#griftopia

Editor’s Note: once again I’ve found myself tied up working on a rapidly ballooning series of essays over on ninaillingworth.com - my latest one is a non-partisan look at the truly disturbing number of retractions, corrections and walkbacks mainstream corporate media has had to issue in stories that concern Russia in some way or another. Please forgive my absence; somehow, no matter how hard I try, I haven’t been able to figure out how to write two separate articles/posts at the same time.

Back in December of last year, I started a short series examining quotations and expanding on concepts from Rolling Stone writer Matt Taibbi’s truly exceptional 2010 work “Griftopia: A Story of Bankers, Politicians, and the Most Audacious Power Grab in American History“ - you can find parts one, two, three, and four here.

In my opinion, one of the key reasons to study the 2008 worldwide financial meltdown and subsequent fallout events like the US bank bailout, the foreclosure crisis and enforced austerity throughout what is commonly called “the west,” is that it provides a fairly accurate cross section of the globalized greed, libertarian ideology and open criminality plaguing our society - a plague that sits at the root of many of the most important crisis we as both a people and a species face today; things like climate catastrophe, living in a rigged oligarchy and the Pig Empire’s forever wars.

Although most people are at least dimly aware that the 08 meltdown, government bailouts, and the foreclosure crisis involved “some pretty shady sh*t” the reality is that most everyday people aren’t even remotely aware of the vast, cascading web of corruption, complicity and open fraud Taibbi is describing in the above quote. As Michelle Alexander stated, “we know and we don’t know.” It is easier to blame the situation on incompetent regulators and “a few bad apples” on Wall Street than it is to face down the fact that the 2008 Financial Crisis was essentially both caused and magnified by a nesting doll of criminality and greed at the very top levels of our society.

The banks, hedge funds and speculators represented wealthy investors, who used pressure groups, think-tanks and open bribery to get lawmakers and regulators to legalize gambling with other people’s money. This in turn created an urgent demand for bogus mortgages based on rigged FICO scores; mortgages that would immediately be rolled into bullshit toxic securities and given AAA investment ratings by agencies pressured and bribed to hide all this fraud. These toxic securities were rapidly gobbled up by financial institutions because having them would allow investment bankers, hedge funds, and speculators to gamble with even more of other people’s money - and frankly, nobody cared because if it all went pop, the last 30 years of US (and Western) monetary policy pretty much ensured they’d get bailed out from public funds by lapdogs their rich clients paid to put into government.

The whole system was a crooked, closed-circle of malfeasance and f*ckery involving some of the richest, most powerful and most influential people in our establishment; an establishment that knew about, and was fully in on this confidence game while knowing without question that when the music stopped it would be pension funds, retirees and individual homeowners who would pay the final price and be left destitute. This wasn’t an accident, this was a savage con job involving thousands upon thousands of financial industry professionals, hundreds of elected officials or appointed regulators and some of the most respected, powerful and influential investors on earth - and pretty much everyone who has never stepped foot on a yacht was the target of that con.

Once you understand that austerity, the financial crisis and the bailout were all a rigged game designed to make a few people very rich at the expense of society, and once you accept that all of the people who were charged with stopping that kind of criminal behavior, were easily corrupted by capital and willingly participated in the scam - what then becomes impossible? If that complicity, criminality and mutual advancement of elite class interest tracks to other problems in our society (and newsflash, it does) how can we be confused by the nightmare hellscape we find before us? If the financial crisis was a class war heist, couldn’t endless Pig Empire wars be the same type of scam? How about our refusal to regulate carbon emissions and fight climate change? Exactly what are elites going to do when several billion people on this planet become surplus to labor requirements because of automation? Is the opioid crisis a scam to addict and murder poor people for profit and if so, how many people are in on that monstrous scheme? Private prisons? Using corporate media owned ultimately by billionaires and rich investors to destroy unfriendly politicians and class enemies who might threaten elite hegemony?

Is there really anything in a globalized, deregulated capitalism system that isn’t A) about profit and B) a potentially lucrative source of robbery in a fraud economy where criminality is the norm?

Thinking About Thinking #28 – Griftopia – Who Is Getting Away with What?

Griftopia by Matt Taibbi is a fascinating, ultra-hip, and more or less comprehensible explanation of the financial bubble burst of 2008. It’s a disturbing investigative report. But let’s get real. We need to understand this stuff if we ever want to think and act like a responsible adults instead of brain-dead, wage-slave entertainment addicts. Did you know that parking meters in Chicago are now…

Presenting Griftopia by Matt Taibbi. Reviewed by The Lone Reader podcast from the Everett Public Library in Everett, Washington.

So, as I mentioned a few posts back, I spent most of my Christmas holidays going over my copy of Matt Taibbi’s terrifying and yet illuminating “Griftopia: A Story of Bankers, Politicians, and the Most Audacious Power Grab in American History“ and sharing selected quotations here online. Usually, I select passages from a variety of authors, but Taibbi’s book is so remarkably quotable that I decided to share all of the parts of Griftopia I want to talk about in order - to strike while the irony is hot (and my memory is fresh) as it were.

