, though very well explained. I've read a bunch of books about this. But the book is only half over at this point. Then we get the commodity bubble. (Remember when gas and food prices spiked with no corresponding decrease in supply?) Then we get these scary sovereign wealth funds that are buying America's infrastructure. (Remember when Congress wouldn't allow a Dubai company to run operations for six American ports?)
I had to reread that part of the book. Things like the Pennsylvania Turnpike and the parking meter revenue for the City of Chicago are actually for sale and being bought by non-U.S. companies. Read the book just for this one surreal part.
I feel like Mr. Taibbi is more at home writing about politics. It beings with an interesting account of his reactions to the first time he heard Sarah Palin speak. He clearly has to struggle more with the financial material, but the refreshing bluntness and outsider view more than makes up for it. In the chapter about Goldman Sachs (the famous vampire squid) there is a very telling introduction that explains how the financial press circled their wagons against the original article that appeared in Rolling Stone.
And there's more: Alan Greenspan gets a good takedown. The health care bill is dissected.
After reading this book I had no choice but to sink further into apathy. The only other possible reaction would be to violate my Generation X roots and actually start to get interested in politics. It's clearly too late for that. I'll just wallow in my cynicism and helplessness. And the next person who comes around talking about hope and change will get punched in the neck.
The premise of his last book is that political parties on the left and right, in their zeal to service their corporate masters, have abandoned the lower and middle classes, leaving them to cobble together their own view of the world using the Internet, a half-remembered high-school education, and whatever nonsense the media is feeding them at the moment.
In this book, we learn the M.O. and tricks of these corporate masters as they systematically fleece America. A country this rich and this anti-intellectual is just too much of a mark for what Mr. Taibbi calls "the Grifter class" (and what Kurt Andersen similarly called The Grasshopper Generation) not to take to the cleaners.
And America gets taken to the cleaners repeatedly. The book covers the dot com bubble and the housing bubble. Kind of standard stuff we've all heard before, though very well explained. I've read a bunch of books about this. But the book is only half over at this point. Then we get the commodity bubble. (Remember when gas and food prices spiked with no corresponding decrease in supply?) Then we get these scary sovereign wealth funds that are buying America's infrastructure. (Remember when Congress wouldn't allow a Dubai company to run operations for six American ports?)
I had to reread that part of the book. Things like the Pennsylvania Turnpike and the parking meter revenue for the City of Chicago are actually for sale and being bought by non-U.S. companies. Read the book just for this one surreal part.
I feel like Mr. Taibbi is more at home writing about politics. It beings with an interesting account of his reactions to the first time he heard Sarah Palin speak. He clearly has to struggle more with the financial material, but the refreshing bluntness and outsider view more than makes up for it. In the chapter about Goldman Sachs (the famous vampire squid) there is a very telling introduction that explains how the financial press circled their wagons against the original article that appeared in Rolling Stone.
And there's more: Alan Greenspan gets a good takedown. The health care bill is dissected.
After reading this book I had no choice but to sink further into apathy. The only other possible reaction would be to violate my Generation X roots and actually start to get interested in politics. It's clearly too late for that. I'll just wallow in my cynicism and helplessness. And the next person who comes around talking about hope and change will get punched in the neck.
July 25, 2014
If you really want to understand the 2008 financial crisis, you owe it to yourself to read this book. It goes way beyond the subprime mortgage disaster and even explains why gas prices went through the roof in the summer of 2008. (I remember it well, as we were looking for a fuel-efficient, safe first car for our daughter, and Honda Civics were about as hard to find as the pot of gold at the end of the rainbow.) HINT: I can almost promise the answer will surprise you.
As Americans, we think we have some clue how our government works. Well, we know how it's supposed to work. All that "By the People, For the People" stuff you learned in school? Yeah, we've pretty much abandoned all that stuff. Corporations are running America now. The kind of corporations whose executives laugh when they talk about how they duped their own customers. How does a company like that remain in business, you ask? Well, when its former executives run the Dept. of Treasury, the World Bank, the Canadian and Italian national banks, the New York Stock Exchange, the New York Federal Reserve Bank...you get the idea.
Matt Taibbi has sources up and down the ladder in local, state and national government, investment houses, hedge funds, sovereign wealth funds, you name it. Most of his sources are named in the book. The information they share is eye-opening, to say the least. (By the way, sovereign wealth funds, or SWFs, are where Saudi Arabia and other oil-producing nations stash their cash, and you wouldn't believe how much of the USA they own. Take all of Chicago's parking meters, for example. And that's just for starters.)
I think the thing I appreciate most about this book is Taibbi's humor, for which you'll really be thankful when you start to understand what's really going on here. Taking a close second to that is his ability to boil down lots of complex information into a few, readable paragraphs. He'll pique your interest, so that you'll want to read more and delve further into the details, but he gives you a good, broad understanding of the big picture. I can't wait to read his other books.
The audio for this one is also extremely well done, and I can also recommend it. I received a free copy at http://www.tryaudiobooks.com
As Americans, we think we have some clue how our government works. Well, we know how it's supposed to work. All that "By the People, For the People" stuff you learned in school? Yeah, we've pretty much abandoned all that stuff. Corporations are running America now. The kind of corporations whose executives laugh when they talk about how they duped their own customers. How does a company like that remain in business, you ask? Well, when its former executives run the Dept. of Treasury, the World Bank, the Canadian and Italian national banks, the New York Stock Exchange, the New York Federal Reserve Bank...you get the idea.
Matt Taibbi has sources up and down the ladder in local, state and national government, investment houses, hedge funds, sovereign wealth funds, you name it. Most of his sources are named in the book. The information they share is eye-opening, to say the least. (By the way, sovereign wealth funds, or SWFs, are where Saudi Arabia and other oil-producing nations stash their cash, and you wouldn't believe how much of the USA they own. Take all of Chicago's parking meters, for example. And that's just for starters.)
I think the thing I appreciate most about this book is Taibbi's humor, for which you'll really be thankful when you start to understand what's really going on here. Taking a close second to that is his ability to boil down lots of complex information into a few, readable paragraphs. He'll pique your interest, so that you'll want to read more and delve further into the details, but he gives you a good, broad understanding of the big picture. I can't wait to read his other books.
The audio for this one is also extremely well done, and I can also recommend it. I received a free copy at http://www.tryaudiobooks.com
November 28, 2011
The word "polemic" comes to mind. Taibbi's Griftopia kicks off to a blistering start, and pretty much maintains that battery-acid tone throughout. The opening essays imply more of an anti-Republican stance than is actually the case - by the end it's clear that Taibbi is pissed at everyone just about equally, but most on the right wing could be forgiven for not managing to make it through the author's vituperation to the bits where he starts in on Obama and the Democrats. Hell, I had a hard time making it, and I'm the theoretical core audience for this treatise. Perhaps I'm old fashioned, but I tend to think that you catch more flies with honey - or at least with a reasoned argument complete with citations rather than off-the-cuff references only to anonymous sources. Griftopia is well-written and full of fascinating behind-the-scenes looks into the financial crisis, but at its heart it's a rant (the kind where the speaker is spitting whilst speaking), which hamstrings the author's ability to bring his point home.
April 10, 2012
There was a lot going through my head when I was reading Taibbi's latest must-read book: disgust, anger, wonder, even laughter at his still-incredible powers of description, but at the very end, after I'd finished and had to take a minute to absorb what I'd just read, what I felt most was sadness. More than anything else, this is a book about a country in decline, a country that can't even recognize what its problems are, let alone try to fix them; instead feverishly running through one fraudulent get-rich-quick scheme after another. If you've been paying attention to the news at all for the last few years, you know that the American economy is not exactly in peak health. This is what happens when both the financial sector and government officials decide that the country is more profitable to loot than to invest in, and use their time to convert money from America's decaying physical assets into NoVa chalets. The chapter on how state and local governments nationwide have started selling off infrastructure to shady megabank investors at fire-sale prices to temporarily plug budget holes is stunning in its depiction of short-term thinking, but it's not like they have any options. Meanwhile, the saying that the easiest way to rob a bank is to own one is still true; it's pretty clear that not only do the lucky recipients of the trillions of dollars of free bailout money not have to worry about continuing to own their banks, they don't have to worry about the robbery either since they've paid people to make their crimes perfectly legal, and, as Tea Party cheerleaders like Rick Santelli repeatedly insist, even noble and laudable. Our entire national dialogue is broken. We've become so used to open corruption and kindergarten-level debates that even after the should-have-been-seismic event of the 2008 election, the same groups of Wall Street criminals continued their business of looting the country practically undisturbed by politicians like Obama who were eager to water down even the most timid reforms in exchange for money. Memories of eras like the New Deal and the Great Society have faded to the point where even suggesting that the government should maybe ask health insurance companies to be slightly less sociopathic puts you in the company of Stalin. PJ O'Rourke had a great line: "When buying and selling are controlled by legislation, the first things to be bought and sold are legislators." Unfortunately, he might be right. This is an excellent polemical counterpart to the nerdier Hacker & Pierson book, but be warned that you won't walk away from this one feeling very good about America.
February 21, 2011
Oh my God! This book is such a phenomenal and spell-binding eye-opener! Some non-fiction books I read, I just want the author to furnish validation to opinions I already hold. This book, on the other hand, reveals so many things I had no idea about, in an extremely entertaining fashion. The chapter on Ayn Rand, and Alan Greenspan's membership in her circle, is worth the price of admission all by itself. (Maybe it helps that I forced myself to finish Rand's Atlas Shrugged a hundred years ago; it wasn't horrid, it did have a message, but talk about NOT saying what you have to say and then sitting down...) Anyway, that chapter is titled "The Biggest Asshole in the Universe" (referring to Greenspan). So, if you find yourself in a bookstore, whet your appetite with this one.
While we're busy being distracted with whether American born children of immigrants should have reduced citizenship, and other distractions du jour, the country is being swindled. SWFs (sovereign wealth funds, largely oil-generated mega-pools of wealth) are buying up pieces of the infrastructure of America at laughable prices, to fill state budget holes (e.g., the Chicago Skyway, all the parking meters in Chicago, are now not public property, but owned by largely foreign private individuals). But SWFs are just the theme of one of the chapters. Each chapter focuses on a different theme, and they'll all make you sick that
our politicians are willing to go along for the right to campaign contributions. We're being sold out, America.
While we're busy being distracted with whether American born children of immigrants should have reduced citizenship, and other distractions du jour, the country is being swindled. SWFs (sovereign wealth funds, largely oil-generated mega-pools of wealth) are buying up pieces of the infrastructure of America at laughable prices, to fill state budget holes (e.g., the Chicago Skyway, all the parking meters in Chicago, are now not public property, but owned by largely foreign private individuals). But SWFs are just the theme of one of the chapters. Each chapter focuses on a different theme, and they'll all make you sick that
our politicians are willing to go along for the right to campaign contributions. We're being sold out, America.
December 2, 2010
"'Follow the money' has long been my mantra, and Matt Taibbi's cogent reporting does the best job describing various economic crises of the last fifteen years of any that I've read, peeling away each level of complexity in a way that the layman reader can easily understand our world turned upside down as a result of greedy financiers and their collusion with the government. He details the creation and bursting of the dot.com bubble, the 2004 energy crisis, and the 2008 economic collapse, and like the prosecutor in a Mafia trial, lays out a scathing indictment of Wall Street and those who set monetary policy in the U.S., starting with Alan Greenspan, whose Ayn Randian views continue to pervade economic policy long after her death in the early 1980s."
Link to the rest of my Amazon Vine review of Taibbi's book via my blog entry at http://laurie-gold.blogspot.com/2010/...
Link to the rest of my Amazon Vine review of Taibbi's book via my blog entry at http://laurie-gold.blogspot.com/2010/...
December 13, 2010
excellent pop-overview of the state of usa and globalization. wars? blowouts? torture? underemployment? oil culture? la crisis? what one thing is connected to all this? rich fat cats making lots and lots of money. fat cats rule the world!
November 30, 2010
Well, I'm back on the crack - financial meltdown. Because I just haven't suffered enough. At least Matt (yes, I call him Matt) has a sense of humor - and he swears appropriately.
May 21, 2019
Disclaimer: When it comes to money and the business world, I rank somewhere between a pacifier-sucking infant and college freshman stoned on paint fumes in terms of comprehension. Ask me about my financial portfolio and I'll just blink and stare at you. Talk to me about derivatives and I'll most likely suffer an acute case of diarrhea so I can run to the safety of the nearest bathroom. I try to keep these things in my head, I really do. But they leak out.
(Sorry--that was not an intentional reference to diarrhea.)
Still, when the Occupy Wall Street movement erupted, I found myself torn. On the one hand, roll my eyes though I might, it was hard to completely discount sneering cable pundits' reports of "lazy slacker deadbeats" or whatever the phrase was, antagonistic at the haves because they worked for what they had. On the other hand, memories of huge taxpayer-funded giveaways are fresh enough even in my mind to make myself wonder, "Well, why not occupy Wall Street?"
I mean, it's hardly a secret that federal bailouts have been doing on for decades, and from what I can tell, the beneficiaries keep reporting record profits. Didn't Reagan, that paragon of free markets, bail out the S&Ls in the eighties? Didn't he install high tariffs to protect American corporations against the Japanese?
And then there's Newt Gingrich, who, when Speaker of the House, presided over a district that got more federal subsidies than any other district in the U.S. outside the District of Columbia. For him to go on about the free market when the dividend returns were...oh god, excuse me. I have to go to the bathroom.
Well, clearly, I'm not the guy to listen to. But I think I found someone who is.
Matt Taibbi's book on the financial collapse and the egregious sins of banking and government that not only led up to it but actively encouraged it has made my list of Books I Have Read that Really Make Me Angry (see Eric Alterman's What Liberal Media? and Joel Bakan's Childhood Under Siege for other examples). It's maddening to get a glimpse of what truly passes for power, as opposed to the four-year cyclic sideshow we call elections, and even more maddening when the truth is groaning with the weight of financial procedure and economic theory that even the author, with his accessible style and breakdown of the basics, admits is a bitch to unravel for the uninitiated.
