President Obama's executive order protects people like my grandmother.
Matt Taibbi has made a huge splash on the American journalism scene. His Rolling Stone dispatches about the scams on Wall Street have helped make him a favorite panelist on HBO’s Real Time with Bill Maher. Taibbi has written five books thus far, including The New York Times bestseller The Great Derangement and his latest, Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America.
Griftopia breaks down the secrets behind the epic financial meltdown of 2008 and the current near-depression America is still suffering. Whether delineating former Federal Reserve chairman Alan Greenspan’s bizarre rise to power, showing how the tea party movement has already been co-opted and corrupted by the very veteran players it seeks to crush, or revealing the ways that powerful forces ensured Goldman Sachs would be saved even as it nearly broke the entire economic system, the book is a harrowing yet entertaining ride.
I spoke to Taibbi by phone, as he called in from his suburban Washington, D.C., home. He was surprisingly warm and expansive. He had allotted me only twenty minutes, but he got so caught up in the conversation that we talked for nearly an hour.
Q: Regarding the financial meltdown, what would you say is the biggest part of the problem?
Matt Taibbi: Right now, the biggest problem we have is that the companies I write about really are too big to fail. They’re so concentrated and have such a reach into all of the economy that it’s true that we can’t let them go under. This makes us vulnerable to another collapse because we can’t let these guys suffer the consequences of their actions.
Q: In your new book, you say the tea party doesn’t matter. It had mixed results in the election, but generally did better than some thought it would. How do you feel about its impact on the election?
Taibbi: It’s still the way I described it in the book. It’s very instructive that the day after the elections we saw the Republicans making an effort immediately to overturn the Volcker Rule, which, as part of financial reform, prevents Wall Street companies from gambling on their own accounts. So the very first thing the Republicans did was do a huge favor for Wall Street. That sums up the whole thing: public anger converted into favors for Wall Street.
Q: What about Sarah Palin? She endorsed a lot of successful candidates in the midterms.
Taibbi: She’s clearly building up herself as a political entity. What’s interesting is she’s not synchronizing her interests with the party. She could win the nomination, but I can’t see how she could win the general election. What she’s doing is the political version of the kind of things the Wall Street guys are doing: getting as much as possible for themselves without thinking of the consequences.
Q: Do you feel that her motives are insidious?
Taibbi: I think her motives are really incoherent. She seems built for the spotlight and money and is on a narcissistic quest for both. I just don’t sense there’s a whole lot of thought put behind what she’s doing.
Q: You call former Federal Reserve chairman Alan Greenspan “the biggest asshole in the universe.” Yet the press and public for so long were led to think he was an infallible icon. How do you think he got away with it?
Taibbi: Greenspan is a classic con man. A guy who reached power by sounding smart and giving pretty speeches to politicians who didn’t know what he was talking about much of the time. He’s like religious con men who get to where they are by saying vague things and letting people reach their own interpretation. And he stayed in power by giving the powerful what they wanted. There were disastrous consequences for everybody but him. In the process, he presided over this period where more and more political decisions were moved to unaccountable financial bureaucracies. That’s a big part of the story too: how guys like him gained power and the politicians officially lost power.
Greenspan’s whole career was built on media exposure. He was romantically involved with key members of the media, such as Barbara Walters and NBC’s Andrea Mitchell, who is his wife. He was very, very cunning in getting people to write articles about what a genius he was. That’s how he got into power: first economist to make the cover of Newsweek. He established himself as an infallible oracle, and a lot of it had to do with his ability to seduce key media figures, sometimes literally. In the book, I show his record as an actual economist was complete shit.
Q: You recently took Rand Paul to task for being part of the tea party movement. So what are your thoughts on Ron Paul, seeing as he’s behind some of the reforms you’ve advocated?
Taibbi: It’s unfortunate I had to cover Rand. I kind of like Ron, talked to him many times. I don’t agree with him on many things but I always thought he was honest, and he was consistent. I don’t think Rand is terribly consistent. Ron has very consistent positions about all these bailouts and a nuanced understanding of the Fed, which a lot of Congressmen don’t. I’m very disappointed in how this new generation is turning out.
Q: What was the most shocking thing you learned in working on this book?
