In his frequent dispatches for Rolling Stone, Matt Taibbi stands above a host of reporters covering the American economy by linking undeniable facts with righteous outrage. He first dove into the murky mess of modern capitalism just as the economy was crashing in late 2008. He quickly made a splash by turning inscrutable topics into entertaining reads by combining a devastating sense of humor with language that anyone could understand.
That series of articles resulted in the bestselling 2011 book “Griftopia,” exposing the evils of Wall Street on its way to becoming a national bestseller. His recently released follow up, “The Divide: American Injustice in the Age of the Wealth Gap,” is built around attempts to learn why: “Poverty goes up. Crime goes down. The prison population doubles. Fraud by the rich wipes out 40 percent of the world’s wealth. The rich get massively richer. No one goes to jail.”
Taibbi, son of veteran broadcast journalist Mike Taibbi, recently took time to discuss his work with Pasadena Weekly.
PW: How did you get into financial writing and marrying serious subjects with humor?
TAIBBI: I came into the financial beat by accident. I was a regular political reporter, basically a humorist, and my job was to make fun of politicians for years and years. Then at the end of the 2008 presidential race, when the economy imploded, I realized I didn’t understand some things candidates were talking about, like the reason for the spike in oil prices in summer and the crash in September.
I was very troubled by the fact that neither I nor any of the other reporters covering the presidential campaign knew the causes of these issues. Then I was assigned coincidentally by Rolling Stone to do a story about the crash. It got a tremendous response, mainly because I did what no one had ever asked me to do before: translate the jargon-laden world of finance into terms understandable by average readers. It was an exciting challenge and I’ve kept at it ever since.
What was the inspiration for the new book, and do you think things have gotten any better since “Griftopia,” or worse?
I came onto this topic because I wrote story after story about it, and all say in a clever fashion that Bank X blew a zillion dollars, no one got indicted and no one went to jail. I started to get agitated by the sameness of the outcome, and right around the time of the Occupy protests I decided to write about that because I didn’t know a whole lot about the justice system.
In the beginning process of my research I looked into who goes to jail and why. It turned into this bizarre and hopefully very emotional compare-and-contrast exercise in which I personally had to learn a lot about questions I’d never asked before, like how come poor people wind up in jail and contrast it with Wall Street people, who don’t. The conclusion I came up with was that the failure to prosecute in 2008 after all those frauds would inevitably lead to worse scandals because the white-collar criminals would be emboldened. We’re seeing that now.
How did you find the correlation between the breakdown and the failure of the justice system?
It’s sort of obvious: rich people get preferential treatment and the poor don’t. That’s obvious. But it worsened in recent years. I was looking at particular moments in time, like the decision by Democrats in the early ‘90s to hook up with Republicans on the welfare reform issue, hopping on the deregulation train and courting Wall Street. The consensus was more lenience for the rich and harsher attitudes toward the poor. And now we’ve kind of organically come to this place where anyone who works at Chase and HSBC banks are virtually untouchable but in some poor communities any move you make will land you in jail.
What was your most shocking moment in writing the book, and do you have any hope for America?
The most shocking moment was when I met Andrew Brown, a 35-year-old African-American bus driver and he was arrested and charged with obstructing pedestrian traffic. I met him in a law office and asked what he was there for. Like most white people, I couldn’t believe that you could be arrested for impeding pedestrian traffic. In his case he was doing it at one in the morning when there was no pedestrian traffic, and was standing in front of his own apartment on a remote street when the cops wanted an excuse to pick him up. There were a lot of white guilt moments in the book.
But I’m cautiously optimistic for the long-term big picture. I think another financial disaster will definitely cause a more pronounced response from the Justice Department. Politically, they want to, but right now they don’t have the juice.
We hear in the news that we’re in recovery, but some factors don’t show that. How much should people believe about the economy being on the mend?
The proof is in the pudding. Most people would tell you they’re not doing better. But if you work in a major investment firm in New York, you probably are doing better. There’s a very good reason for that. Not only did we have a massive bailout program, but we have an ongoing subsidy program, quantitative easing, that essentially has forced investors everywhere to put their money in riskier opportunities, which results in work for investment banks. People are pouring money into emerging markets now and we’re seeing mergers in places like Brazil. Big banks are the ones who benefit; $45 billion a month is pumped into the economy by quantitative easing, but it’s not showing up on the street, even though the mandate is for the money to help push hiring.
That’s something a lot of people don’t realize: The stock market doing well doesn’t have a connection to the real world.
That’s a really important point. As a former member of the traveling campaign press corps, stocks were all we paid attention to. The market can be just fine while the economy has a raging cancer eating it away. To use it as a major indicator is naïve and a problem that we have in the American press corps.
How do reporters or you find the “average American” examples of how the economy screwed them? Do they come to you now that you’re known? Or do you find them?
A little of both, but you have to be careful. I used to work in Russia and a lot of reporters wanted to do a story on the emerging middle class in Moscow. Reporters would go to some city and then hire translators to find such a person and say it’s an emerging middle class when there really wasn’t. I do hear a lot of crazy stories. People write to me, lawyers present clients. You have to be careful not to take what’s really a specific example and apply it everywhere or say an entire program or system is bad, that they’re representative and not exceptions to the rule. In the case of this book we discussed the P100 program in California, preemptive searches of poor people who are welfare applicants. (P100, or Project 100 Percent, is a program in San Diego County which subjects CalWORKS welfare applicants to warrantless and unannounced home searches and interrogations by district attorney investigators.). That’s a singular program that only happens there, but I thought it was representative of the attitude of the bureaucracy towards poor people there.
But if you don’t speak up about something like that going down here, it’ll expand elsewhere.
That’s true. But they survived a major legal challenge, so God knows it could be in our future.
Does the fact that the books are hits a sign that people are waking up? You compare Americans today with the Soviet citizenry who woke up from a mass dream they were living under and things changed, at least on the surface. So are people poised to wake up, or are we in big danger of continuing to slip and not pay attention to anything?
I don’t think we’re poised for awakening. Look at Occupy, a protest that happened all around the country that was nonspecific and people were all over the country with general complaining that something was wrong. They wanted to change and didn’t trust traditional avenues for change anymore. However, I don’t think the people who came out for Occupy were enough people. I remember being in a foreclosure court and watching people by the dozens being tossed from their homes and seeing pure anger and rage from people who lost their houses. But they weren’t the ones in Occupy. They didn’t get together yet and they need to. I think it’s coming.
Can that happen peacefully or do you ever speculate if we’re headed for nasty trouble?
Americans are a really violent people, but our history in protests is we’re always the last ones to go in the streets. If we had a serious financial crisis with more economic hardship, who knows? (Laughs) Buy canned food.