Taibbi begins his book in September, 2008, when Sarah Palin accepted the Republican nomination for VP and when we were (unknown to the mainstream media) inches away from complete financial collapse. This is no accident, but it doesn't take long to realize that his axe to grind is nowhere near driving distance of partisan. Taibbi starts by arguing that the Tea Party encourages the anti-government-meddling attitude that fuels efforts to repeal acts like the Consumer Financial Protection Agency Act (which he argues is weak at best) while simultaneously waving a negligent hand at big-government bailouts of banks engaging in insane borrowing and speculative gambling that results in economic bubbles, inflated prices, artificial value and eventual busts that cost jobs and livelihoods.
He also points out that the Democrats are just as deep in the pockets of the banks for their elections, and that Obamacare is a huge giveaway to the pharmaceutical companies in a way completely anathema to the president's campaign promises. He ranges from the policies of the Fed under Alan Greenspan, to the mortgage and tech bubbles to the backdoor shenanigans of Goldman-Sachs, Bear Stearns and the other Banking Masters of the Universe. When his points are laced with jargon and technical language, he explains it, and he manages to keep a tone that swings between erudite and angry-guy-at-the-end-of-the-bar:
(Sorry--that was not an intentional reference to diarrhea.)
Still, when the Occupy Wall Street movement erupted, I found myself torn. On the one hand, roll my eyes though I might, it was hard to completely discount sneering cable pundits' reports of "lazy slacker deadbeats" or whatever the phrase was, antagonistic at the haves because they worked for what they had. On the other hand, memories of huge taxpayer-funded giveaways are fresh enough even in my mind to make myself wonder, "Well, why not occupy Wall Street?"
I mean, it's hardly a secret that federal bailouts have been doing on for decades, and from what I can tell, the beneficiaries keep reporting record profits. Didn't Reagan, that paragon of free markets, bail out the S&Ls in the eighties? Didn't he install high tariffs to protect American corporations against the Japanese?
And then there's Newt Gingrich, who, when Speaker of the House, presided over a district that got more federal subsidies than any other district in the U.S. outside the District of Columbia. For him to go on about the free market when the dividend returns were...oh god, excuse me. I have to go to the bathroom.
Well, clearly, I'm not the guy to listen to. But I think I found someone who is.
Matt Taibbi's book on the financial collapse and the egregious sins of banking and government that not only led up to it but actively encouraged it has made my list of Books I Have Read that Really Make Me Angry (see Eric Alterman's What Liberal Media? and Joel Bakan's Childhood Under Siege for other examples). It's maddening to get a glimpse of what truly passes for power, as opposed to the four-year cyclic sideshow we call elections, and even more maddening when the truth is groaning with the weight of financial procedure and economic theory that even the author, with his accessible style and breakdown of the basics, admits is a bitch to unravel for the uninitiated.
Taibbi begins his book in September, 2008, when Sarah Palin accepted the Republican nomination for VP and when we were (unknown to the mainstream media) inches away from complete financial collapse. This is no accident, but it doesn't take long to realize that his axe to grind is nowhere near driving distance of partisan. Taibbi starts by arguing that the Tea Party encourages the anti-government-meddling attitude that fuels efforts to repeal acts like the Consumer Financial Protection Agency Act (which he argues is weak at best) while simultaneously waving a negligent hand at big-government bailouts of banks engaging in insane borrowing and speculative gambling that results in economic bubbles, inflated prices, artificial value and eventual busts that cost jobs and livelihoods.
He also points out that the Democrats are just as deep in the pockets of the banks for their elections, and that Obamacare is a huge giveaway to the pharmaceutical companies in a way completely anathema to the president's campaign promises. He ranges from the policies of the Fed under Alan Greenspan, to the mortgage and tech bubbles to the backdoor shenanigans of Goldman-Sachs, Bear Stearns and the other Banking Masters of the Universe. When his points are laced with jargon and technical language, he explains it, and he manages to keep a tone that swings between erudite and angry-guy-at-the-end-of-the-bar:
With the $13-plus trillion we are estimated to ultimately spend on the bailouts, we could not only have bought and paid off every single sub-prime mortgage in the country (that would only have cost $1.4 trillion), we could have paid off every remaining mortgage of any kind in this country--and still have had enough money left over to buy a new house for every American who does not already have one.
But we didn't do that, and we didn't spend the money on anything else useful, either. Why?...Because we're no good anymore at building bridges and highways or coming up with brilliant innovations in energy or medicine. We're shit now at finishing massive public works projects or launching brilliant fairy-tale public policy ventures like the moon landing...What are we good at? Robbing what's left.
With polemic like this, the devil, of course, is in the details, and I can't even hope to know where to begin. Banks pressured the government to raise limits on dollar-to-debt ratios? They ignored long-term risks, even at the expense of investors? They lied to investors? And to homeowners? They took trillions in federal bailouts and walked away rich as hell and scot-free? Rick Santelli is a tool of the finance industry and his Tea Party-creating rant was more full of bullshit than a cattle farm? Elections are a sham? Lousy homebuyers were encouraged and enabled by fake credit ratings? Honest homebuyers were swindled?
In the end, even as my head is spinning trying to keep it all straight, the essentials remain: we've not only been lied to about what's wrecking our markets. We're not even part of the equation.
Even to me, not all of this is exactly news, not in the light of the past year of alternative media. But having Taibbi to take you by the hand and walk you through the financial fundamentals is another matter. Yes, he's vulgar and loads his prose with invective (Greenspan is the "biggest asshole in the universe," for example, while Goldman Sachs guards dubious investment plans with "mid-level state employees with substandard salaries and profound cases of financial penis envy"). Yes, this gets in the way sometimes. But he's pretty persuasive, and I've found no serious rebuttals of his work, beyond the non-denial denials that tend to dog the best muckrakers when they're on to something.
Some other nuggets he dishes out: Mayor Richard Daley's giveaway of Chicago's parking meters to foreign companies (a growing trend that almost included the Pennsylvania Turnpike); the mortgage-backed securities scam; Goldman Sachs holding Texas pensions hostage in order to force the government to bail out AIG; the commodities bubble and how it spiked up oil prices despite politicians' claims about greedy SUV-guzzling Americans and the need for offshore drilling; Greenspan's Ayn Rand-fueled fuckups with the Fed; and pretty convincing glimpses of upper-echelon players like AIG's Win Neuger and his maniacal pursuit of short-term profits at the expense of long-term investors. There's more, but you get the idea: the scams abound, and while we're just figuring them out, these guys have moved on to five other scams by the time the earlier ones hit the press.
Critics argue that Taibbi offers no solutions to the mess. I disagree. Towards the end, he points out that, yes, the economic world is a complicated thing and it takes tremendous amounts of time to figure out the basics. But awareness is a first step, and once you're past that step, you're much less likely to get suckered in by the partisan rhetoric (i.e. drilling for oil in Alaska vs. buying a hybrid). My record of belief in the importance of the informed, responsible voter is pretty clear, and Taibbi shares it with no less zeal:
We still know very little about what really went on during (the past few years), who was calling whom, what bank was promised what... We need to know what the likes of (Henry) Paulson, (Timothy) Geithner and (Ben) Bernanke were doing those key stretches of 2008.Getting our heads out of the sand won't fix the problem overnight. But until we do, no solution is possible. So, at the very least, I'll be chugging the Pepto and poring over the business pages. That's one American down.
But we probably never will, because the country increasingly is forgetting that any of this took place. The ability of its citizens to lose focus so quickly and to be distracted by everything from Lebronamania to the immigration debate is part of what makes America so ripe for this type of corporate crime. We have voters who don't pay attention, a news media that either ignores key subjects or willfully misunderstands them, and a regulatory environment that bends easily to lobbying and campaign financing efforts.
September 1, 2011
This book made me want to get rip-roaring drunk, set a banker on fire, and kick a member of Congress square in the nuts, preferably from a running start. It put me one step closer to finally realizing my dream of living somewhere in the wilderness like the Unibomber (although without all the Unibombing). It took all of my already cynical ideas about how America works, patted them on the head and said, “You’re just adorable,” and then proceeded to tell me that Santa Claus is not only dead, but that his body was stuffed, covered in rhinestones and sold to the CEO of Goldman-Sachs to use as a towel rack in his guest bathroom.
Much like The Great Derangement, wherein Taibbi explains how Americans have built new realities for themselves based on their politics, this book really seems to be aimed right at me. My natural distrust of the government and especially of business makes me a natural reader for this kind of thing, and that sets off my bias alarms. So keep that in mind – I’m probably having a hard time evaluating Taibbi and his claims fairly, in that I think they’re all absolutely correct. They may not be, but that’s how they felt as I read the book.
Taibbi’s premise is disturbingly simple: the American political and economic system is set up to reward lying, cheating and grift. From the fraudsters who convinced poor families to take out loans on McMansions to the Great Greenspan himself, our economic engine has been running for years on an unstable fuel of high-octane mendacity. Every now and then, there is a hitch – the tech bubble of the late 90s, the housing crash, the oil price spike of 2008, the Great Financial Meltdown – but the engine keeps going. What’s more, the people who caused the bubbles and crashes manage to skate clear of damage and punishment, rewarded by lawmakers who are beholden to them. It’s a self-corrupting system that values short-term profit over long-term stability, and it’s probably going to be the ruin of us all.
The mortgage fiasco is well-described here. Taibbi takes us from the bottom of the financial food chain – a low-income homeowner who thought he was getting a great chance for a home of his own, and follows the chain of deceit up and up and up, from the mortgage broker who sold the deal (and, incidentally both lied about his client’s credit score and got him an adjustable mortgage in order to garner a higher finder’s fee) to the banks that put all these rotten mortgages together, to the insurance companies and financial institutions that bought them, sold them and traded them. All across the board, they lied about what they had and made sure that they passed their rotten goods off to some other poor sucker before the whole thing went wrong. And when it did, it was like some horrible chain of dominoes that started with people who discovered they couldn’t pay $1,500 a month for their home, and ended with the failure of banks that had ruled the financial sector for decades.
What’s more, the US government let this happen. Under the guise of being “pro-business,” politicians have been loosening restrictions and adjusting interest rates for decades under the willful delusion that the free market can manage itself just fine. Under the direction of Ayn Rand disciples such as Alan Greenspan, the power of the government to manage corrupt banks and insurance companies is about as impressive as an elementary school crossing guard. They wanted business free of its regulatory fetters, and that’s what they got. What everyone else got, of course, was screwed.
Another example: during 2008, Taibbi noticed something weird. Gas prices were skyrocketing, but supply was keeping pace with demand. There were no lines at gas stations like there had been in the 70s, when OPEC refused to sell us oil. If you wanted to fill up, you could, as long as you were willing to pay a price that went up moments before you pulled into the station. Even people with the barest understanding of economics understands supply and demand – if the supply is lower than the demand, the price goes up, and vice versa. But here, neither the supply of gasoline nor the overall demand for it changed, yet prices were shooting up past $4 a gallon. What, as they say, the HELL was going on?
Our politicians – especially the ones battling for the White House – had pat answers ready for the cameras. Obama blamed the Evil Oil Companies and wasteful SUV drivers. McCain blamed anti-drilling legislation and environmental regulation. Everybody blamed China for its accelerating growth. All of that, as it turns out, was misleading at best, bullshit at worst.
The answer: oil speculation, the use of commodities futures to make a ton of money by driving the price of oil ever higher. Futures were originally intended to provide a safety net for buyers and sellers of commodities, so that neither one would lose too badly if supply or demand shifted unexpectedly. But a way was found to exploit this system, for profiteers to buy and sell massive amounts of stuff to each other, raising their profits to obscene levels.
While a few clever people on Wall Street were getting rich through oil money, thousands of regular people were getting boned. The higher price of gas meant people with long commutes had to quit jobs and leave schools, which put them in ever-deepening financial straits. The price of oil has a very real effect on lives, but that was all ignored so that some high rollers could get rich. The close ties between the banking sector and the US government were what allowed this to happen, after decades of “pro-business” deregulation.
The health care overhaul, the sale of American cities to foreign investors, the collapse of the stock market and the erasure of untold billions of dollars of savings and investments are all given a close, angry look in this book, and Taibbi does a good job at making it understandable to those of us who aren’t really good with the intricacies of the financial sector. He takes his time, breaking down each scam into its component parts, and makes sure you can see every piece of the puzzle as he puts it together.
But what he also does – and I don’t think this is necessarily intentional – is paint a picture of hopelessness. At least, that’s how I saw it. The “great vampire squid” of the financial sector (a metaphor he used specifically with Goldman-Sachs) is inextricably attached to our government and the people who run it, sucking the blood out of the country that we thought we had. The more you see the connections, the more it seems like that squid simply cannot be removed and will never be sated.
What’s more, our elected officials are doing a brilliant job at convincing the American people that removing the squid is not necessary. The Tea Party chants its simplistic message that the Constitution is all the law we need, and our leaders smile and nod and watch the money come in. Lawmakers rail against the evil of “earmarks” right up until the day they get elected, and then make sure they reward the people who got them into office. Every time someone tries to loosen the tentacles a bit, they’re attacked as anti-business or anti-capitalist or just out and out socialist, and they’re either shamed or threatened into submission. They tell us that it’s all really complicated, and we shouldn’t worry our pretty little heads about it – here’s another season of Jersey Shore.
And the American people? We are, after all, the holders of sovereignty for the country – what about us? We’re idiots. We don’t want to spend the time necessary to understand a problem as ridiculously complex as the fraud that’s being perpetrated in our names, and the leaders we elected aren’t at all interested in making sure we’re educated. We’re instantly distracted by the new shiny thing and forget what happened only a few months ago thanks to smooth talking fraudsters who want us upset about gay marriage and Mexicans in our schools. We trust a media that needs us to be angry, but only just angry enough to keep watching. We’re tied up with businesses that see us as nothing more than a resource to be exploited.
When the whole thing finally becomes unsustainable, when that final bill becomes due, they will slip away in the night with the wealth of nations in their pockets, leaving the rest of us to kill each other over refrigerator boxes and dogmeat.
See? Told you this book made me angry….