Taibbi: I had a bunch, but I’d say the biggest was when a friend who worked for a wealth fund overseas called and told me he’d been in a meeting where he said his bosses at Morgan Stanley were trying to sell the Pennsylvania Turnpike to Arab interests. The paper trail was shocking.
Q: The Pennsylvania legislature was able to stop that deal. Does this show that people still have power to stop such giant maneuvers?
Taibbi: We have some power, but it’s extremely limited, and it’s no match for the other side. They just have the resources that are essentially infinite, and they have total mastery of these bureaucratic processes. Even when they lose, it’s the cost of doing business, and they move on to the next thing.
Q: We’ve been forced into globalization over the last twenty to thirty years, yet we hardly see any of the benefits.
Taibbi: For me, with the financial services industry, what does globalization really mean? There are no real barriers for capital anymore. What we are seeing is that governments are less and less able to regulate these gigantic transnational companies, and more than that, they’re increasingly dependent on these companies to survive. These banks are stateless. Goldman Sachs is not American, and Deutsche Bank is not German. They’re borderless powers that are gaining in strength while governments are declining.
Q: So it makes me wonder, whether all the alleged fringe groups that spoke of the hidden powers of banking and financial groups like the Bilderbergs maybe weren’t so crazy after all?
Taibbi: They’re in the ballpark of being right. But the specifics are fanciful or exaggerated. There’s nothing fictional about the idea that giant transnational banking powers are dominating international politics. But were they right all along? I don’t know, because a lot of these conspiracy theories were anti-Semitic, and their vision was of a star chamber of nefarious individuals who get together to control the world. It’s not really that; it’s giant companies mindlessly pursuing profit rather than a big plan.
Q: How do you get your sources to open up, or find the trail of information?
Taibbi: A lot of sources are willing to talk about this. I haven’t had a problem at all. There are people on Wall Street who want to make money honestly and they can’t. Or they’re forced to engage in ridiculous behavior by these gigantic companies.
I had a guy in the commodities business call me up and complain that a major investment bank was manipulating the commodities market with a gigantic order for corn futures. This guy had to make a decision to chase that order, make money on illegal activity, or not make money. You either lose or join in the criminality. A lot of people don’t want it to be that way.
And people are pissed off that Goldman Sachs nearly blows up the universe and then gets bailed out for it. What’s capitalistic about that? People hate that shit.
Q: You point out so many dire things in your book that it can leave one feeling helpless. What signs of hope are there to fight back?
Taibbi: There isn’t an organized movement right now. There are individual things. There’s a produce-the-note movement that if you’re being foreclosed on, you force the bank to actually show the mortgage in court because a lot of transactions in the past ten years were fraudulent.
There are a few people trying to pursue real reforms, like Bernie Sanders and Sherrod Brown.
There’s a lot of anger in the public about the economy but they haven’t figured out who the real enemy is. People need more time to figure out the connection, but they’re getting there. Almost everyone you know now has experience with modern financial services—losing pensions, houses, etc. They’re getting an education but not getting together to create that movement that can really impact things yet.
Q: Where do you find yourself landing philosophically, knowing all this stuff?
Taibbi: Most of the time I talk about this stuff, I’m surprised because people say, “You’re a socialist” or “a communist” but if you pay attention, I’m saying capitalism has been corrupted. This is an issue where right and left can agree. When government and private finance are in bed with each other, it’s not a right versus left issue; it’s a haves versus have-nots issue.
We have this problem in our media that everyone picks sides and you’re either blue team or red team. The Democrats are worse than Republicans on this, and I don’t know how you miss that in covering this stuff.
Q:With all this dire information, how do you keep your sense of wit?
Taibbi: My favorite book growing up was Dead Souls by Gogol, a great Russian novel about a financial scam. I find this stuff grotesque and funny in a really dark way, and I’m fascinated by the ingenuity of these scams. If I focus on that more than the overwhelming big picture, I can keep a sense of humor about it.
Carl Kozlowski is a staff writer for the Pasadena Weekly and Relevant magazine. He’s the co-author of “Seize the Day Job: The Humor Book Al-Qaeda Almost Kept You from Reading,” which is available for sale at his website, www.americasfunniestreporter.com.