"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.
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 living off the backs of the rest.
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
October 12, 2015