-----------------------------------------
“This story is the ultimate example of American’s biggest political problem. We no longer have the attention span to deal with any twenty-first century crisis. We live in an economy that is immensely complex and we are completely at the mercy of the small group of people who understand it – who incidentally often happen to be the same people who built these wildly complex economic systems. We have to trust these people to do the right thing, but we can’t, because, well, they’re scum. Which is kind of a big problem, when you think about it.”
- Matt Taibbi, Griftopia
Much like The Great Derangement, wherein Taibbi explains how Americans have built new realities for themselves based on their politics, this book really seems to be aimed right at me. My natural distrust of the government and especially of business makes me a natural reader for this kind of thing, and that sets off my bias alarms. So keep that in mind – I’m probably having a hard time evaluating Taibbi and his claims fairly, in that I think they’re all absolutely correct. They may not be, but that’s how they felt as I read the book.
Taibbi’s premise is disturbingly simple: the American political and economic system is set up to reward lying, cheating and grift. From the fraudsters who convinced poor families to take out loans on McMansions to the Great Greenspan himself, our economic engine has been running for years on an unstable fuel of high-octane mendacity. Every now and then, there is a hitch – the tech bubble of the late 90s, the housing crash, the oil price spike of 2008, the Great Financial Meltdown – but the engine keeps going. What’s more, the people who caused the bubbles and crashes manage to skate clear of damage and punishment, rewarded by lawmakers who are beholden to them. It’s a self-corrupting system that values short-term profit over long-term stability, and it’s probably going to be the ruin of us all.
The mortgage fiasco is well-described here. Taibbi takes us from the bottom of the financial food chain – a low-income homeowner who thought he was getting a great chance for a home of his own, and follows the chain of deceit up and up and up, from the mortgage broker who sold the deal (and, incidentally both lied about his client’s credit score and got him an adjustable mortgage in order to garner a higher finder’s fee) to the banks that put all these rotten mortgages together, to the insurance companies and financial institutions that bought them, sold them and traded them. All across the board, they lied about what they had and made sure that they passed their rotten goods off to some other poor sucker before the whole thing went wrong. And when it did, it was like some horrible chain of dominoes that started with people who discovered they couldn’t pay $1,500 a month for their home, and ended with the failure of banks that had ruled the financial sector for decades.
What’s more, the US government let this happen. Under the guise of being “pro-business,” politicians have been loosening restrictions and adjusting interest rates for decades under the willful delusion that the free market can manage itself just fine. Under the direction of Ayn Rand disciples such as Alan Greenspan, the power of the government to manage corrupt banks and insurance companies is about as impressive as an elementary school crossing guard. They wanted business free of its regulatory fetters, and that’s what they got. What everyone else got, of course, was screwed.
Another example: during 2008, Taibbi noticed something weird. Gas prices were skyrocketing, but supply was keeping pace with demand. There were no lines at gas stations like there had been in the 70s, when OPEC refused to sell us oil. If you wanted to fill up, you could, as long as you were willing to pay a price that went up moments before you pulled into the station. Even people with the barest understanding of economics understands supply and demand – if the supply is lower than the demand, the price goes up, and vice versa. But here, neither the supply of gasoline nor the overall demand for it changed, yet prices were shooting up past $4 a gallon. What, as they say, the HELL was going on?
Our politicians – especially the ones battling for the White House – had pat answers ready for the cameras. Obama blamed the Evil Oil Companies and wasteful SUV drivers. McCain blamed anti-drilling legislation and environmental regulation. Everybody blamed China for its accelerating growth. All of that, as it turns out, was misleading at best, bullshit at worst.
The answer: oil speculation, the use of commodities futures to make a ton of money by driving the price of oil ever higher. Futures were originally intended to provide a safety net for buyers and sellers of commodities, so that neither one would lose too badly if supply or demand shifted unexpectedly. But a way was found to exploit this system, for profiteers to buy and sell massive amounts of stuff to each other, raising their profits to obscene levels.
While a few clever people on Wall Street were getting rich through oil money, thousands of regular people were getting boned. The higher price of gas meant people with long commutes had to quit jobs and leave schools, which put them in ever-deepening financial straits. The price of oil has a very real effect on lives, but that was all ignored so that some high rollers could get rich. The close ties between the banking sector and the US government were what allowed this to happen, after decades of “pro-business” deregulation.
The health care overhaul, the sale of American cities to foreign investors, the collapse of the stock market and the erasure of untold billions of dollars of savings and investments are all given a close, angry look in this book, and Taibbi does a good job at making it understandable to those of us who aren’t really good with the intricacies of the financial sector. He takes his time, breaking down each scam into its component parts, and makes sure you can see every piece of the puzzle as he puts it together.
But what he also does – and I don’t think this is necessarily intentional – is paint a picture of hopelessness. At least, that’s how I saw it. The “great vampire squid” of the financial sector (a metaphor he used specifically with Goldman-Sachs) is inextricably attached to our government and the people who run it, sucking the blood out of the country that we thought we had. The more you see the connections, the more it seems like that squid simply cannot be removed and will never be sated.
What’s more, our elected officials are doing a brilliant job at convincing the American people that removing the squid is not necessary. The Tea Party chants its simplistic message that the Constitution is all the law we need, and our leaders smile and nod and watch the money come in. Lawmakers rail against the evil of “earmarks” right up until the day they get elected, and then make sure they reward the people who got them into office. Every time someone tries to loosen the tentacles a bit, they’re attacked as anti-business or anti-capitalist or just out and out socialist, and they’re either shamed or threatened into submission. They tell us that it’s all really complicated, and we shouldn’t worry our pretty little heads about it – here’s another season of Jersey Shore.
And the American people? We are, after all, the holders of sovereignty for the country – what about us? We’re idiots. We don’t want to spend the time necessary to understand a problem as ridiculously complex as the fraud that’s being perpetrated in our names, and the leaders we elected aren’t at all interested in making sure we’re educated. We’re instantly distracted by the new shiny thing and forget what happened only a few months ago thanks to smooth talking fraudsters who want us upset about gay marriage and Mexicans in our schools. We trust a media that needs us to be angry, but only just angry enough to keep watching. We’re tied up with businesses that see us as nothing more than a resource to be exploited.
When the whole thing finally becomes unsustainable, when that final bill becomes due, they will slip away in the night with the wealth of nations in their pockets, leaving the rest of us to kill each other over refrigerator boxes and dogmeat.
See? Told you this book made me angry….
-----------------------------------------
“This story is the ultimate example of American’s biggest political problem. We no longer have the attention span to deal with any twenty-first century crisis. We live in an economy that is immensely complex and we are completely at the mercy of the small group of people who understand it – who incidentally often happen to be the same people who built these wildly complex economic systems. We have to trust these people to do the right thing, but we can’t, because, well, they’re scum. Which is kind of a big problem, when you think about it.”
- Matt Taibbi, Griftopia
July 2, 2016
Note: In selecting my shelves (read, history/politics, nonfiction, etc., I started to add "true crime."
Taibbi's book scares me while not letting me put it down. Well, I have finished it and don't have the energy to write much about it now. He spares no one/no level of the greed. I found his writing frighteningly plausible. I'll use just one: He wrote in detail about the packaging and repackaging of mortgages pushed upon people who did not have the money to buy such a house with such a mortgage. He said the banks would put FICO scores and income levels from people who had just died onto the bad mtge applications. If that's true, that's a crime of massive proportions. Then then, he said, they divided the mortgages into best, moderate, and toxic trash. The best were given AAA ratings and sold easily. Those purchasers could gain immediate gains from the monthly mortgage payments of relatively secure mortgagees. Once those AAA's were gone, the companies "repackaged" the remaining, because they were supposed to police themselves--the moderate loans were then labelled AAA and thus sold relatively well. If I understood him correctly, the purchasers kept these for only a brief while, with their gain being the mortgage payments of almost all of these, then resold them before the true nature of the risky mortgages started to make their purchase start to lose money. These and the toxic risks were manipulated over and over so the companies buying them could gain $$$ and quickly sell them off again to unload the junk off on other purchasers. Then they began to make the "bets" for and against their own clients who were buried in these consolidated packages. As I understood him, this mess is all Ponzi and it was then the deals started crashing that the banks and funds began to start crying, Poor us," to the government and by that time the worldwide economy was crashing.
I thought the best written chapters were the chapter on Greenspan--talk about a shellacking! He laid out the predictions Greenspan made over and over different administrations that all proved wrong. Then he quoted Greenspan talking as if he had not made that prediction but instead had predicted the actual outcome. The second chapter was the one above on the mortgage bubbles.
Taibbi's own predictions are depressing--that we tend not to learn from our previous failures and the few remaining big banks are set to go again with other bubbles.
What is really missing from this book are an index and more information about his sources. If as a journalist (Rolling Stone) he has sources he is protecting, he can still add relevant publications, books, articles, documents, lawsuits, etc.
I put off reading this book because the title sounded so gimmicky but then I read and heard more about it and realized I had been reading Taibbi's articles in Rolling Stone (magazine). He uses "down and dirty" language to document how greed and deliberate misrepresenting investments was wound all through the American financial institutes.
His explanation of the bundling of mortgages, re-bundling and re-rating the lower mortgages over and over actually made money with each resales. He has a chapter on Greenspan that is relentless! Just this night I saw Greenspan on a news program doing just what Taibbi said he has done throughout his career: claim he gave the right advice to Bush 43 to lower taxes but then when the deficits grew and grew, he said he knew then that taxes shouldn't have been lowered.
His documentation of Goldman Sachs long-time role in tearing down our economy and world economies is very persuasive. Today (June 30, 2011) headlines in NYT business section are about Goldman Sachs moving jobs overseas.
I am reading Mortgenson's and Rosner's Reckless Endangerment which is also clear and fits with Taibbi's. I am outraged that they did not cite Taibbi's articles or this book. Elitism?
Reckless Endangerment focuses more on Fannie Mae and Fannie Mac and their role. I thought the Fannies were funded by the US Government but they no longer are and yet they advertise their services as if they are.
Taibbi's book scares me while not letting me put it down. Well, I have finished it and don't have the energy to write much about it now. He spares no one/no level of the greed. I found his writing frighteningly plausible. I'll use just one: He wrote in detail about the packaging and repackaging of mortgages pushed upon people who did not have the money to buy such a house with such a mortgage. He said the banks would put FICO scores and income levels from people who had just died onto the bad mtge applications. If that's true, that's a crime of massive proportions. Then then, he said, they divided the mortgages into best, moderate, and toxic trash. The best were given AAA ratings and sold easily. Those purchasers could gain immediate gains from the monthly mortgage payments of relatively secure mortgagees. Once those AAA's were gone, the companies "repackaged" the remaining, because they were supposed to police themselves--the moderate loans were then labelled AAA and thus sold relatively well. If I understood him correctly, the purchasers kept these for only a brief while, with their gain being the mortgage payments of almost all of these, then resold them before the true nature of the risky mortgages started to make their purchase start to lose money. These and the toxic risks were manipulated over and over so the companies buying them could gain $$$ and quickly sell them off again to unload the junk off on other purchasers. Then they began to make the "bets" for and against their own clients who were buried in these consolidated packages. As I understood him, this mess is all Ponzi and it was then the deals started crashing that the banks and funds began to start crying, Poor us," to the government and by that time the worldwide economy was crashing.
I thought the best written chapters were the chapter on Greenspan--talk about a shellacking! He laid out the predictions Greenspan made over and over different administrations that all proved wrong. Then he quoted Greenspan talking as if he had not made that prediction but instead had predicted the actual outcome. The second chapter was the one above on the mortgage bubbles.
Taibbi's own predictions are depressing--that we tend not to learn from our previous failures and the few remaining big banks are set to go again with other bubbles.
What is really missing from this book are an index and more information about his sources. If as a journalist (Rolling Stone) he has sources he is protecting, he can still add relevant publications, books, articles, documents, lawsuits, etc.
I put off reading this book because the title sounded so gimmicky but then I read and heard more about it and realized I had been reading Taibbi's articles in Rolling Stone (magazine). He uses "down and dirty" language to document how greed and deliberate misrepresenting investments was wound all through the American financial institutes.
His explanation of the bundling of mortgages, re-bundling and re-rating the lower mortgages over and over actually made money with each resales. He has a chapter on Greenspan that is relentless! Just this night I saw Greenspan on a news program doing just what Taibbi said he has done throughout his career: claim he gave the right advice to Bush 43 to lower taxes but then when the deficits grew and grew, he said he knew then that taxes shouldn't have been lowered.
His documentation of Goldman Sachs long-time role in tearing down our economy and world economies is very persuasive. Today (June 30, 2011) headlines in NYT business section are about Goldman Sachs moving jobs overseas.
I am reading Mortgenson's and Rosner's Reckless Endangerment which is also clear and fits with Taibbi's. I am outraged that they did not cite Taibbi's articles or this book. Elitism?
Reckless Endangerment focuses more on Fannie Mae and Fannie Mac and their role. I thought the Fannies were funded by the US Government but they no longer are and yet they advertise their services as if they are.
July 13, 2019
Matt Taibbi sounds angry, and he has every right to be. Why did nobody shout stop?
The mortgage bubble came about through repackaging and reselling stinking clods of sure-to-defaults as gold bullion. Mortgages were given out in the first place under false pretences for commission and the buyers would never be able to repay once the real interest rate kicked in a few years later. One bank looked so worrying that the top-level investment house threatened to demand all their assets back in cash, which would have destroyed the insurances and pensions of the state of Texas. Other bankers were happily borrowing to gamble on whether prices would move up or down, borrowing shares to resell, and never at risk - but money was getting salted away and that money was coming out of someone's pockets.
So when it all fell apart, the pyramid schemes left householders out of pocket, out of home and out of creditworthiness. The government had to shore up banks and that left the government in massive debt, so unable to pay for healthcare.
American behaviour was also contagious, because you can read a similar account in Shane Ross's 'The Bankers' about Ireland of the same period.
I recommend reading this book, in instalments, and the complexities are well explained. You may also be interested in:
This Changes Everything, No Logo, Shock Doctrine by Naomi Klein, with No is Not Enough.