In our first post, we looked at why it remains important to this day to help people recognize that the 2008 Financial Crisis was not a random storm in history, but a massive financial heist by wealthy speculators in the financial sector and from pretty much everyone else.

In our second entry, we examined the nature of the financial crisis by comparing it to a casino with the right to loan out money it would then take right back in as bets. We also examined Alan Greenspan’s role in fueling this wildly speculative economy and revealed that the 2008 Financial Crisis was hardly the first (or last) bubble economy at all.

Finally, yesterday we looked at the twisted, inconsistent and conveniently discarded ideological principles the rich and powerful have used (and continue to use) to justify all this criminal behavior.

In this fourth passage, Taibbi starts to get down into the nitty-gritty of the surprisingly straightforward series of scams, schemes and cons that helped fuel the 2008 crisis. Unfortunately there’s only so much text you can fit inside an image, so there’s three important takeaways here I’d liked to elaborate on a little further:

- as a result of widespread US deregulation of investment banking, financial institutions were allowed to use very questionable home loans to back their (already ridiculously under-capitalized) market speculations. This was preferable for banks for two reasons - because the return on investment of a mortgage-backed security was higher than the returns on (much safer) bonds, T-bills, etc, and because it now allowed the banks to double-dip, turning money lent out to home buyers into the ability to gamble more on the markets. Of course, the return on mortgage-backed securities was better than those safer investments precisely because it was a more risky proposition.

- naturally, just because banks can trade out T-bills for highly-lucrative mortgage-backed securities, doesn’t mean there are enough mortgages to satisfy all the banks looking to cash in on this largely unregulated financial opportunity. Naturally then, the desire by investment banks to acquire billions of dollars worth of mortgage-backed securities created the demand for millions upon millions of new mortgages - whether there were qualified buyers or not, and as we’ll see later on many of these “new home owners” were real estate investors themselves, and to some degree, in on the confidence game.

- finally of course, none of this would be possible without literally dozens of grifters and corporate fraudsters working all along the line to produce these mortgages. From crooked investment banks who took loans no matter how garbage they were, to shady real-estate agents pushing sub-prime mortgages on home owners who don’t know any better, to the ratings agencies that automatically stamped a triple-A rating on any toxic batch of fly-by-night loans the banks made - everyone who should have been working to protect either the home owners, or the investors was actually in on the job.

Unfortunately, I’ve spent the past couple of days fighting off a winter cold while lying in bed and yelling on Twitter; please forgive my absence.

As I mentioned in my most recent prior post, we’re currently examining Rolling Stone writer Matt Taibbi’s breakout 2010 non-fiction work “Griftopia: A Story of Bankers, Politicians, and the Most Audacious Power Grab in American History“ - you can find the first and second image blogs from Griftopia here and here, respectively.

This quotation comes from Gritopia’s second chapter, devoted entirely to the role of Alan Greenspan in helping to create and finance what Taibbi calls “the Grifter Archipelago - and appropriately titled “the Biggest Asshole in the Universe.” Truthfully, if I had planned this series of posts out a little better we probably should have started with this passage, especially since it ties in nicely to our previously-discussed quotation from Owen Jones’ “The Establishment and how they get away with it.” The simple truth is that understanding the fraud economy and the 2008 global financial meltdown requires understanding the now-sacrosanct ideology that inspired all this open criminality and theft.

So just who is Ayn Rand, how did her philosophy affect Alan Greenspan and why does any of this still matter today?

Interpreted charitably, Ayn Rand was a libertarian author and philosopher of dubious quality and questionable ideological consistency; you can find a more detailed examination of Taibbi’s critique of her work here. I’m not really interested in wasting a lot of time dissecting Rand’s “ideology” such as it is, but I think it’s fair to say that calling it “Objectivism” and releasing a book entitled “The Virtue of Selfishness” says a lot about how absolutely full of sh*t her movement is.

Despite this, or perhaps rather because of it, the works of Ayn Rand (who died in 1982, while receiving meager U.S. government assistance) have formed the “ethical” background behind the hyper-capitalist, right wing libertarian movement that has come to define establishment ideology (on both sides of the political divide) in much of the western world. When soon-to-be former Congressman Paul Ryan takes on new staffers, he infamously gives each of them a copy of Ayn Rand’s “Atlas Shrugged” and Friedrich Hayek’s “Road to Serfdom”  - two of the foundational texts of the surprisingly dodgy libertarian, market-worshiping, deregulated capitalist “insurgency” that represents the idealized ethos behind our modern rule-by-the-rich system in “the West.”

I say “idealized” because as both Taibbi and Jones explore in their respective books, these dashing laissez faire economic idealists are more than happy to throw away the “free market” when it comes time to give the rich and powerful another handout, or in the case of 2008 - prevent the ruling class from destroying itself and taking the global economy with it. In simpler terms, it’s socialism for the rich and powerful, backed by harsh capitalist realities for everyone else, especially the poor.

