Tristero --- Griftopia


by tristero

I just finished reading Matt Taibbi’s newest book, Griftopia, and it’s wonderful. Taibbi has a bloggy sense of outrage and a Heifetz-level virtuosity in the proper employment of profanity to advance an argument. He is also, despite his occasional digs (most well-deserved) - a liberal. He is mostly, though, one helluva talented reporter. Matt's political/cultural beat for Rolling Stone has given him an opportunity to write in a thoroughly cynical voice but to do so, oddly enough, with an utterly sincere astonishment. Not too many people can pull off something as contradictory as that and make it seem perfectly natural - it really does take a kind of genius.

Here is an extraordinarily succinct - and outraged, and thoroughly entertaining - summary of the housing crisis:

…Almost everyone who touched that mountain turned out to be a crook of some kind. The mortgage brokers systematically falsified information on loan applications in order to secure bigger loans and hawked explosive option-ARM mortgages to people who either didn't understand them or, worse, did understand them and simply never intended to pay. The loan originators cranked out massive volumes of loans with plainly doctored applications, not giving a shit about whether or not the borrowers could pay, in a desperate search for short-term rebates and fees. The securitizers used harebrained math to turn crap mortgages into AAA-rated investments; the ratings agencies slgned off on that harebrained math and handed out those AAA ratings in order to keep the fees coming in and the bonuses for their executives high. But even the ratings agencies were blindsided by scammers who advertised and sold, openly, help in rigging FICO scores to make broke and busted borrowers look like good credit risks. The corrupt ratings agencies were undone by ratings corrupters!

Meanwhile, investment banks tried to stick pensioners and insurance companies with their toxic investments, or else they held on to their toxic investments and tried to rip off idiots like [AIG sleazeball] Joe Cassano by sticking him with the liability of default. But they were undone by the fact that Joe Cassano probably never even intended to pay off, just like the thousands of homeowners who bought too-big houses with optionARM mortgages and never intended to pay. And at the tail end of all this frantic lying, cheating, and scamming on all sides, during which time no good jobs were created and nothing except a few now-empty houses (good for nothing except depressing future home prices) got built, the final result is that we all ended up picking up the tab, subsidizing all this crime and dishonesty and pessimism as a matter of national policy.

We paid for this instead of a generation of health insurance, or an alternative energy grid, or a brand-new system of roads and highways. 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 subprime 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? For a very good reason. 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. When it comes to that, we Americans have no peer. And when it came time to design the bailouts, a monster collective project spanning two presidential administrations that was every bit as vast and far-reaching (only not into the future but the past)) as Kennedy’s trip to the moon, we showed It.
Taibbi’s attitude towards the political landscape of America in the Third Millenium is, in some ways, similar to Thomas Frank’s, that there’s a bait and switch being pulled, that the real action is not the social issues - it never is - but rather the money. The looting of America by the Biggest, Ballsiest Crooks Ever is the only genuinely important story. For Taibbi, the teabaggers’ racism, sexism, xenophobia, libertarianism, and other extremisms seem to serve much the same function as geologists see for trees and grass: sure, it's striking sometimes, but ultimately, it's merely hair that covers the bald truth about the world. I’m not sure I entirely agree - but damn, when you read Matt describe what’s really been going on, without any sugar coating or euphemisms, and with that throat-slittingly sharp style... damn if Taibbi doesn't have a point:
Here's the real punch line. After playing an intimate role in three historic bubble catastrophes, after helping $5 trillion in wealth disappear from the NASDAQ in the early part of the 2000s, after pawning off thousands of toxic mortgages on pensioners and cities, after helping drive the price of gas up above $4.60 a gallon for half a year, and helping 100 million new people around the world join the ranks of the hungry, and securing tens of billions of taxpayer dollars through a series of bailouts, what did Goldman Sachs give back to the people of the United States in the year 2008?

Fourteen million dollars.

That is what the firm paid in taxes in 2008: an effective tax rate of exactly 1, read it, one, percent. The bank paid out $10 billion in compensation and bonuses that year and made a profit above $2 billion, and yet it paid the government less than a third of what it paid Lloyd Blankfein, who made $42.9 million in 2008.

How is this possible? According to its annual report, the low taxes are due in large part to changes in the bank's "geographic earnings mix." In other words, the bank moved its money around so that all of it earnings took place in foreign countries with low tax rates. Thanks to our completely fucked corporate tax system, companies like Goldman can ship their revenues offshore and defer taxes on those revenues indefinitely, even while they claim deductions up front on that same untaxed income. This is why any corporation with an at least occasionally sober accountant can usually find a way to pay no taxes at all. A Government Accountability Office report, in fact, found that between 1998 and 2005, two-thirds of all corporations operating in the United States paid no taxes at all.

This should be a pitchfork-level outrage- but somehow, when Goldman released its postbailout tax profile, barely anyone said a word: Congressman LLoyd Doggett of Texas was one of the few to remark upon the obscenity. "With the right hand begging for bailout money," he said, "the left is hiding it offshore."
Finally, I thought I'd leave you with Taibbi's inspiring conclusion. It’s as pure an expression of the unshakeable faith Matt Taibbi has in the capability of America's citizens to dig itself out of the mess the Biggest Assholes In The Universe created as ever we are likely to read:
...a country whose citizens purport to be mad as hell about growing government influence has still said little to nothing about that bizarre sequence of events in which the entire economy was rebuilt via this series of back-alley state-brokered mergers, which left fInancial power in America in the hands of just a few mostly unaccountable actors on Wall Street. We still know very little about what really went on during this period, who was calling whom, what bank was promised what. We need to see phone records, e-mails, correspondence, the minutes of meetings to know what the likes of Paulson and Geithner and Bernanke were doing during those key stretches of 2008.

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 particular type of corporate crime. We have voters who don't pay attention, a news !media that ignores key subjects or willfully misunderstands them, and a regulatory environment that bends easily to lobbying and campaign financing efforts, And we’ve got a superpower’s worth of accumulated wealth for the taking,You put that all together, and what you get is a thieves’ paradise-a Griftopia.