"The Divide – American Injustice in the Age of the Wealth
Gap,” by Matt Taibbi, 2015
Taibbi is an easy-to-digest writer that zeroes in on one of
the big problems of class society – the justice system for the rich and Wall
Street, and the justice system for the various layers of the working
class. Unlike Gleen Greenwald, who
wrote a similar book to this, he is not so arid and rationalistic, but instead
takes you inside the lives of a number of people who have been victims of rich-class
justice – a small Chinese community bank; a black man from the Bronx; a white
homeless stoner in New York; ‘illegals’ in Gainesville, Georgia; the immigrant owner
of Canadian insurance company; a Latino family on welfare in LA; a female
whistle-blower at Chase.
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| Goofy Cover of Lady Justice |
Taibbi’s no leftist, just an enraged liberal. He makes some excuses for the justice and
capital system, focusing only on financial corporate crime and no other. Yet what he pictures as a good journalist, in
spite of his politics, is a corporate system rife with criminal firms
and practices like rigging LIBOR. Chase Bank, HBSC, BofA,
Countrywide, Enron, AIG, Wells Fargo, Arthur Andersen, Goldman Sachs, Citgroup and many
hedge funds all engage in criminal behavior on a regular basis. It is the price of doing business. He especially looks at the 2008 crisis, which he calls ‘the biggest white-collar
crime wave in history.” In 2008, he says
that ‘Every major financial company had chosen to participate in this enormous
fraud.” He calls the forced sale of
Lehman, “the biggest bank robbery in history” and shows you why.
Taibbi, like many others, points out that no one has gone to
jail, corporations (i.e. shareholders) just paid fines and signed non-prosecution
‘agreements,’ which are the new form of government deregulation. But he goes further. Intimately related to this lax environment
for corporate crime is an absolutely lock-tight system aimed at ordinary
people. This encompasses New York’s stop
and frisk / ‘broken windows’ policy; the mass incarceration state; the drug
war; the war on immigrants; private prison systems; out-of-control police violence
(although he does not talk about police shootings…); excessive fines; the
deportation extravaganza; the development of civil debtor’s prisons; intrusive
welfare inspections; excessive criminal prosecutions of welfare recipients; even
those traffic tickets that are showered on the population like confetti. All of it is connected, unlike what the
politics of so many single-issue organizations would suggest. You cannot defeat
these issues in isolation.
So who are the villains, besides the gallery of well-known corporate
criminals like John Mack, Jamie Dimon, Anthony Mozillo or Lloyd Blankfein that
liberals so love to hate? Taibbi instead
focuses on Eric Holder, Bill Clinton, Lanny Breur, Mary Jo White (now head of
FINRA), Barack Obama, Tim Geithner and the corporate-defense law firm of Covington and Burling,
where both Holder and Breur worked before government. Odd that the list is made up of Democrats,
but they were the ones in charge of the aftermath of the 2008 crash. After all, under both Bushes more financial
crimes were prosecuted, especially in the big round-up around the S&L
crisis in the 1980s. Capital has a
tag-team method of political control and the Democrats happened to inherit the
mess when it was their turn. So what
happened to institute the rules of neo-liberalism?
Taibbi starts with Holder’s 1999 ‘collateral consequences’
memo, written while he was first at the DOJ.
The memo was once intended to be ‘tough on banks,’ but later surfaced to
provide a reason not to disrupt companies or ‘the markets’ by leaving
executives and companies alone. It
became the legal rationale for doing nothing except collecting fines from
corporations that could well-afford to pay them. Lanny Breur carried out this policy in the
fines levied on many banks, like HSBC, which laundered money for terrorists and
drug cartels. Essentially 'crime' disappeared if committed by corporate figures and they became civil matters. Not so for the population at large.
Next up is Bill Clinton, who destroyed ‘welfare as we know
it’ and turned it into a punitive and abusive paper-trap for the poor,
instituting no-knock searches of welfare recipient’s homes. Or Obama, the king of deportations, who broke
Bush’s record, and while attempting to mitigate some tactics, hasn’t changed a
thing. Then there is Mary Jo White, who was head of the SEC at the time and
basically decided to go after ‘small companies’ or issues only. This was conscious policy. You can still see this in their and FINRA’s
investigations of small fry. Or padding
their quota numbers with empty ‘paper’ investigations of bankrupt foreign companies
that collapsed and did not file Edgar / SEC paperwork.
Taibbi instead contrasts this process with depictions of the
life of a homeless stoner, who is thrown in jail for 3 months in vicious
Riker’s Island prison for a half a joint,
while drug money launderers at banks go free.
Or a black man who stands in front of his apartment at 2 AM at night
with a friend and is arrested by quota-filling NY cops for ‘blocking the
sidewalk’ to non-existent walkers. Those
same arrests are not happening on the Upper East Side of New York. Or the story of a small bank in Chinatown
which was the only bank to be brought up on ‘mortgage fraud’ criminal charges,
called by some the “Lee Harvey Oswald” of the banking crisis. Or the lives of persecuted immigrants in Gainesville who are arrested for bullshit traffic issues
and are deported into the private prison system and into the dangers of Mexico and reentry into the U.S. Yet all the while Georgia businesses want them back.
Taibbi’s descriptions of the difficulties of trying to apply for and collect
welfare in LA, where you voluntarily put a target on your back for a tiny bit
of money, are brutal. Yet other corporations
or people that get loans or grants from the government are not so treated. A whistle-blower at Chase loses her job after
naively pointing out illegal practices like robo-signing and no-document loans
as the basis for securitized products.
Yet the Chase executives who OK this practice go free, even though they
have committed tens of thousands of frauds re foreclosures. And lastly, an insurance executive unjustly
targeted by short-sellers at hedge funds who nearly loses his business, while
the hedge funders walk free.
Taibbi usefully answers all the arguments of the government
types who defend these practices. Ultimately
non-prosecution and ‘too big to jail’ guarantees another corporate crime
wave. It’s not just ‘two Americas.” It’s one America, with one slice of it enforcing rules on the majority, while they themselves skate.
Taibbi’s “Griftopia,” Greenwald’s, “With Liberty & Justice
for Some,” and Lewis’ “The Big Short,” all reviewed below. Use blog search box, upper left.
And I bought it at Mayday’s cutout rack
Red Frog
October 12, 2015
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