Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America
by Matt Taibbi
(Spiegel & Grau 2010)
In July 2009, Matt Taibbi caused a stir with his controversial article “The Great American Bubble Machine,” which offered a brutal assessment of the role of Goldman Sachs in America’s economic crisis. Taibbi was lauded and criticized in equal parts, and the Rolling Stone writer, who to that point had focused primarily on the absurdity of American political theater, launched himself wholly into analysis of our deeply broken financial system. The first major product of this shift is Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America. This new book, released in early November, is a more comprehensive look at what, and who, was responsible for the mess we now find ourselves in. It reveals an American economy taken over by criminals, con-artists, and grifters, who, according to Taibbi, are using their incredible influence in business and political circles to bleed America dry.
Taibbi guides the reader through the basic elements of the crisis, the various bubbles that burst as the economy collapsed. Within this structure, he is able to use a wonderful narrative style to help explain many of the complex financial terms and issues that can be very difficult for people outside of Wall Street to understand. If you’re finally ready to figure out just what securitization, credit default swaps, and derivatives actually are, and how they were actually used, Griftopia is an excellent place to start. On top of this crash course in Bubble Economics 101, Taibbi manages to tell this despairing story in a fitting way, parts scathing, parts bemused, parts despairing, all with the biting sense of humor that his fans have come to know and love. Perhaps the best example of the way Taibbi both explains and entertains is in his recounting of the now infamous meeting held at the Federal Reserve Bank of New York in mid-September of 2008, when the American International Group (A.I.G) was on the cusp of a complete breakdown, and the pensions and retirement funds of hundreds of thousands of Americans were on the line. It is here where Taibbi takes another shot at the folks at Goldman Sachs, which Taibbi claims “held the thousands of A.I.G. policyholders hostage, all in order to recover a few billion bucks they’d bet.” Through this staggering account, Taibbi is able to convey the factors at play, and the astonishing behavior of those involved.
While Taibbi should be praised for his decision to try to understand and explain perhaps the most important story of our time, he is at heart a political writer, and he is at his best when he is detailing the role of politics in this disaster and the collusion between business and politics that he says is destroying America. His frank appraisal of the ridiculous Tea Party is both original and poignant. But it is in his exposé of the backroom dealings that led to the watered-down health care bill, which Taibbi suggests, “might very well have been the worst bill ever to make its way through both houses of Congress,” where he is at his absolute peak. Showing the ruthless manner in which President Obama and the Democrats operated to offer health insurance companies massive subsidies and try to pass it off as substantive reform, Taibbi perfectly illustrates the havoc that the corporate takeover of the American political apparatus wreaks on all sides. His look at the way these insurers are able to completely avoid antitrust law is a stunning example of just how restricted we are in doing anything substantial. Taibbi declares:
There will be a lot to say about health care for years to come, but the most important thing about it is that it proved the government’s utter helplessness to police whole sectors of society. Forget about fixing the health care industry; what President Obama proved to America is that his government couldn’t even win back the right to truly regulate this massive industry, even with a historic mandate at his back and after giving away everything he had to trade, conceding even the power to tax.
Griftopia is something of an announcement for Taibbi himself, one he still manages to display in his ability to synthesize various political factors while showing that he is moving into new territory, and one which is essential to furthering our understanding of the strange relationships of power at play in the blurred lines of policy and profit.
Unlike much of the writing that has attempted to explain exactly what happened to our economy, Griftopia manages to make sure that the reader does not forget that what happens at the top really does impact the lives of real people at the lower ends of the economy. Through a series of respectful and touching stories, Taibbi is able to make the connections between the way that powerful people and groups manage to take advantage of the American people. For Taibbi, the crisis seems a perverse off-shoot of trickle-down economics, where instead of rewards, much of the population is handed refuse. He sums up the way so many get reeled in with this passage:
The grift in America always starts out with a little hum on the airwaves, some kind of dryly impersonal appeal broadcast over the skies from a high tower, an offer to sell something—help, advice, a new way of life, a friend at a time of need, the girl of your dreams. This is the way the ordinary American participates in this democracy: he buys. Most of us don’t vote more than once every four years, but we buy stuff every day. And every one of those choices registers somewhere, high up above, in the brain of the American Leviathan.
One of the interesting dualities of Taibbi’s writing is the way he manages to display both real sympathy for people and, at times, real disgust for them as well. With this method, he is able to hand out blame to everyone, refusing to let anyone fully abdicate responsibility, while being willing to blame some far more than others. At points, the reader sees Taibbi genuinely flustered by the moronic behavior of ordinary people; at others, he tells important tales of Americans lost in the greater scheme. A lost house, the inability to fill up the tank, insurance denied: these are the realities of life in the grifter’s paradise.
Just as they did when Taibbi first railed against Goldman Sachs over a year ago, many will be put off by not necessarily what he says in this book, but how he says it. Taibbi is scathing and raucous, employing hyperbole and humor to make a greater point, in similar (although not quite as convincing) fashion to one of his heroes, Hunter S. Thompson. But, as Taibbi rightly points out, attacking the upper class of America is often ridiculed as overly dramatic or insanely conspiratorial. While discussing the reaction to the Rolling Stone piece, Taibbi writes:
Looking back now, what I experienced in the wake of the Goldman piece was a lesson in a subtle truth about class politics in this country. Which is this: you can pick on the rich in an ironic, Arrested Development sort of way, you can muss Donald Trump’s hair, you can even talk abstractly about class economics using clinical terms like “income disparity.” But in our media, you’re not allowed to just kick the rich in the balls and use class-warfare language.
That Taibbi is willing to call this group just how he sees it is perhaps the single most important part of Griftopia. He is refusing to accept the marginalization of class analysis that plagues the discourse in this country. He writes with outrage, because the situation is outrageous. Most economic analysts try to argue that many of the problems came from incompetence, or that it is simply human nature that is to blame. Who could hold it against these people for wanting too much? How un-American! Taibbi refuses to accept this type of mitigation, and the result is the harsh, but fair, tone in which this book is written.
Taibbi has never claimed to be an expert in the world of finance, but his desire to learn and his quest to tell these stories is certainly laudable. Just in time for Thanksgiving, Taibbi released his first major piece for Rolling Stone since the publication of Griftopia, an inside look at the hideous workings of a foreclosure court in Florida. Taibbi’s new direction has an air of repentance about it, as though he is making up for lost time. He seems to feel the need to apologize for ignoring these issues for so long, having occupied his time instead, on campaign trails, “watching to make sure X candidate keeps his hand over his heart during the Pledge of Allegiance and Y candidate goes to church as often as he says he does, and so on.” Griftopia is proof that it is better to get the story late than never.