Disaster Capitalism
Rise of the Robots: Technology and the Threat of a Jobless Future
The Elements of Power: Gadgets, Guns, and the Struggle for a Sustainable Future in the Rare Metal Age
The Closing of the Net
This Machine Kills Secrets
People's Republic of Chemicals
Green Capital
Salt Sugar Fat
The Disaster Profiteers
The Price Of Thirst
Why It's Kicking Off Everywhere
Toms River
What Has Nature Ever Done For Us?
The mortgage bubble came about through repackaging and reselling stinking clods of sure-to-defaults as gold bullion. Mortgages were given out in the first place under false pretences for commission and the buyers would never be able to repay once the real interest rate kicked in a few years later. One bank looked so worrying that the top-level investment house threatened to demand all their assets back in cash, which would have destroyed the insurances and pensions of the state of Texas. Other bankers were happily borrowing to gamble on whether prices would move up or down, borrowing shares to resell, and never at risk - but money was getting salted away and that money was coming out of someone's pockets.
So when it all fell apart, the pyramid schemes left householders out of pocket, out of home and out of creditworthiness. The government had to shore up banks and that left the government in massive debt, so unable to pay for healthcare.
American behaviour was also contagious, because you can read a similar account in Shane Ross's 'The Bankers' about Ireland of the same period.
I recommend reading this book, in instalments, and the complexities are well explained. You may also be interested in:
This Changes Everything, No Logo, Shock Doctrine by Naomi Klein, with No is Not Enough.
Disaster Capitalism
Rise of the Robots: Technology and the Threat of a Jobless Future
The Elements of Power: Gadgets, Guns, and the Struggle for a Sustainable Future in the Rare Metal Age
The Closing of the Net
This Machine Kills Secrets
People's Republic of Chemicals
Green Capital
Salt Sugar Fat
The Disaster Profiteers
The Price Of Thirst
Why It's Kicking Off Everywhere
Toms River
What Has Nature Ever Done For Us?
March 3, 2017
Vintage Taibbi. He reminds me more and more of Hunter S. Thompson every time. This book doesn't offer a lot in the way of new information, for those that are keeping up on the financial crises.. it's mostly stuff Tabbi's blogged about and wrote about for Rolling Stone. If you do want a review of all that's wrong with America, then it's a very illuminating read. He just nails it. The two party political system that reduces all arguments to bumper-sticker level. The institutional cleptocracy where money dictate policy and policy makers later go on to earn lots of big money. The way the media dumbs it all down for ratings and sophisticated issues (like the use of derivatives in commodity trading) have no chance of being reported on.
I enjoyed it mainly because he writes so darn well. The chapter about Allen Greenspan (titled "the biggest asshole in the universe") is just gut-bustingly funny.
I enjoyed it mainly because he writes so darn well. The chapter about Allen Greenspan (titled "the biggest asshole in the universe") is just gut-bustingly funny.
January 5, 2012
4 ½ stars. A good book to read after Michael Lewis (also excellent) Big Short. I know the story and machinations behind housing bubble of 2008, Matt Taibbi adds his colorful and a funny language to this horror story. The commodities bubble chapter was best for me, since this subject has got a little notice in media or books. I have read many complains that Taibbi is not an economist and therefore is not qualified to write about banksters. Not true. Taibbi knows what he is writing, and how he describes an economy jargon is easy to understand, often when economist/finance expert writes he forgets 'normal people' and these synthetic-credit-default-swaps things does not make any sense. And i say again, it is funny book even while the subject matter is as dark as it gets.
January 20, 2011
Griftopia tries to explain the financial crisis as the fault of Alan Greenspan, Goldman Sachs and the financial industry. Unfortunately the roots of the crisis are more complex. The fact is that there is enough blame to go around. Government, banks and individual people made bad decisions that compounded over time. The author doesn't offer any solutions. Reading Griftopia will just make you angry. Getting through this crisis will take more than anger and finger-pointing. It will take serious reflection and a fundamental re-thinking of the rules of our economy.
August 19, 2021
An excellent clarion wake up call. The only thing missing in what I've read so far is any suggestion of solutions. How, if even possible, do we fight the oligarchy. It's clear the government isn't the answer. We have no real political power over those truly in power.
Until the real revolution vs "Wall Street" happens, I'm going to keep raising consciousness.
Until the real revolution vs "Wall Street" happens, I'm going to keep raising consciousness.
November 9, 2010
A few years ago, Matt Taibbi fretted about his career just a little in the preface to The Great Derangement: A Terrifying True Story of War, Politics and Religion (Spiegel & Grau, 2008). Referring to the period leading up to that work, he wrote:
“At the time I was a little depressed about the number of requests I was getting from editors to whale on people in print and was somewhat afraid that I was going to be buttonholed, professionally, into a role as a kind of lefty/alternative hatchet man—a liberal Ann Coulter. It didn’t help that I was secretly afraid that this very thing was my only salable skill in the American media market.”
And then a series of phenomenally crazy events transpired, the most important of which to Taibbi was probably the implosion of the American financial system in a grotesque Armageddon far beyond the comprehension of most ham-and-eggers. That moment of personal and professional candor provides a brief glimpse past the story into the reporter whose stories have driven the sharpest part of the cutting edge of our current media narrative. He needn’t worry about his skills any more.
The evidence is Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America. Since the now infamous “vampire squid” piece on Goldman Sachs (Rolling Stone 1082-83, July 9-23 2009), Taibbi’s earned an ever-growing army of devoted readers. His obvious glee for character assassination leavens down otherwise meticulous and dogged reporting. If he refers to Alan Greenspan as “the biggest asshole in the universe,” it’s because he promises to follow that up with a pile of supporting evidence.
As far as the craft of journalism goes, this is the best of the avant garde. Goldman Sachs CEO Lloyd Blankfein blunders into paying Taibbi an enormous backhanded compliment on the dust jacket of this very book, the irony of which is probably lost on Blankfein.
“Oddly enough, the Rolling Stone article tapped into something. I saw it as gonzo, over-the-top writing that some people might find fun to read. I was shocked that others saw it is being supporting evidence that Goldman Sachs had burned down the Reichstag, shot the Archduke Ferdinand, and fired on Fort Sumpter.”
How little he knows. For starters, Blankfein declines to say that Taibbi is wrong in his assertions, and tries to distract from the point with the unfunny Fort Sumter joke. More importantly, Taibbi is gonzo, in the best possible way. “When the going gets weird, the weird turn pro,” said Dr. Gonzo Hunter Thompson himself. It’s easy to imagine the good doctor approving of this brutal slam of the grifter pig-dogs.
Chrome-plated gonzo is what it ought to be called. The prose is crisp and clear, but not reductive. Purer, more objective information, less drug use. The perspective, what makes gonzo gonzo, is first person only when need be. A journalism professor I spoke with about Taibbi enthusiastically praised his style as the best way to report on complicated subjects, where the reporter’s position within the story is inextricable from the sourcing and the narrative. The passages Taibbi provides of straight reporter-interviewee dialogue are solid gold. This is a man who’s quick on his feet, equipped with a finely-tuned bullshit detector.
The opening of the book is pitch-perfect: jaded outsider as guest to the culture-war dogfights. The analysis of Sarah Palin and her appeal is keyed to a reader who follows the meta-narrative of politics. A good reporter should be above the clouds of the day-to-day news cycle, looking for longer trends. In retrospective, Palin’s us-vs.-them rhetoric is the perfect take-home of the 2008 electoral season, but then, as the reader is warming up for some good-time character assassination, Taibbi changes courses, gets serious, and begins to tell us why the Tea Party is irrelevant and how we’re all missing the big picture. And astute readers tune in there.
There are two important things about Griftopia. For Taibbi’s style, it’s that point where he (mostly) changes course from bludgeoning Palin and turns to deadly serious and breathless explanation of our “thief’s paradise.” It’s Sean Connery grabbing the bookkeeper by the collar and extorting a full explanation, the story that brings down the whole racket. From there on out, there are fewer jokes, and when they come, they’re mostly of the righteous indignation flavor (“But then the insurers were so brazen they denied coverage to Trent fucking Lott...”).
The main thing about Griftopia is that it comes closer than anything else thus far to really laying bare the whole scheme. Lately, Taibbi’s garnered comparisons to Michael Lewis, whose The Big Short is a fantastic primer on the rusty coat hangers used to abort the U.S. economy, but Lewis declines to venture into the dark back-alley of the political and cultural shitstorm that goes with his story.
In the title to the first chapter, Taibbi openly states that the Tea Party doesn’t matter. He then concedes (here, some of his fans are likely to sustain strokes) that the essential gripes of the Tea Party are valid, and sort of begins to offer examples of why. Hold onto that thought, because it turns out to be the crux of the whole story.
From the Tea Party, he backtracks to the cult of Ayn Rand, whose bloviation about the “virtues of selfishness” he ruthlessly dismantles with a little taste of the old Taibbi. As he criticizes Rand, he discusses her material with obvious familiarity. He may be a detractor, but it’s clear he’s actually read the books. This section could have used a little more attention, though, as the fetishizing of the Atlas Shrugged philosophy is pretty central to the machinations of the grifters.
The “biggest asshole in the universe” is none other than Alan Greenspan, whose career is characterized by social climbing, according to Ayn Rand’s own admission. So then, the supposed economic genius and architect of years of deregulation is essentially an ass-kisser? Specious attack, you might say. But then, Taibbi follows up with a systematic rending of a handful of Greenspan’s most erroneous predictions.
Then, he follows that story to its next logical stop: the deregulation and lead-up to the mortgage bubble of the 2000s. Here is where the story most closely resembles Lewis, but where Lewis focuses on the handful of small individuals who figured it out ahead of time, Taibbi focuses on the major players who played both sides of the deal. And here, casual readers are going to have to hunker down and work. This material is not simple, and despite the expert distillation of the author, it’s still as murky. But that’s not his fault.
From there, the next three chapters are tough going, because they veer the furthest from the immediate goal of tarring Goldman Sachs, and get into territory hitherto not considered germane to this particular issue. The wicked spike in oil prices in 2008? The budget-induced fire sale of American infrastructure? The mammoth, cynical giveaway of government power to the health insurance industry? Actually, all related to the “archipelago” of grifters, each throwing the occasional insignificant bone to their political patronage in exchange for the giveaways that make them rich.
Frankly, these chapters are a little dry and bereft of the usual gleeful firestarting of Taibbi’s magazine writing. And each of these issues could use a book-length explanation, so the reader is likely to want to hear more on each topic, since the author clearly knows the story. It ends up feeling like Taibbi is at once holding back and trying to carefully walk the line between being a reporter and a pundit, when his readers would love for him to do both.
The last chapter, “The Great American Bubble Machine,” is a rewrite and update of the original Rolling Stone piece. The author’s preface explains that he had to leave things out in the original story, and here circles back to deliver the coup de grâce. Here, in gory detail, Taibbi explains the incredible complexity of Goldman Sachs’ criminality. He points out the ballet of legal moves that kept the company alive, and then on top of the heap, following the meltdown of 2008. This one chapter alone makes the book worth the read, and it’s here that Taibbi delivers what his readers expect: one chisel blow after another.
Remember those other chapters and the original comment about the Tea Party’s inchoate rage? Those chapters are essential to the story, and when it swings back around to Goldman Sachs, this becomes totally clear. That, more than an assassination of Goldman, is the main strength of Griftopia. The bi-polar gripes: “corporate greed” from the left and “government interference” from the right, are together what Taibbi says we should be mad about. Corporate excess buys government interference, which in turn keeps the ideal free market from operating. When asked for the solution on NPR, he responded:
“I think we need to restore, first and foremost, good capitalist values. I mean, this is going to sound strange coming from someone who's been criticized as a socialist, but I really believe that if you just go with the absolute Adam Smith basics here and make sure the companies that aren't good businessmen, that they go under when they make mistakes.”
Barrons.com’s Ann C. Logue dismisses Griftopia off-handedly. “Alas, Taibbi has no solutions, and that makes the book simply sad and cynical.” A flippant observation from a mainstay of the business press: a fact which doesn’t escape Taibbi in his epilogue, where he briefly revisits the media narrative of these last few hectic years. As an apparent outsider, his reporting of the crisis is nose-thumbed by the established Wall Street press corps, but seems to ironically presage the later media open season on Goldman Sachs and the grifter firms in general. Perhaps it takes an outsider to clearly diagnose the huge systemic flaws in our system.
Griftopia is frightfully deep and dark stuff, and Taibbi deserves a pass for not providing an easy solution. Merely assembling this Byzantine and terrifying catalogue of filth must have been a Herculean effort, considering his reporting schedule with Rolling Stone. So, three or so years after The Great Derangement, Taibbi’s career worries may not have come true, but our national worst nightmares have. We should be glad, though, to have him here to tell us so.
“At the time I was a little depressed about the number of requests I was getting from editors to whale on people in print and was somewhat afraid that I was going to be buttonholed, professionally, into a role as a kind of lefty/alternative hatchet man—a liberal Ann Coulter. It didn’t help that I was secretly afraid that this very thing was my only salable skill in the American media market.”
And then a series of phenomenally crazy events transpired, the most important of which to Taibbi was probably the implosion of the American financial system in a grotesque Armageddon far beyond the comprehension of most ham-and-eggers. That moment of personal and professional candor provides a brief glimpse past the story into the reporter whose stories have driven the sharpest part of the cutting edge of our current media narrative. He needn’t worry about his skills any more.
The evidence is Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America. Since the now infamous “vampire squid” piece on Goldman Sachs (Rolling Stone 1082-83, July 9-23 2009), Taibbi’s earned an ever-growing army of devoted readers. His obvious glee for character assassination leavens down otherwise meticulous and dogged reporting. If he refers to Alan Greenspan as “the biggest asshole in the universe,” it’s because he promises to follow that up with a pile of supporting evidence.
As far as the craft of journalism goes, this is the best of the avant garde. Goldman Sachs CEO Lloyd Blankfein blunders into paying Taibbi an enormous backhanded compliment on the dust jacket of this very book, the irony of which is probably lost on Blankfein.
