Matt Taibbi: "Why Isn’t Wall Street in Jail?"

From Democracy Now, Amy Goodman interviews Rolling Stone writer Matt Taibbi on his latest article covering the recent financial meltdown:

MATT TAIBBI: Well, it’s an incredible story. I mean, just to back up and provide some context, I think, for this Wisconsin thing, and especially for the Ohio thing, given what their governor used to do for a living—

AMY GOODMAN: Explain.

MATT TAIBBI: Well, he was an employee for Lehman Brothers, and he was—

AMY GOODMAN: This is Governor Kasich.

MATT TAIBBI: Governor Kasich, yeah, and he was intimately involved with selling—getting the state of Ohio’s pension fund to invest in Lehman Brothers and buy mortgage-backed securities. And of course they lost all that money. And this, broadly, was really what the mortgage bubble and the financial crisis was all about. It was essentially a gigantic criminal fraud scheme where all the banks were taking mismarked mortgage-backed securities, very, very dangerous, toxic subprime loans, they were chopping them up and then packaging them as AAA-rated investments, and then selling them to state pension funds, to insurance companies, to Chinese banks and Dutch banks and Icelandic banks. And, of course, these things were blowing up, and all those funds were going broke. But what they’re doing now is they’re blaming the people who were collecting these pensions—they’re blaming the workers, they’re blaming the firemen, they’re blaming the policemen—whereas, in reality, they were actually the victims of this fraud scheme. And the only reason that people aren’t angrier about this, I think, is because they don’t really understand what happened. If these were car companies that had sold a trillion dollars’ worth of defective cars to the citizens of the United States, there would be riots right now. But these were mortgage-backed securities, it’s complicated, people don’t understand it, and they’re only now, I think, beginning to realize that they were defrauded...

...This is no different than drug dealers who take a bag of oregano and sell it to you as, you know, a pound of weed. That’s exactly the same scam.

Watch or listen to the rest here.

And to finish out the comparison as it pertains to how public sector unions are now under attack because, critics say, their pension funds cost too much: the drug dealer then calls the police and tells them you have a pound of weed, and, even though it's only oregano, the cops come and arrest you and bust your head open when you try to tell them it's only oregano. That is, the people who committed this massive white collar crime are totally in league with the people who are trying to bust unions in Wisconsin, Ohio, and now Indiana. It may not be a gigantic grand conspiracy to make the middle class pay for the egregious sins of the wealthy, but it is class warfare on a monumental scale: the American people have been fleeced for trillions of dollars, and now they are being punished as though they were the criminals, instead of victims.

I just finished reading Taibbi's book on the financial meltdown, Griftopia, and I have to say that his is the most comprehensive and illuminating account of the affair I've encountered thus far. One of the main reasons for this is that Taibbi doesn't at all come from the world of high finance and politics; he learned all this stuff the hard way: he researched and investigated the story, something most journalists don't do anymore. And the fact that he had to figure it out for himself puts him in a place that people from within that world can't possibly be, the land of objectivity. I mean, most Wall Streeters don't even think these bankers did anything wrong. To them, defrauding the American public is just business, and therefore sacrosanct. But Taibbi calls it what it is, crime, and loudly asks in his latest Rolling Stone essay why the hell aren't these guys in jail already?

The answer, of course, is that, as former Senate Majority leader Harry Reid put it some months ago regarding the relationship between the bankers and Capitol Hill, "Frankly, they own the place." That is, none of these people are going to jail. Ever.

They own the government. And fuck you.

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