Rolling Stone's Matt Taibbi appeared on CNN's Parker Spitzer and talked about how these TeaPublicans are out there voting against their own interests out of sheer frustration with our ailing economy are doing a lot of the heavy lifting for the investment banks with the help of these astroturf groups and the Koch brothers.
And as Matt points out, we've got a bipartisan problem when it comes to Wall Street's grip on our politicians. All the more reason to be pushing hard to get some campaign finance laws passed.
SPITZER: Few people have used language and metaphor to capture the public's anger over the financial crisis and those who bear the blame better than Matt Taibbi. His articles for "Rolling Stone" magazine have become legend on TV and in print.
PARKER: Matt Taibbi is our headliner, a contributing editor for "Rolling Stone" and the editor of the new book "Griftopia: Bubble Machines, Vampire Squids and a Long Con that is Breaking America." it's a scathing and often hilarious account of the financial crisis.
Matt, thanks for joining us tonight.
TAIBBI: Thanks for having me on.
PARKER: And to say it's hard to make the financial crisis funny, but you did that successfully.
TAIBBI: It is a very difficult job.
PARKER: And vampire squids, I'm just happy I got to say that on television. I want to read you a description that you wrote of Sarah Palin. You called her a "narcissistic money-grubbing hack." Don't you love being quoted?
PARKER: Anyway. So Sarah Palin obviously has a lot of followers. She's got the Republican establishment scared to death, so there must be something more to Sarah than just that, huh?
TAIBBI: Well, absolutely. I think one of the things that happened in the wake of this financial crisis, there was this enormous amount of anger and frustration in the population and people were looking for someone to offer them a simple solution, a simple answer for what happened and I think Sarah Palin and the Tea Party perfectly captured that anger. They found a way to crystallize all that frustration and aim it in a direction. You know, I would quarrel with the direction that they've aimed it in, but they've done a very good job at that.
SPITZER: I want to quote something you say in the book, a brilliant phrase and you say, "A lose definition of the Tea Party might be 15 million pissed-off white people sent chasing after Mexicans on Medicaid by a small handful of banks and investment banking companies," then you continue on. This merger of the anger being manipulated by the investment banks and Wall Street and as you point out, Wall Street is getting exactly what it wants and the public is getting virtually nothing to help it. How did that happen?
TAIBBI: Well, I think what they've done is they've -- there are -- people in America have a lot of frustrations about government, they have a lot of frustrations about regulation. You talk to these people -- I've talked to Tea Partiers who own hardware stores and restaurants and they're upset about things like health inspectors and ADA inspectors and these little nuances that they see as being government intrusion, but they conflate that with regulation of these giant banks like Goldman Sachs and JPMorgan/Chase and they think it's the same thing. And what they've managed to do is convince all these Americans to campaign for deregulation of these massive companies under the banner of, "let's get the government off our back."
PARKER: But the Tea Party's actually doing the work, the legwork for the big banks, how does that happen? How did they not know that that's what they're doing?
TAIBBI: Well, I think it was an organic process. I mean, people who say that the Tea Party isn't a grassroots movement, I think, are incorrect. I think in some respects, it is a grassroots movement. They were organized around a lot of local issues, but there were also powerful interests, the Koch brothers and other financiers, once they saw this movement happening, were more than willing to push it along and give it the energy and the resources that they needed to spread around the country.
SPITZER: You know, again, I want to quote you, because I think your words are just so good, and it comes to the title of the book, you say, and it comes back to what you just mentioned -- "There are really two Americas, one for the grifter class and one for everyone else. In everyone else land, the world of small businesses and wage- earning employees, the government is something to be avoided. In the grifter world, however, government is a slavish lap dog to the financial companies that will be the major players in this book use as a tool for making money."
Describe these grifters, the Goldman Sachs the JPMorgan/Chases and how they manipulate government to really use it to squeeze money out of the middle class.
TAIBBI: Well, I mean, a classic example is right after September 2008, a lot of these companies were going belly up and Morgan Stanley and Goldman Sachs, they apply to the government for an overnight change in status from investment banks to they become commercial banks overnight, which allows them to essentially collect money from the fed at zero percent interest. And a lot of these banks turned around and they took money at zero and they lent it right back to the government at three...
SPITZER: When's the last time anyone else in the world called up a government bureaucrat at 5:00 and said, I need an answer, and got it by 7:00 the next morning?
TAIBBI: Right, right. And not only that...
SPITZER: And a check for $20 billion.
TAIBBI: And a check for $20 billion. I mean, the law mandated a five-day waiting period, which is nothing, already, and they got it overnight on a Sunday night, these banks. They called up on a Sunday night and they got the change the next morning.
SPITZER: But to come back to the point that you so eloquently describe. The moment the banks got their money, they suddenly persuaded the Tea Party to start rallying for shutting down the government's ability to help anybody else, not a single mortgage person whose house was underwater had a bankruptcy judge sort of to undo the mortgage because the Senate forbade that and the banks lobbied against it. What was going on here?