“Oddly enough, the Rolling Stone article tapped into something. I saw it as gonzo, over-the-top writing that some people might find fun to read. I was shocked that others saw it is being supporting evidence that Goldman Sachs had burned down the Reichstag, shot the Archduke Ferdinand, and fired on Fort Sumpter.”
How little he knows. For starters, Blankfein declines to say that Taibbi is wrong in his assertions, and tries to distract from the point with the unfunny Fort Sumter joke. More importantly, Taibbi is gonzo, in the best possible way. “When the going gets weird, the weird turn pro,” said Dr. Gonzo Hunter Thompson himself. It’s easy to imagine the good doctor approving of this brutal slam of the grifter pig-dogs.
Chrome-plated gonzo is what it ought to be called. The prose is crisp and clear, but not reductive. Purer, more objective information, less drug use. The perspective, what makes gonzo gonzo, is first person only when need be. A journalism professor I spoke with about Taibbi enthusiastically praised his style as the best way to report on complicated subjects, where the reporter’s position within the story is inextricable from the sourcing and the narrative. The passages Taibbi provides of straight reporter-interviewee dialogue are solid gold. This is a man who’s quick on his feet, equipped with a finely-tuned bullshit detector.
The opening of the book is pitch-perfect: jaded outsider as guest to the culture-war dogfights. The analysis of Sarah Palin and her appeal is keyed to a reader who follows the meta-narrative of politics. A good reporter should be above the clouds of the day-to-day news cycle, looking for longer trends. In retrospective, Palin’s us-vs.-them rhetoric is the perfect take-home of the 2008 electoral season, but then, as the reader is warming up for some good-time character assassination, Taibbi changes courses, gets serious, and begins to tell us why the Tea Party is irrelevant and how we’re all missing the big picture. And astute readers tune in there.
There are two important things about Griftopia. For Taibbi’s style, it’s that point where he (mostly) changes course from bludgeoning Palin and turns to deadly serious and breathless explanation of our “thief’s paradise.” It’s Sean Connery grabbing the bookkeeper by the collar and extorting a full explanation, the story that brings down the whole racket. From there on out, there are fewer jokes, and when they come, they’re mostly of the righteous indignation flavor (“But then the insurers were so brazen they denied coverage to Trent fucking Lott...”).
The main thing about Griftopia is that it comes closer than anything else thus far to really laying bare the whole scheme. Lately, Taibbi’s garnered comparisons to Michael Lewis, whose The Big Short is a fantastic primer on the rusty coat hangers used to abort the U.S. economy, but Lewis declines to venture into the dark back-alley of the political and cultural shitstorm that goes with his story.
In the title to the first chapter, Taibbi openly states that the Tea Party doesn’t matter. He then concedes (here, some of his fans are likely to sustain strokes) that the essential gripes of the Tea Party are valid, and sort of begins to offer examples of why. Hold onto that thought, because it turns out to be the crux of the whole story.
From the Tea Party, he backtracks to the cult of Ayn Rand, whose bloviation about the “virtues of selfishness” he ruthlessly dismantles with a little taste of the old Taibbi. As he criticizes Rand, he discusses her material with obvious familiarity. He may be a detractor, but it’s clear he’s actually read the books. This section could have used a little more attention, though, as the fetishizing of the Atlas Shrugged philosophy is pretty central to the machinations of the grifters.
The “biggest asshole in the universe” is none other than Alan Greenspan, whose career is characterized by social climbing, according to Ayn Rand’s own admission. So then, the supposed economic genius and architect of years of deregulation is essentially an ass-kisser? Specious attack, you might say. But then, Taibbi follows up with a systematic rending of a handful of Greenspan’s most erroneous predictions.
Then, he follows that story to its next logical stop: the deregulation and lead-up to the mortgage bubble of the 2000s. Here is where the story most closely resembles Lewis, but where Lewis focuses on the handful of small individuals who figured it out ahead of time, Taibbi focuses on the major players who played both sides of the deal. And here, casual readers are going to have to hunker down and work. This material is not simple, and despite the expert distillation of the author, it’s still as murky. But that’s not his fault.
From there, the next three chapters are tough going, because they veer the furthest from the immediate goal of tarring Goldman Sachs, and get into territory hitherto not considered germane to this particular issue. The wicked spike in oil prices in 2008? The budget-induced fire sale of American infrastructure? The mammoth, cynical giveaway of government power to the health insurance industry? Actually, all related to the “archipelago” of grifters, each throwing the occasional insignificant bone to their political patronage in exchange for the giveaways that make them rich.
Frankly, these chapters are a little dry and bereft of the usual gleeful firestarting of Taibbi’s magazine writing. And each of these issues could use a book-length explanation, so the reader is likely to want to hear more on each topic, since the author clearly knows the story. It ends up feeling like Taibbi is at once holding back and trying to carefully walk the line between being a reporter and a pundit, when his readers would love for him to do both.
The last chapter, “The Great American Bubble Machine,” is a rewrite and update of the original Rolling Stone piece. The author’s preface explains that he had to leave things out in the original story, and here circles back to deliver the coup de grâce. Here, in gory detail, Taibbi explains the incredible complexity of Goldman Sachs’ criminality. He points out the ballet of legal moves that kept the company alive, and then on top of the heap, following the meltdown of 2008. This one chapter alone makes the book worth the read, and it’s here that Taibbi delivers what his readers expect: one chisel blow after another.
Remember those other chapters and the original comment about the Tea Party’s inchoate rage? Those chapters are essential to the story, and when it swings back around to Goldman Sachs, this becomes totally clear. That, more than an assassination of Goldman, is the main strength of Griftopia. The bi-polar gripes: “corporate greed” from the left and “government interference” from the right, are together what Taibbi says we should be mad about. Corporate excess buys government interference, which in turn keeps the ideal free market from operating. When asked for the solution on NPR, he responded:
“I think we need to restore, first and foremost, good capitalist values. I mean, this is going to sound strange coming from someone who's been criticized as a socialist, but I really believe that if you just go with the absolute Adam Smith basics here and make sure the companies that aren't good businessmen, that they go under when they make mistakes.”
Barrons.com’s Ann C. Logue dismisses Griftopia off-handedly. “Alas, Taibbi has no solutions, and that makes the book simply sad and cynical.” A flippant observation from a mainstay of the business press: a fact which doesn’t escape Taibbi in his epilogue, where he briefly revisits the media narrative of these last few hectic years. As an apparent outsider, his reporting of the crisis is nose-thumbed by the established Wall Street press corps, but seems to ironically presage the later media open season on Goldman Sachs and the grifter firms in general. Perhaps it takes an outsider to clearly diagnose the huge systemic flaws in our system.
Griftopia is frightfully deep and dark stuff, and Taibbi deserves a pass for not providing an easy solution. Merely assembling this Byzantine and terrifying catalogue of filth must have been a Herculean effort, considering his reporting schedule with Rolling Stone. So, three or so years after The Great Derangement, Taibbi’s career worries may not have come true, but our national worst nightmares have. We should be glad, though, to have him here to tell us so.
February 26, 2011
This is a book that every American who is wondering what the hell is going on this country needs to read. Taibbi digs deep into the hot mess that is this country's financial system, to uncover how wall street and it's vile relationship with our government is literally stealing our wealth in a series of schemes that are so criminal in nature, to say they're unbelievable is a huge understatement.
If you've been trying to pay attention the past few years, trying to follow mass media to figure out how a few banks were allowed to tank our economy, and then take trillions of dollars in bailouts, pay themselves hundreds of millions in bonuses, and avoid jail, Taibbi lays it out in a concise series of investigations that manage to get deep into the guts of the blueprints of an economic system that incubated such a catastrophe, while managing to deal with it in a way all of us plebeians can understand.
This book is frightening. It's frightening enough that people who don't want to look at where our country is headed can easily enough wave it off as "conspiracy theory" only the problem is there's no conspiracy here. Taibbi uses interviews with industry insiders, and the recorded statements of the CEOs and government officials who perpetrated this crime on the american people to expose what is going on. The most frightening part is when you realize that the crises of 2008 isn't the first crises that has resulted from this criminal setup, and it most certainly isn't going to be the last.
The heart of Taibbi's thesis is how these industries have managed to completely rape the American dream while somehow passing it off as capitalism--which it isn't--how the government is so infested with industry cronies and bureaucratic inefficiencies it's completely powerless to stop it, and in some cases down right complicit in the crimes, and how in the meantime they've got the rest of us reduced to playing politics like they're some kind of sporting event, rooting for blue versus red and boiling down these insanely complex and nuanced crimes into an us vs. them fight that has us all so emotionally blinded by red herring sound byte politics that we're too paralyzed to demand the government stand up and actually do it's job.
And here also lies the book's biggest weakness. In terms of facts and figures, Taibbi is not playing partisan politics here. He indicts both sides of the aisle for getting us where we are. He is equally as critical of the Clinton and Obama administrations and the democrat-controlled congress as he is of republican leadership. He speaks openly about is own disillusionment with the entire bi-paritsan system. But in his tone and language, his historical liberal biases come blazing through. In the opening chapter he attempts to lay out an argument for how the elite in this country have taken the legitimate anger of the tea party movement, and completely neutered it in an elaborate shell game that has well-intentioned, concerned Americans barking up all the wrong trees. I 100% agree with this assessment, but Taibbi writes about the tea party movement with such offensive disdain that he immediately sours any chance of getting any of these people to pay attention to the rest of his argument, and that's a real shame, because these are the people Taibbi really should be hoping to win over with this book. They're the Americans that are upset enough to try to do something to change the system. IF he weren't so intent on insulting them on a such a base level, he might be able to get them to hear his arguments. But in the end he proves his own point about the state of bi-partisan politics in this country, that he can't control his own emotions enough to afford these people any respect whatsoever.
But regardless of his personal biases against conservative leadership, the heart of this book is not that conservatives are bad and liberals are good. His point is that a small group of people have hijacked our country while the rest of us scratch at each other's faces about mostly non-issue politics. When you read the brunt of his argument, only the most blinded libertarian extremists could possibly argue that the problem is that these industries are somehow over-regulated. In is epilogue he sums it up nicely:
we are faced with "A national economy in which the old Adam Smith capitalist notion of companies succeeding or failing on their merits, with the price of their assets determined entirely by the market, was tossed out the window. In its place was a system in which mergers and bankruptcies were brokered not by the market, but by government officials...and prices of assets were determined not by what investors were willing to pay, but by the level of political influence of the company's leaders."
If you've been trying to pay attention the past few years, trying to follow mass media to figure out how a few banks were allowed to tank our economy, and then take trillions of dollars in bailouts, pay themselves hundreds of millions in bonuses, and avoid jail, Taibbi lays it out in a concise series of investigations that manage to get deep into the guts of the blueprints of an economic system that incubated such a catastrophe, while managing to deal with it in a way all of us plebeians can understand.
This book is frightening. It's frightening enough that people who don't want to look at where our country is headed can easily enough wave it off as "conspiracy theory" only the problem is there's no conspiracy here. Taibbi uses interviews with industry insiders, and the recorded statements of the CEOs and government officials who perpetrated this crime on the american people to expose what is going on. The most frightening part is when you realize that the crises of 2008 isn't the first crises that has resulted from this criminal setup, and it most certainly isn't going to be the last.
The heart of Taibbi's thesis is how these industries have managed to completely rape the American dream while somehow passing it off as capitalism--which it isn't--how the government is so infested with industry cronies and bureaucratic inefficiencies it's completely powerless to stop it, and in some cases down right complicit in the crimes, and how in the meantime they've got the rest of us reduced to playing politics like they're some kind of sporting event, rooting for blue versus red and boiling down these insanely complex and nuanced crimes into an us vs. them fight that has us all so emotionally blinded by red herring sound byte politics that we're too paralyzed to demand the government stand up and actually do it's job.
And here also lies the book's biggest weakness. In terms of facts and figures, Taibbi is not playing partisan politics here. He indicts both sides of the aisle for getting us where we are. He is equally as critical of the Clinton and Obama administrations and the democrat-controlled congress as he is of republican leadership. He speaks openly about is own disillusionment with the entire bi-paritsan system. But in his tone and language, his historical liberal biases come blazing through. In the opening chapter he attempts to lay out an argument for how the elite in this country have taken the legitimate anger of the tea party movement, and completely neutered it in an elaborate shell game that has well-intentioned, concerned Americans barking up all the wrong trees. I 100% agree with this assessment, but Taibbi writes about the tea party movement with such offensive disdain that he immediately sours any chance of getting any of these people to pay attention to the rest of his argument, and that's a real shame, because these are the people Taibbi really should be hoping to win over with this book. They're the Americans that are upset enough to try to do something to change the system. IF he weren't so intent on insulting them on a such a base level, he might be able to get them to hear his arguments. But in the end he proves his own point about the state of bi-partisan politics in this country, that he can't control his own emotions enough to afford these people any respect whatsoever.
But regardless of his personal biases against conservative leadership, the heart of this book is not that conservatives are bad and liberals are good. His point is that a small group of people have hijacked our country while the rest of us scratch at each other's faces about mostly non-issue politics. When you read the brunt of his argument, only the most blinded libertarian extremists could possibly argue that the problem is that these industries are somehow over-regulated. In is epilogue he sums it up nicely:
we are faced with "A national economy in which the old Adam Smith capitalist notion of companies succeeding or failing on their merits, with the price of their assets determined entirely by the market, was tossed out the window. In its place was a system in which mergers and bankruptcies were brokered not by the market, but by government officials...and prices of assets were determined not by what investors were willing to pay, but by the level of political influence of the company's leaders."