This “Randian” ideology then represents the front-end picture fed to the public by well spoken media propagandists, while on the back end the real “Masters of the Universe” are looting the public coffers like there’s no tomorrow - perhaps because there might not be one at the rate we’re going ecologically.

Understanding this discrepancy between what the elite establishment claims to believe, and how it behaves in practice is pretty important in this case because this inherent contradiction seemed to embody itself in the form of Alan Greenspan; a former friend and disciple of Rand who nevertheless found himself working in government and eventually became Chairman of the Federal Reserve in 1987. You can find more about Greenspan’s effect on the 2008 Financial Crisis in my previous “Griftopia” post but needless to say, Taibbi didn’t call him “the biggest asshole in the universe” because he was great at his job. In practice, Greenspan was a free-market, anti-regulation zealot when it came to refusing to restrict the behavior of investment bankers and rich speculators in any way, and a neoliberal stimulus messiah when it came time for those same gamblers to pay the price for their reckless behavior.

All of which brings us to the simple question, “why does this still matter today?”

Truthfully of course, it shouldn’t; after nearly four decades of increasingly rigid adherence to supply-side economics in the United States, and decades worth of Austerity in Europe, it’s more than fair to say that deregulated globalized capitalism has been a complete and utter failure for the vast majority of people in the west - a failure that literally represents an imminent threat to all life on earth. Of course, the “vast majority” of people does not mean “all” of the people and this ideology/economic policy has allowed a very small number of plutocrats to accumulate wealth beyond the wildest dreams of any Sultan, Czar or Emperor in human history and therein, lies the problem.

The very same ethics, ideology and economic policies that lead to the 2008 worldwide financial crisis remain in place primarily because they were quite effective for the rich and powerful elites who now completely dominate our politics, media and societal discourse. What’s more, these same elites are now rumbling about the possibility of yet another global financial crisis on the very-near horizon and already the “usual suspects” are lining up for public money to solve the banking/financial sector’s very private problems.

Those who do not learn from history, are indeed doomed to repeat it; and as a society, it would seem that the so-called western world has learned very little from the 2008 financial crisis. 

Unfortunately I’ve been out of commission for a few days because of a very sad event in my tiny little family - you can read more about it here if you like.

In the time that I was away, I found myself going over a well-worn copy of Matt Taibbi’s jaw-dropping “Griftopia: A Story of Bankers, Politicians, and the Most Audacious Power Grab in American History“ - which remains, in my estimation, the single greatest book written about the true underlying cause of the 2008 worldwide financial meltdown; the American fraud economy.

My edition of the book is the 2011 paperback copy, which comes with two additional essays Taibbi wrote that relate to Griftopia - specifically “Looting Main Street” and “Invasion of the Home Snatchers.”

Some may be tempted to ask why I’m sharing quotes about a “ten year old” economic crisis now, but I think (to some degree) that this viewpoint itself exposes one of the greatest tragedies of the whole situation - after all, the fraud economy that fueled the crisis has simply never stopped. The 2008 financial crisis is 10 years old, but it most certainly isn’t over.

The fact is most people, even ten years later, still don’t entirely understand what happened during the 2008 crisis - because they were simply never told by a mainstream media that serves the wealthy and powerful. This was gambling, fraud and theft, pure and simple. Furthermore that gambling, fraud and theft was made possible, made respectable after the fact, and allowed to continue to this very day, by the mainstream media and political actors you see on your TV screen even now, a decade “after” the crisis.

Literally nobody important has even gone to jail or even been significantly punished for these crimes but more importantly, nothing has been done to prevent the entire cycle from happening again - if anything, poorly regulated western financial institutions are actually *more* concentrated (and thus “too big to fail”) today than they were during the crash.

If we’re going to move forward and tackle the monstrous future that is now laid out before us, if we’re going to re-humanize the human experience on a global scale - then we’re going to have to come face to face with the fact that the global order is neither benevolent nor beneficial to most of us. People need to understand that rich people and their media cronies are not only openly lying to us while they squeeze the public sector for money they have absolutely no right to, but that they mean us real and direct harm. The truth is that rich people will kill you for pennies on the dollar, when it comes right down to it.

It’s hard to accept that you’re the sucker in a long con older than your grandparents, but that’s where we are. Until the vast majority of people accept the crisis for what it was, fraud, exploitation and theft - we’ll never be able to address a-still-existing global economic order based on, you guessed it, fraud, exploitation and theft.

And as a species, we’re running out of time to “get it” pretty quickly.

Reinstate Glass-Steagall

Regulate derivatives

Outlaw hedgefunds

Take away everyone’s guns, except the police and military.

If we can’t outlaw guns, ban assault riffles.

Outlaw criminals from owning guns.

If you really want to own a gun, you can only have access to ammunition at a firing range. 

Abortions are free and easy to obtain.

Universal healthcare

Bernie 2016!

Lock up Alan Greenspan until he dies for crimes against humanity.