Monday, January 17, 2011

A Truly Devastating Account of How America Got Taken For (Nearly) All Its Worth -- Book Review: Griftopia by Matt Taibbi

Book Review

Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America
by Matt Taibbi
Non-Fiction; published by Spiegel & Grau in November 2010

This Wednesday, I imagine at least 25 million people will watch the season premiere of "American Idol." Nothing wrong with that, even if I won't be among the huddled masses, but I can't help but think that if, at most, one-third of domestic American Idol viewers--or roughly the 8.45 million who watched the season debut of "Jersey Shore"--also chose to read Matt Taibbi's 250-page book, Griftopia, there would most likely be a revolution in the United States.

That's how powerful and precise Taibbi--who regularly writes incredibly incisive pieces on similar subjects for Rolling Stone--is in explaining, in as close-to-layman's terms such esoteric information can get, the root causes of the financial collapse of 2008 and the complicit culprits who continue to swindle the American public.

Matt Taibbi
His skewer is surprisingly non-partisan and impales both Republicans and Democrats (including Barack Obama and Rahm Emanuel) and not simply the obvious targets such as the Wall Street investment banks--particularly Goldman Sachs--and subprime mortgage brokers (although the depths of their duplicity is descriptively detailed). The caustic but never churlish Taibbi also rips Alan Greenspan a new asshole (or more accurately, calls him one) in a remarkably revelatory chapter that debunks any notion of the former Federal Reserve chief as some sort of economic oracle. With in-depth research, much historical context and numerous substantiating sources, Taibbi shows how continuously and catastrophically wrong Greenspan has been about most economic forecasts and decisions.

As a Chicagoan--actually a suburbanite--it was also interesting to read Taibbi's take on Mayor Daley's decision to sell the city's parking meters, for, as it turns out, a fraction of their true worth and to a consortium comprised largely of Arab wealth funds. You'll also be stupefied by the real reasons behind skyrocketing gas prices.

And though at odds with what I would like to believe, Taibbi's arduous accounting of the manipulative reality behind President Obama's health care bill--mainly that it was concocted by Emanuel as a deal to give insurance companies oodles more cash in exchange for a few election cycles' worth of campaign contributions--really helped me see the ever-dimming light about the American political power structure.

In sum, Griftopia further and more comprehensively clarifies what a variety of other sources--including the books The Big Short and The Two Trillion Dollar Meltdown and documentaries Inside Job, Capitalism: A Love Story and Casino Jack and the United States of Money--have already put into my head. Namely that A) Unless you are a member of the top levels of government, the Wall Street investment banks or their co-conspirators, you have been directly screwed by them in ways you can't even imagine, and B) the 2008 financial collapse (and resulting recession) was not caused by everyday citizens buying homes beyond their means and being unable to pay their mortgages when home values dropped.

This is what the powers that be want the American Idol-worshipping public to believe, but as Taibbi does a great job in explaining--as did Michael Lewis in the more mortgage meltdown-specific The Big Short--outright criminality was at play, not merely misfortune or consumer overreach. (I tried explaining what happened a bit more in this piece, but you really owe it to yourself to read Taibbi's and Lewis' user-friendly expositions.)

I have never been much of a conspiracy theorist and I am not an anti-capitalist. But having lost my job amid the fallout from the financial collapse of September 2008--and Taibbi reveals how it may have been avoided, not just by redressing years of deregulation, collusion and avarice, but had Goldman Sachs not pulled an unnecessary, cohorts-in-the-Treasury-aided power play to push AIG over the precipice--I've felt obligated to investigate the root causes a bit further than the mainstream media has presented. (Taibbi, who has only been on the financial beat for a couple years, embarrasses most of the press by revealing so much that the general public has never known, but should have.) And though in my case, Griftopia was a tremendous complement to other coverage I'd read and seen, I recommend it as strongly as possible to anyone as a place to start in deciphering what has brought us to where we still are today.

It won't be easy, throwaway reading, but Taibbi artfully keeps it from becoming too dense, with considerable humor to mitigate the detailed explanations of complex matters (like financial derivatives). And while Taibbi never advocates specific actions that us Main Streeters should take, he includes more than enough fodder for anyone looking for a reason to take to the streets.

I don't want to give away too many of Taibbi's numerous great tidbits, but this was one that especially made me cringe:

In 2008, the year by which the routinely immoral actions of Goldman Sachs, among others, would wipe out roughly 40% of the world’s wealth, the investment bank paid out $10 billion in compensation and bonuses—including $42.9 million to CEO Lloyd Blankfein—and made a $2 billion profit, they paid just $14 million in taxes. Ruin the world, get bailed out by the American taxpayer and give back less than what a superstar athlete makes in a year.

Where's my pitchfork?

Next up, from the Skokie Public Library, I will be reading Washington Rules by Andrew Bacevich, about how Congress is in bed with the military-industrial complex, and Travel as a Political Act, by my favorite travel writer, Rick Steves.

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