December 3, 2011
before griftopia, i used to think of matt taibbi as something of a guilty pleasure. he's always been better than the average left/progressive pundit at grasping the ugly class snobbery behind a lot of our disdain for the tea party, and his writing reliably mirrors my own political beliefs with more exciting bombast than, say, paul krugman. put differently, he's someone i have typically turned to for catharsis and schadenfreude rather than information.
with that in mind, i'm happy to say that griftopia is a surprisingly substantive take-down of the near-satanic behavior we've seen on wall street over the past thirty years. better still, it's the kind of no-bullshit journalism that may actually make a difference when all is said and done. i'm thinking specifically of his "great american bubble machine" chapter, which helped initiate an avalanche of horrible press for the criminals at goldman sachs when it appeared in rolling stone about a year and a half ago. months later, goldman CEO lloyd blankfein would be making an ass of himself at a senate hearing... and a few months after that, everyday people would be occupying wall street indefinitely. taibbi isn't directly responsible for any of this, but he's stirring the pot in a more substantial way than, like, keith olbermann or whoever.
in addition, griftopia does a credible job of making this stuff digestible and accessible. which doesn't mean that it's an easy read. if anything, taibbi's snarky, unpretentious approach further proves that there is NO WAY WHATSOEVER to make the financial crisis easily understood. sooner or later, if you aren't a day trader, economist or criminal, sorting out the differences between collateralized debt obligations and credit default swaps (and so forth) is going to leave your head spinning. but if you're willing to put yourself through it, you might as well get a few mean-spirited belly laughs along the way, which taibbi offers again and again with great panache.
griftopia isn't limited to the stuff that dominated the news in 2008. there's a particularly compelling chapter about the commodity index market (he'll explain what that is, don't worry) and its adverse affect on gas and food prices. shortly after, he offers an informative, if slightly underdeveloped, chapter about the privatization of city assets (like chicago's parking meters), and their sale to suspiciously anonymous investors. there's even a chapter devoted to obamacare, outlining the myriad sell-outs the obama administration (rahm emmanuel especially) made to insurance companies and opportunistic, "centrist" democrats before finally passing the act in its weakened, wishy-washy state.
my paperback version also includes two follow-up essays which are worth reading, and the intro he wrote to them is really top notch. in it, he compares the rhetoric surrounding the financial crisis to that of the drug war. taibbi notes our readiness to punish low-level drug traffickers with draconian wraith - and its strong contrast to our reluctance to regulate the so-called "job creators" who tore apart our financial system and were bailed out for the damage. taibbi is often criticized for his tone (swear words! oh no!), but he argues not only for a change in rhetoric - but also for an abandonment of the usual left/right media spectacles that distract us from more substantial issues. griftopia's "bi-partisan" approach isn't 100% effective - the fever for deregulation really is a right wing problem in its heart of hearts (though the clinton administration deserves a LOT of the blame for the corruption that lead to the current recession), and occasionally taibbi dismisses things that are worthy of substantial debate (immigration especially). but as a u.s. citizen, it's tough not to feel like i live in a full-blown oligarchy by the end of this book. and if real reform is still possible, it's probably worthwhile to dwell on that feeling and allow myself to be angered by it.
with that in mind, i'm happy to say that griftopia is a surprisingly substantive take-down of the near-satanic behavior we've seen on wall street over the past thirty years. better still, it's the kind of no-bullshit journalism that may actually make a difference when all is said and done. i'm thinking specifically of his "great american bubble machine" chapter, which helped initiate an avalanche of horrible press for the criminals at goldman sachs when it appeared in rolling stone about a year and a half ago. months later, goldman CEO lloyd blankfein would be making an ass of himself at a senate hearing... and a few months after that, everyday people would be occupying wall street indefinitely. taibbi isn't directly responsible for any of this, but he's stirring the pot in a more substantial way than, like, keith olbermann or whoever.
in addition, griftopia does a credible job of making this stuff digestible and accessible. which doesn't mean that it's an easy read. if anything, taibbi's snarky, unpretentious approach further proves that there is NO WAY WHATSOEVER to make the financial crisis easily understood. sooner or later, if you aren't a day trader, economist or criminal, sorting out the differences between collateralized debt obligations and credit default swaps (and so forth) is going to leave your head spinning. but if you're willing to put yourself through it, you might as well get a few mean-spirited belly laughs along the way, which taibbi offers again and again with great panache.
griftopia isn't limited to the stuff that dominated the news in 2008. there's a particularly compelling chapter about the commodity index market (he'll explain what that is, don't worry) and its adverse affect on gas and food prices. shortly after, he offers an informative, if slightly underdeveloped, chapter about the privatization of city assets (like chicago's parking meters), and their sale to suspiciously anonymous investors. there's even a chapter devoted to obamacare, outlining the myriad sell-outs the obama administration (rahm emmanuel especially) made to insurance companies and opportunistic, "centrist" democrats before finally passing the act in its weakened, wishy-washy state.
my paperback version also includes two follow-up essays which are worth reading, and the intro he wrote to them is really top notch. in it, he compares the rhetoric surrounding the financial crisis to that of the drug war. taibbi notes our readiness to punish low-level drug traffickers with draconian wraith - and its strong contrast to our reluctance to regulate the so-called "job creators" who tore apart our financial system and were bailed out for the damage. taibbi is often criticized for his tone (swear words! oh no!), but he argues not only for a change in rhetoric - but also for an abandonment of the usual left/right media spectacles that distract us from more substantial issues. griftopia's "bi-partisan" approach isn't 100% effective - the fever for deregulation really is a right wing problem in its heart of hearts (though the clinton administration deserves a LOT of the blame for the corruption that lead to the current recession), and occasionally taibbi dismisses things that are worthy of substantial debate (immigration especially). but as a u.s. citizen, it's tough not to feel like i live in a full-blown oligarchy by the end of this book. and if real reform is still possible, it's probably worthwhile to dwell on that feeling and allow myself to be angered by it.
November 7, 2011
Brilliant, thorough, very clear, and infuriating, also less floridly reminiscent of Hunter Thompson and Michael Moore than some of Matt Taibbi's other work. In this book Taibbi carefully explains, in plain English understandable to readers like me without a background in business or economics, how a combination of big corporations and the legislators who owe their positions of power to the campaign funding they get from those corporations have been systematically rigging the American and world economic systems more and more in favor of those corporations and the very rich - reducing their tax burden and increasing those of the middle class and the working poor; dismantling the financial regulatory system put in place after the Crash of 1929 to prevent the kind of speculation that led to that economic catastrophe and the years of Great Depression that followed; destroying the network of laws enacted to protect the public and environment from abuse by big business; and so on.
Essentially, it's a damning and nonpartisan portrait (the Bush and Obama administrations are shown to be equally corrupt from their respective beginnings) of an oligarchic class of white-collar sociopaths that have managed to take control of the U.S. government and the world economy in a sort of near-invisible hostile takeover and are robbing the rest of us blind, while arranging irrelevant political Punch-and-Judy shows and movements pitting parts of the electorate against each other (examples: the Tea Party and MoveOn) to keep them from realizing they should be uniting to go after the real villains.
I have never seen more convincing data supporting the argument that it's time for a new, genuinely populist major party in American politics that represents ordinary people - the other 98% or 99%, depending on whose figures you're looking at.
Before you decide what politicians to support in future elections with your campaign contributions, volunteer efforts, or vote, please read this book.
Essentially, it's a damning and nonpartisan portrait (the Bush and Obama administrations are shown to be equally corrupt from their respective beginnings) of an oligarchic class of white-collar sociopaths that have managed to take control of the U.S. government and the world economy in a sort of near-invisible hostile takeover and are robbing the rest of us blind, while arranging irrelevant political Punch-and-Judy shows and movements pitting parts of the electorate against each other (examples: the Tea Party and MoveOn) to keep them from realizing they should be uniting to go after the real villains.
I have never seen more convincing data supporting the argument that it's time for a new, genuinely populist major party in American politics that represents ordinary people - the other 98% or 99%, depending on whose figures you're looking at.
Before you decide what politicians to support in future elections with your campaign contributions, volunteer efforts, or vote, please read this book.
March 27, 2016
We Live In An Era of Fraud.
This is a superb book! Please read it. I can't recommend it enough. This book and The Divide (also by Matt Taibbi) are crucial reading. If you haven't seen the movie "The Big Short" - it's not a bad place to start. Follow up with these earth trembling reads.
Learn how your country works (or doesn't work)! See for yourself just how broken our system is. As quoted in The Big Short: "We live in an era of fraud." Too true, my friends. Too true.
Just when you think banks like these will be held accountable for all their theft and criminality, we find it's simply "Back to business as usual..."
"The financial crisis was far too messy to fit into the usual "left" "right" soundbites."
"What the bank does is indefensible. They're criminals. And if you put what they do in front of enough eyes, even Americans can't miss it. So we know that now..."
"Banks like Goldman remain largely shielded from the impact of public opinion, because while the public's only to link to power is through clumsy and highly imperfect avenue of elections, a bank of this size has a whole network of intimate connections with direct access to policy. In many cases, their people are sitting in the relevant positions themselves, and while the public at best is left to press their elected representatives who inevitably are heavily funded by these banks for investigations or prosecutions to remedy offenses committed years ago the bank has already moved on to five six seven new schemes since then each shrouded in a layer of complexity that will take years for the public consciousness to even begin to penetrate. But at least the mystique is gone. **The drivers of the great american bubble machine aren't producers, but takers. And we know that now. The only question is: what do we do about it?**" - Matt Taibbi
This is a superb book! Please read it. I can't recommend it enough. This book and The Divide (also by Matt Taibbi) are crucial reading. If you haven't seen the movie "The Big Short" - it's not a bad place to start. Follow up with these earth trembling reads.
Learn how your country works (or doesn't work)! See for yourself just how broken our system is. As quoted in The Big Short: "We live in an era of fraud." Too true, my friends. Too true.
Just when you think banks like these will be held accountable for all their theft and criminality, we find it's simply "Back to business as usual..."
"The financial crisis was far too messy to fit into the usual "left" "right" soundbites."
"What the bank does is indefensible. They're criminals. And if you put what they do in front of enough eyes, even Americans can't miss it. So we know that now..."
"Banks like Goldman remain largely shielded from the impact of public opinion, because while the public's only to link to power is through clumsy and highly imperfect avenue of elections, a bank of this size has a whole network of intimate connections with direct access to policy. In many cases, their people are sitting in the relevant positions themselves, and while the public at best is left to press their elected representatives who inevitably are heavily funded by these banks for investigations or prosecutions to remedy offenses committed years ago the bank has already moved on to five six seven new schemes since then each shrouded in a layer of complexity that will take years for the public consciousness to even begin to penetrate. But at least the mystique is gone. **The drivers of the great american bubble machine aren't producers, but takers. And we know that now. The only question is: what do we do about it?**" - Matt Taibbi
June 25, 2013
Matt Taibbi, an artist of analogy, here is one of my favorites.
You will often hear pundits asking with straight faces, certain rhetorical questions about the issue of punishment for financial crime. "What good would it d," they ask, to put this or that banker CEO in jail for fraud? After all, they say, giving a Dick Fuld or John Thain jail time "won't change anything."
Which is an interesting point, but consider this: when was the last time anyone stood up at a car thief's trial and argued that jail time wasn't warranted because putting the defendant in jail wouldn't end car theft? We don't make the argument because it's absurd: that's not how we measure justice. The chief problem of the financial crisis is that it has made inequality systematic and created two political systems, one for Wall Street and one for everybody else, a financially torturable class. The country has underlying economic problems for sure, and those will be difficult to untangle, but the inequality problem can be fixed relatively quickly. If we force people on Wall Street to live under our laws and our criminal justice system, who knows - they may even start to see themselves as citizens of the same country. And behave accordingly.
You will often hear pundits asking with straight faces, certain rhetorical questions about the issue of punishment for financial crime. "What good would it d," they ask, to put this or that banker CEO in jail for fraud? After all, they say, giving a Dick Fuld or John Thain jail time "won't change anything."
Which is an interesting point, but consider this: when was the last time anyone stood up at a car thief's trial and argued that jail time wasn't warranted because putting the defendant in jail wouldn't end car theft? We don't make the argument because it's absurd: that's not how we measure justice. The chief problem of the financial crisis is that it has made inequality systematic and created two political systems, one for Wall Street and one for everybody else, a financially torturable class. The country has underlying economic problems for sure, and those will be difficult to untangle, but the inequality problem can be fixed relatively quickly. If we force people on Wall Street to live under our laws and our criminal justice system, who knows - they may even start to see themselves as citizens of the same country. And behave accordingly.
June 3, 2014
Griftopia is Taibbi’s sour take on the financial crisis and its aftermath. He reviews what he calls the “grifter era” where everyone in government and business has moved towards seeking a fast buck instead of long term planning. Pennsylvania attempts to sell its turnpike, and Chicago does sell its parking meters to fill a one year budget gap(for a 75 year lease) This resembles the sacking of a crumbling empire rather than a plan for continued business. He treats the bailouts, the Tea Party, Affordable Care Act(which has done nothing to break up the insurance cartels and is many ways a gift to them) with scorn, disgust and also compassion. The consensus between the two parties to back up business at every turn while keeping people squabbling over social issues is creating a culture of cynicism and corruption truly alienated from democratic impulse.
May 4, 2019
This book was written in 2010 - two years after the 2008 world economic crash - and attempts to tie together government corruption with Wall St excess/greed, as a way of explaining how and why the crash occurred. It's quite technical at times, and at times left me rather dazed - because the scams Wall St banks like Goldman Sachs are quite complex. The book is really a recounting of the varieties of scams that were used to defraud consumers, municipalities, states, even countries (like Greece) - that led up to the crash, as well as prior bubbles/crashes like the Dot.Com crash. The descriptions of political factions in Washington fighting over bailouts, or Obamacare, are hilarious at times (in retrospect), since much the same fights are occurring today, with the parties of course reversed. I found this book of value, since my knowledge of the financial frauds was sketchy at best; I was still employed at the time of the crash although I too ended up accepting retirement in 2011 (actually, laid off, since I didn't wish to retire).
There are tons of quotes that I wish to note here but I may not get to them all since this book is due at the library tomorrow... Oh, well.
"The root cause of all these [2008] Wall St brokerage house disasters was the unraveling of a massive Ponzi scheme centered around the American real estate market, a huge bubble of investment fraud that floated the American economy for the better part of a decade."
"Inclusiveness, telegenic warmth, and inoffensiveness are the usual currency of national-campaign candidates."
"[Sarah Palin's 2008 "outreach" to middle Americans is] ... a virtual copy of Dick Nixon's "forgotten Americans" gambit targeting the so-called silent majority -- the poor and middle-class suburban (and especially southern) whites who had stayed on the sidelines during he sixties culture wars."
"The strategy of stoking exurban white resentment against encroaching immigration, against the disappearance of old values, against pop-culture glitz, against government power, it all worked so well for the Republicans over the years that even Hillary Clinton borrowed it in her primary race against Obama."
"...cultural civil war, you have that no matter how broke you are."
"The presidential election is a drama that we Americans have learned to wholly consume as entertainment, divorced completely from any expectations about concrete changes in our own lives."
"In the new American ghetto, the nightmare engine is bubble economics, a kind of high-tech casino scam that kills neighborhood just like dope does, only the product is credit, not crack or heroin."
"We don't get real political movements and real change; what we get, instead, are crass show-business manipulations whose followers' aspirations are every bit as laughable and desperate as the wealth dreams of the street hustler with his gold rope."
"...the top 1 percent has seen its share of the nation's overall wealth jump from 34.6 percent before the crisis, in 2007, to over 37.1 percent in 2009."
"If you want to understand why America is such a paradise for high-class thieves, just look at the way a manufactured movement like the Tea Party corrals and neutralizes public anger that otherwise should be sending pitchforks in the direction of downtown Manhattan."
"So long as this stuff is not widely understood by the public, the Grifter class is going to skate on almost anything it does -- because the tendency of most voters, in particular conservative voters, is to assume that Wall Street makes its money engaging in normal capitalist business and that any attempt to restrain that sector of the economy is thinly disguised socialism."
"...the Tea Party has made anti-intellectualism itself a rallying cry."
"Even as [Michelle Bachmann] spends every day publicly flubbing political SAT questions, she's always dead-on when it comes to her basic message, which is that government is always the problem and there are no issues the country has that can't be worked out with basic common sense..."
"...Bachmann emerged in the summer of 2010... as one of the fiercest opponents of financial regulatory reform..."
"Our world isn't about ideology anymore. It's about complexity."
"[Bachmann:] "I don't want the United States to be in a global economy..."
"Getting ordinary Americans to emotionally identify in this way with the political wishes of their bankers and credit card lenders and mortgagors is no small feat, but it happens -- with a little help."
"What [Tea Partiers] ... are, and they don't realize it, is an anachronism. They're fighting a 1960s battle in a world run by twenty-first-century crooks."
"[In]...Nevada, I found a broad spectrum of people under the same [Tea Party] banner -- from dyed -in-the-wool Ron Paul libertarians who believe in repealing drug laws and oppose the Iraq and Afghan wars, to disaffected George Bush/mainstream Republicans reinventing themselves as anti-spending fanatics, to fundamentalist Christians buzzed by the movement's reactionary anger and looking to latch on to the "values" portion of the Tea Party message, to black-helicopter types and gun crazies volunteering to organize the bunkers and whip up the canned food collection in advance of the inevitable Tea Party revolution."
"A loose definition of the Ta Party might fifteen million pissed-off white people sent chasing after Mexicans on Medicaid by the small handful of banks and investment companies who advertise on Fox and CNBC."
"...CNBC is more or less openly a propaganda organ for rapacious Wall Street banks, funded by ad revenue from the financial services industry."
"...one of the key psychological characteristics of the Tea Party is its oxymoronic love of authority figures couples with a narcissistic celebration of its own "revolutionary" defiance."
"...their willingness to take orders has allowed them to organize effectively..."
"[In February 2008]... riots had broken out in counties all over the world, including India, Haiti, and Mexico, thanks to the soaring costs of foods like bread and rice -- and the big banks themselves even admitted at the time that the cause for this was a speculative bubble."
"In 2004 the five biggest investment banks in the country (at the time, Merrill Lynch, Goldman, Morgan Stanley, Lehman Brothers, and Bear Stearns) had gone to then-SEC chairman William Donaldson and personally lobbied to remove restrictions on borrowing so that they could bet even more of whatever other peoples' money they happened to be holding on bullshit investments like mortgage-backed securities."
"[The Tea Party provided]... a place to focus their anger away from the financial services industry, and away from the genuinely bipartisan effort to subsidize Wall Street."
"It was classic race politics -- the plantation owner keeping the seemingly inevitable pitchfork out of his abdomen by pitting poor whites against poor blacks. And it worked, big-time."
"[The Tea Party] ...is like a mass exercise in narcissistic personality disorder, so intensely focused on itself and its won hurt feelings that it can't even recognize the lunacy of a bunch of middle-class white people nodding in agreement at the idea that Black History Month doesn't do enough to celebrate nice white people."
"[The] ...origins [of the Tea Party]... are steeped in a gigantic exercise in delusional self-worship."
"They're lonely martyrs to the lost national ethos of industriousness and self-reliance, whose only reward for their Herculean labors is the bleeding of their tax money for welfare programs -- programs that of course will be consumed by ungrateful minorities who hate America and white people and love Islamic terrorists."
"[Westchester County Tea Partiers'] ...rallying cry was a lawsuit filed jointly by a liberal nonprofit group in New York City and the Department of Housing and Urban Development against the county. The suit alleged that Westchester falsified HUD grant applications asking or federal grant money without conforming to federal affirmative action guidelines designed to push desegregation."
"To the Tea Partiers, this is a simple case of taxation without representation."
"[Tea Partiers believe] ... the Obama health care plan... is the first step in a long-range plan to eliminate the American free enterprise system and install a Trotskyite dictatorship."
"Most of the Tea Partiers view national politics through the prism of what they have seen, personally, in their own communities: intrusive government and layer upon layer of regulatory red tape."
"Your average working American looks around and sees evidence of government power over his life everywhere."
"...they think the same dynamic they see locally or in their own lives -- an overbearing, interventionist government that seeks to control, tax, and regulate everything it can get its hands on -- operates the same everywhere."
"The grifter class... ....[wants] the average American to believe that what government is to him, it is also to JP Morgan Chase and Goldman Sachs."
"The fact hat an unapologetic fat cat like [CNBC's Larry] Kudlow -- one who talks and acts and dresses like a fat cat -- can, when convenient, throw on the mantle of a populist revolt and get away with it reassures us that for all the talk about pitchforks and revolutions and fighting back, the Tea Party movement remains in thrall to the authority of the rich and powerful. Which renders the so-called movement completely meaningless."
"Even after the rich almost destroyed the entire global economy through their sheet unrestrained greed and stupidity, we can't shake the peasant mentality that says we should go easy on them, because the best hope for our collective prosperity is in them creating wealth for us all."
"What has taken place over the last generation is a highly complicated merger of crime and policy, of stealing and government."
"But our politics...is silent about this."
"The right is eternally fighting against Lyndon Johnson; the left, George Wallace."
"The new America...is fast becoming a vast ghetto in which all of us, conservatives and progressives, are being bled dry by a relatively tiny oligarchy of extremely clever financial criminals and their castrato henchmen in government, whose main job is to be good actors on TV and put on a good show."
"...those unseen labyrinths of the Grifter Archipelago that are indifferent to party affiliation, are our real politics."
"...since Americans require the illusion of self-government, we have elections."
"...millions of tenuously middle-class voters are conned into pushing Wall Street's own twisted greed ethos as though it were their own."
"[Former Federal Reserve chief Alan] Greenspan was ...the perfect front man for the hijacking of the democratic process that took place in the eighties, nineties, and the early part of the 2000s."
"[Greenspan's]...career is the perfect prism though which one can see the twofold basic deception of American politics; a system that preaches sink-or-swim laissez-faire capitalism to most but acts as a highly interventionist, bureaucratic welfare state for a select few."
"[The Ayn Rand sponsored] ...meetings of the "Collective" would have an enormous impact on American culture by birthing a crackpot anti-theology dedicated to legitimizing relentless self-interest -- a grotesquerie called objectivism that hit the Upper East Side cocktail party circuit hard in the fifties and sixties."
"...this lunatic religion [of objectivism] that should have choked to death in its sleep decades ago would go on, thanks in large part to Greenspan, to provide virtually the entire intellectual context for the financial disasters of the early twenty-first century."
"Since being in tune with how things look to other people is a big part of that magical unspoken connection many people share called a sense of humor, the "metaphysics" of objectivism go a long way toward explaining why there has never in history been a funny objectivist."
"Rand, like all great con artists, was exceedingly clever in the way she treated the question of how her ideas would be employed."
"...where do the rest of us look in the Yellow Pages to hire private protection against insider trading?"
"[Objectivism]...was incoherent and entirely subjective."
"Rand's objectivists were very strongly opposed to the very concept ...that allowed a federally appointed banking official -- the Federal Reserve chairman -- to control the amount of money in the economy."
"...Greenspan did something that was anathema to any good Randian's beliefs: he went to work for a politician."
"...Greenspan managed to become famous for being famous..."
"Like the Maharishi, Greenspan got this foot in the big door by dazzling deluded celebrities with voluble pseudo-mystical nonsense."
"...laughs economist Brain Wesbury today. "...if you look at his record, he was wrong about almost everything he ever predicted."
"...Greenspan's errors were often historic, idiotic blunders..."
"Before the S&L crisis exploded Greenspan could be seen giving a breezy thumbs-up to now-notorious swindler Charles Keating, whose balance sheet Greenspan had examined..."
"...it wasn't Greenspan's economic skill that got him to the top banker job."
"Greenspan had proved his worth to Reagan by using a commission he headed to perform one of the all-time budgetary magic tricks, an invisible tax hike that helped the supposedly anti-tax Reagan administration fund eight years of massive deficit spending."
"...Social Security taxes are very regressive, among other things because they only apply to wage income..."
"...Greenspan and Reagan...conspired to hike Social Security payments, justifying it with the promise of building up a Social Security nest egg for subsequent decades, then used up that nest egg on current government spending."
"...Greenspan hikes Social Security taxes by a trillion and half dollars or so, four presidents spend all that money on other shit (including, in George W. Bush's case, a massive tax cut for the wealthy), and then, when it comes time to start paying out those promised benefits, Greenspan announces that it can't be afforded, the money isn't there, benefits can't be paid out."
"...how the bubble economy works..."
"...every time the bubble bursts and the gamblers all go belly-up , the house is allowed to borrow giant piles of money from the state for next to nothing."
"...each time the bubble burst Greenspan and the Fed swept in to save the day by printing vast sums of money and dumping it back on Wall Street, in effect encouraging people to "drink themselves sober," as Greenspan biographer William Fleckenstein put it."
"The Fed gets its pseudo-religious aura from its magical ability to create money out of nothing, or to contact the money supply as it sees fit."
"One way that money is created is through new issuance of private credit..."
"The bank can also inject money into the system directly, mainly through two avenues. One is by lending money directly to banks at a thing called the discount window, which allows commercial banks to borrow from the Fed at relatively low rates to cover short-term financing problems. the other avenue is for the Fed to buy Treasury bills or bonds from banks or brokers."
"In recent times, thanks to...quantitative easing, the Fed has gotten into the habit of buying more than just T-bills and is printing billions of dollars every week to buy private assets like mortgages."
"...the Fed has enormous power to create money both by injecting it directly into the system and by allowing private banks to create their own new loans."
"If you have a productive economy and an efficient financial services industry...that stimulative power of a central bank can be a great thing."
"[Greenspan's] ...response to...the 1987 crash...[and] the recession of the early 1990s, brought about by the collapse of the S&L industry...[was to] slash the federal funds rate and flood... the economy with money."
"In January 2000, Greenspan [said]... "We may conceivably conclude from that vantage point hat, at the turn of the millennium, the American economy was experiencing a once-in-a century acceleration of innovation, which propelled forward productivity..."
"...from February 1996 through October 1999, Greenspan expanded the money supply by about $1.6 trillion, or roughly 20 percent of GDP."
"As [Greenspan] ...put it during the boom: "[There is] an ever increasing conceptualization of our Gross Domestic Product -- the substitution, in effect, of ideas for physical value."
"Greenspan's endorsement of the "new era" paradigm encouraged all the economic craziness of the tech bubble."
"By the turn of the century, the effect of Greenspan's constant money printing was definite and contagious, as it was now widely understood that every fuckup would be bailed out by rivers of cheap cash."
"...says [Iowa professor Paul] Weller now. "There was this belief that the Fed would always provide a floor to the market."
"The idea that Greenspan not even covertly but overtly encouraged irresponsible speculation to a monstrous degree is no longer terribly controversial in the financial world."
"...he was also working round the clock, with true Randian zeal, to destroy the government's regulatory infrastructure."
"He wanted a government that was utterly powerless to interfere in the workings of private business..."
"Greenspan's reigning achievement in this area was his shrewd undermining of the Glass-Steagall Act, a Depression-era law that barred insurance companies, investment banks, and commercial banks from merging."
"...Glass-Steagall had helped prevent exactly the sort of situation we found ourselves subject to in 2008..."
"Gramm-Leach-Bliley...became law, a move that would lead directly to the disasters of 2008."
"...Greenspan et al.... eventually succeeded ....in passing a monstrosity called the Commodity Futures Modernization Act of 2000, which affirmatively deregulated the derivatives market."
"...credit default swaps ...allowed companies to sell something like insurance protection without actually having the money to pay that insurance..."
"[Michael] Greenberger [at the time the head of the CFTC's Division of Trading and Markets says] "These guys were selling insurance without being capitalized."
"AIG...imploded in 2008 after selling nearly a half billion dollars' worth of insurance despite having practically no money to pay off those bets..."
"Nevertheless, Greenspan just months after this collapse said that regulators' risk models were "much less accurate than banks' risk measurement models."
"In February 1999, Time magazine even put him on the cover, flanked by Clinton officials Bob Rubin and Larry Summers..."
"[Greenspan] ...had used the Fed's power to turn himself into the great indispensable superhero of the investor class..."
"...when it came to using the Fed's powers to rein in abuses, [Greenspan] ...proclaimed helplessness before the forces of the free market."
"
There are tons of quotes that I wish to note here but I may not get to them all since this book is due at the library tomorrow... Oh, well.
"The root cause of all these [2008] Wall St brokerage house disasters was the unraveling of a massive Ponzi scheme centered around the American real estate market, a huge bubble of investment fraud that floated the American economy for the better part of a decade."
"Inclusiveness, telegenic warmth, and inoffensiveness are the usual currency of national-campaign candidates."
"[Sarah Palin's 2008 "outreach" to middle Americans is] ... a virtual copy of Dick Nixon's "forgotten Americans" gambit targeting the so-called silent majority -- the poor and middle-class suburban (and especially southern) whites who had stayed on the sidelines during he sixties culture wars."
"The strategy of stoking exurban white resentment against encroaching immigration, against the disappearance of old values, against pop-culture glitz, against government power, it all worked so well for the Republicans over the years that even Hillary Clinton borrowed it in her primary race against Obama."
"...cultural civil war, you have that no matter how broke you are."
"The presidential election is a drama that we Americans have learned to wholly consume as entertainment, divorced completely from any expectations about concrete changes in our own lives."
"In the new American ghetto, the nightmare engine is bubble economics, a kind of high-tech casino scam that kills neighborhood just like dope does, only the product is credit, not crack or heroin."
"We don't get real political movements and real change; what we get, instead, are crass show-business manipulations whose followers' aspirations are every bit as laughable and desperate as the wealth dreams of the street hustler with his gold rope."
"...the top 1 percent has seen its share of the nation's overall wealth jump from 34.6 percent before the crisis, in 2007, to over 37.1 percent in 2009."
"If you want to understand why America is such a paradise for high-class thieves, just look at the way a manufactured movement like the Tea Party corrals and neutralizes public anger that otherwise should be sending pitchforks in the direction of downtown Manhattan."
"So long as this stuff is not widely understood by the public, the Grifter class is going to skate on almost anything it does -- because the tendency of most voters, in particular conservative voters, is to assume that Wall Street makes its money engaging in normal capitalist business and that any attempt to restrain that sector of the economy is thinly disguised socialism."
"...the Tea Party has made anti-intellectualism itself a rallying cry."
"Even as [Michelle Bachmann] spends every day publicly flubbing political SAT questions, she's always dead-on when it comes to her basic message, which is that government is always the problem and there are no issues the country has that can't be worked out with basic common sense..."
"...Bachmann emerged in the summer of 2010... as one of the fiercest opponents of financial regulatory reform..."
"Our world isn't about ideology anymore. It's about complexity."
"[Bachmann:] "I don't want the United States to be in a global economy..."
"Getting ordinary Americans to emotionally identify in this way with the political wishes of their bankers and credit card lenders and mortgagors is no small feat, but it happens -- with a little help."
"What [Tea Partiers] ... are, and they don't realize it, is an anachronism. They're fighting a 1960s battle in a world run by twenty-first-century crooks."
"[In]...Nevada, I found a broad spectrum of people under the same [Tea Party] banner -- from dyed -in-the-wool Ron Paul libertarians who believe in repealing drug laws and oppose the Iraq and Afghan wars, to disaffected George Bush/mainstream Republicans reinventing themselves as anti-spending fanatics, to fundamentalist Christians buzzed by the movement's reactionary anger and looking to latch on to the "values" portion of the Tea Party message, to black-helicopter types and gun crazies volunteering to organize the bunkers and whip up the canned food collection in advance of the inevitable Tea Party revolution."
"A loose definition of the Ta Party might fifteen million pissed-off white people sent chasing after Mexicans on Medicaid by the small handful of banks and investment companies who advertise on Fox and CNBC."
"...CNBC is more or less openly a propaganda organ for rapacious Wall Street banks, funded by ad revenue from the financial services industry."
"...one of the key psychological characteristics of the Tea Party is its oxymoronic love of authority figures couples with a narcissistic celebration of its own "revolutionary" defiance."
"...their willingness to take orders has allowed them to organize effectively..."
"[In February 2008]... riots had broken out in counties all over the world, including India, Haiti, and Mexico, thanks to the soaring costs of foods like bread and rice -- and the big banks themselves even admitted at the time that the cause for this was a speculative bubble."
"In 2004 the five biggest investment banks in the country (at the time, Merrill Lynch, Goldman, Morgan Stanley, Lehman Brothers, and Bear Stearns) had gone to then-SEC chairman William Donaldson and personally lobbied to remove restrictions on borrowing so that they could bet even more of whatever other peoples' money they happened to be holding on bullshit investments like mortgage-backed securities."
"[The Tea Party provided]... a place to focus their anger away from the financial services industry, and away from the genuinely bipartisan effort to subsidize Wall Street."
"It was classic race politics -- the plantation owner keeping the seemingly inevitable pitchfork out of his abdomen by pitting poor whites against poor blacks. And it worked, big-time."
"[The Tea Party] ...is like a mass exercise in narcissistic personality disorder, so intensely focused on itself and its won hurt feelings that it can't even recognize the lunacy of a bunch of middle-class white people nodding in agreement at the idea that Black History Month doesn't do enough to celebrate nice white people."
"[The] ...origins [of the Tea Party]... are steeped in a gigantic exercise in delusional self-worship."
"They're lonely martyrs to the lost national ethos of industriousness and self-reliance, whose only reward for their Herculean labors is the bleeding of their tax money for welfare programs -- programs that of course will be consumed by ungrateful minorities who hate America and white people and love Islamic terrorists."
"[Westchester County Tea Partiers'] ...rallying cry was a lawsuit filed jointly by a liberal nonprofit group in New York City and the Department of Housing and Urban Development against the county. The suit alleged that Westchester falsified HUD grant applications asking or federal grant money without conforming to federal affirmative action guidelines designed to push desegregation."
"To the Tea Partiers, this is a simple case of taxation without representation."
"[Tea Partiers believe] ... the Obama health care plan... is the first step in a long-range plan to eliminate the American free enterprise system and install a Trotskyite dictatorship."
"Most of the Tea Partiers view national politics through the prism of what they have seen, personally, in their own communities: intrusive government and layer upon layer of regulatory red tape."
"Your average working American looks around and sees evidence of government power over his life everywhere."
"...they think the same dynamic they see locally or in their own lives -- an overbearing, interventionist government that seeks to control, tax, and regulate everything it can get its hands on -- operates the same everywhere."
"The grifter class... ....[wants] the average American to believe that what government is to him, it is also to JP Morgan Chase and Goldman Sachs."
"The fact hat an unapologetic fat cat like [CNBC's Larry] Kudlow -- one who talks and acts and dresses like a fat cat -- can, when convenient, throw on the mantle of a populist revolt and get away with it reassures us that for all the talk about pitchforks and revolutions and fighting back, the Tea Party movement remains in thrall to the authority of the rich and powerful. Which renders the so-called movement completely meaningless."
"Even after the rich almost destroyed the entire global economy through their sheet unrestrained greed and stupidity, we can't shake the peasant mentality that says we should go easy on them, because the best hope for our collective prosperity is in them creating wealth for us all."
"What has taken place over the last generation is a highly complicated merger of crime and policy, of stealing and government."
"But our politics...is silent about this."
"The right is eternally fighting against Lyndon Johnson; the left, George Wallace."
"The new America...is fast becoming a vast ghetto in which all of us, conservatives and progressives, are being bled dry by a relatively tiny oligarchy of extremely clever financial criminals and their castrato henchmen in government, whose main job is to be good actors on TV and put on a good show."
"...those unseen labyrinths of the Grifter Archipelago that are indifferent to party affiliation, are our real politics."
"...since Americans require the illusion of self-government, we have elections."
"...millions of tenuously middle-class voters are conned into pushing Wall Street's own twisted greed ethos as though it were their own."
"[Former Federal Reserve chief Alan] Greenspan was ...the perfect front man for the hijacking of the democratic process that took place in the eighties, nineties, and the early part of the 2000s."
"[Greenspan's]...career is the perfect prism though which one can see the twofold basic deception of American politics; a system that preaches sink-or-swim laissez-faire capitalism to most but acts as a highly interventionist, bureaucratic welfare state for a select few."
"[The Ayn Rand sponsored] ...meetings of the "Collective" would have an enormous impact on American culture by birthing a crackpot anti-theology dedicated to legitimizing relentless self-interest -- a grotesquerie called objectivism that hit the Upper East Side cocktail party circuit hard in the fifties and sixties."
"...this lunatic religion [of objectivism] that should have choked to death in its sleep decades ago would go on, thanks in large part to Greenspan, to provide virtually the entire intellectual context for the financial disasters of the early twenty-first century."
"Since being in tune with how things look to other people is a big part of that magical unspoken connection many people share called a sense of humor, the "metaphysics" of objectivism go a long way toward explaining why there has never in history been a funny objectivist."
"Rand, like all great con artists, was exceedingly clever in the way she treated the question of how her ideas would be employed."
"...where do the rest of us look in the Yellow Pages to hire private protection against insider trading?"
"[Objectivism]...was incoherent and entirely subjective."
"Rand's objectivists were very strongly opposed to the very concept ...that allowed a federally appointed banking official -- the Federal Reserve chairman -- to control the amount of money in the economy."
"...Greenspan did something that was anathema to any good Randian's beliefs: he went to work for a politician."
"...Greenspan managed to become famous for being famous..."
"Like the Maharishi, Greenspan got this foot in the big door by dazzling deluded celebrities with voluble pseudo-mystical nonsense."
"...laughs economist Brain Wesbury today. "...if you look at his record, he was wrong about almost everything he ever predicted."
"...Greenspan's errors were often historic, idiotic blunders..."
"Before the S&L crisis exploded Greenspan could be seen giving a breezy thumbs-up to now-notorious swindler Charles Keating, whose balance sheet Greenspan had examined..."
"...it wasn't Greenspan's economic skill that got him to the top banker job."
"Greenspan had proved his worth to Reagan by using a commission he headed to perform one of the all-time budgetary magic tricks, an invisible tax hike that helped the supposedly anti-tax Reagan administration fund eight years of massive deficit spending."
"...Social Security taxes are very regressive, among other things because they only apply to wage income..."
"...Greenspan and Reagan...conspired to hike Social Security payments, justifying it with the promise of building up a Social Security nest egg for subsequent decades, then used up that nest egg on current government spending."
"...Greenspan hikes Social Security taxes by a trillion and half dollars or so, four presidents spend all that money on other shit (including, in George W. Bush's case, a massive tax cut for the wealthy), and then, when it comes time to start paying out those promised benefits, Greenspan announces that it can't be afforded, the money isn't there, benefits can't be paid out."
"...how the bubble economy works..."
"...every time the bubble bursts and the gamblers all go belly-up , the house is allowed to borrow giant piles of money from the state for next to nothing."
"...each time the bubble burst Greenspan and the Fed swept in to save the day by printing vast sums of money and dumping it back on Wall Street, in effect encouraging people to "drink themselves sober," as Greenspan biographer William Fleckenstein put it."
"The Fed gets its pseudo-religious aura from its magical ability to create money out of nothing, or to contact the money supply as it sees fit."
"One way that money is created is through new issuance of private credit..."
"The bank can also inject money into the system directly, mainly through two avenues. One is by lending money directly to banks at a thing called the discount window, which allows commercial banks to borrow from the Fed at relatively low rates to cover short-term financing problems. the other avenue is for the Fed to buy Treasury bills or bonds from banks or brokers."
"In recent times, thanks to...quantitative easing, the Fed has gotten into the habit of buying more than just T-bills and is printing billions of dollars every week to buy private assets like mortgages."
"...the Fed has enormous power to create money both by injecting it directly into the system and by allowing private banks to create their own new loans."
"If you have a productive economy and an efficient financial services industry...that stimulative power of a central bank can be a great thing."
"[Greenspan's] ...response to...the 1987 crash...[and] the recession of the early 1990s, brought about by the collapse of the S&L industry...[was to] slash the federal funds rate and flood... the economy with money."
"In January 2000, Greenspan [said]... "We may conceivably conclude from that vantage point hat, at the turn of the millennium, the American economy was experiencing a once-in-a century acceleration of innovation, which propelled forward productivity..."
"...from February 1996 through October 1999, Greenspan expanded the money supply by about $1.6 trillion, or roughly 20 percent of GDP."
"As [Greenspan] ...put it during the boom: "[There is] an ever increasing conceptualization of our Gross Domestic Product -- the substitution, in effect, of ideas for physical value."
"Greenspan's endorsement of the "new era" paradigm encouraged all the economic craziness of the tech bubble."
"By the turn of the century, the effect of Greenspan's constant money printing was definite and contagious, as it was now widely understood that every fuckup would be bailed out by rivers of cheap cash."
"...says [Iowa professor Paul] Weller now. "There was this belief that the Fed would always provide a floor to the market."
"The idea that Greenspan not even covertly but overtly encouraged irresponsible speculation to a monstrous degree is no longer terribly controversial in the financial world."
"...he was also working round the clock, with true Randian zeal, to destroy the government's regulatory infrastructure."
"He wanted a government that was utterly powerless to interfere in the workings of private business..."
"Greenspan's reigning achievement in this area was his shrewd undermining of the Glass-Steagall Act, a Depression-era law that barred insurance companies, investment banks, and commercial banks from merging."
"...Glass-Steagall had helped prevent exactly the sort of situation we found ourselves subject to in 2008..."
"Gramm-Leach-Bliley...became law, a move that would lead directly to the disasters of 2008."
"...Greenspan et al.... eventually succeeded ....in passing a monstrosity called the Commodity Futures Modernization Act of 2000, which affirmatively deregulated the derivatives market."
"...credit default swaps ...allowed companies to sell something like insurance protection without actually having the money to pay that insurance..."
"[Michael] Greenberger [at the time the head of the CFTC's Division of Trading and Markets says] "These guys were selling insurance without being capitalized."
"AIG...imploded in 2008 after selling nearly a half billion dollars' worth of insurance despite having practically no money to pay off those bets..."
"Nevertheless, Greenspan just months after this collapse said that regulators' risk models were "much less accurate than banks' risk measurement models."
"In February 1999, Time magazine even put him on the cover, flanked by Clinton officials Bob Rubin and Larry Summers..."
"[Greenspan] ...had used the Fed's power to turn himself into the great indispensable superhero of the investor class..."
"...when it came to using the Fed's powers to rein in abuses, [Greenspan] ...proclaimed helplessness before the forces of the free market."
"
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