TAIBBI: Well, again, I just think that there was this enormous sentiment against government intrusion and after Obama got elected and they had the stimulus and the homeowner Affordability Act, ordinary people had not seen the bank bailouts. They didn't actually see that happen. They didn't see the trillions of dollars that went to Goldman Sachs and JPMorgan/Case, but they did see these programs that went to minority homeowners, poor minority homeowners, their next-door neighbors. And when they saw the government bailing out those people, that's when they got angry. And again, they confused the two issues.
PARKER: But you do make a -- you're very generous in acknowledging that there are legitimate grievances, people have legitimate grievances against local and state governments, but your point is that they shouldn't conflate that with things...
TAIBBI: It's a completely -- two completely different worlds. The world of, you know, the small business owner who has to deal with small government intrusions, these small regulations and this other world that exists in the stratosphere where Goldman Sachs and JPMorgan/Chase and other guys who are on the phone with these guys who used to work in their companies and they're basically making the rules of the game as they go along, that is something entirely deferent then what ordinary people do for...
PARKER: You make the case that Alan Greenspan and Goldman Sachs are criminals. I mean, you make a pretty strong case for that. Why are you the only person saying that?
TAIBBI: Well, I think I'm not the only person saying that, I think there are...
PARKER: Other than Eliot.
TAIBBI: Other than Eliot, maybe. I mean, Greenspan is a separate case entirely, but clearly the banks during the mortgage bubble we were engaged in a massive fraud scheme that was essentially designed to take subprime or very risky mortgages and pawn them off on other people as AAA rated investments. This was something they did with their eyes wide open and it was a catastrophe for the entire world, basically, and nobody has gone to jail for this and instead, we're blaming the people who actually borrowed these mortgages and they're the villains in the crisis.
SPITZER: And it gets worse because the fed that Greenspan chaired that Tim Geithner ran in the New York fed, had direct responsibility for overseeing this entire complex relationships, direct statutory responsibility and Geithner, when he was being confirmed by the United States Senate said, "I've never been a regulator," an outright silly, false statement. And so they completely claimed lack of responsibility when they were at the vortex of every piece of this.
TAIBBI: It even got worse than that, Alan Greenspan was actually encouraging ordinary Americans to take out option ARM mortgages. They were actually saying, he was actually saying that fixed 30-year mortgages were sometimes a bad idea, and that people could get more value out of option ARMs, which ended up blowing up the universe. When America's biggest regulator makes suggestions like that, it has a lot of weight.
SPITZER: Now, you spent a lot of time with the Tea Party folks and you kind of are tough on them, but you understand -- to quote our former president, you "feel their pain." How do you get those pitchforks directed in the right direction again?
TAIBBI: Well, it's very difficult. I think you have to try to -- what I'm finding, as I travel the country, is that more and more people actually do understand what happened. And the reason that they understand is because they are personally confronting some aspect of the financial services industry, whether it's because, you know, I met somebody in Kentucky a little while ago who lost 20 percent or 30 percent of his pension fund value, because the state had invested in mortgage-backed securities, or whether they'd been wiped out by credit card debt or they're being foreclosed upon, people are being forced to get an education in all these things and they're slowly coming around to what happened in the last 10 or 15 years, but it's a very, very gradual progress.
PARKER: Well, you said that when you were at the Republican convention, last time around, you were unaware that in two weeks the whole economy was going to collapse and everybody else was unaware, because we just weren't paying attention. But you also talk about seeing Sarah Palin up there on the lectern and saying -- you were sort of prepared to kind of be bored and walk out pretty quickly and try to find your car, right? But instead, something else happened, you saw this person who was saying amazing things. How do you see her role now in our culture and our political environment?
TAIBBI: I have the same reaction to Sarah Palin when I saw Barack Obama speak for the first time in person. I said, this is a gifted politician, this is a person who has the ability to connect with people on an emotional level, beyond even what she was saying. The words of her speech, the effect went beyond that. And I think that that's continued to be true, despite a lot of the, you know, the missteps that she's made in public. She continues to connect with people on an emotional level. She brings out these crowds, and I think that she obviously has a big future in presidential politics. It just remains to be seen what she's going to end up standing for.
PARKER: But you talk about the class warfare that she's created. That's a big negative, don't you think, for our country?
TAIBBI: Well, I was very struck in her speech about how she talked about how she was from a small town and the small towns are where people do the most work. And there was this emphasis in her speech...
PARKER: We don't work in New York at all.
TAIBBI: Right, right. It was all about, there are people who do work and then there's this other group of people who apparently don't work and these people are carrying the weight for these people. And that ended up being a prominent theme in the Tea Party mythology that they're carrying the taxes, they're carrying the water, and somebody else is drinking the water and she was very, very skillful in presenting that message. PARKER: And who are those somebody else's who are drinking the water, as you say it?
TAIBBI: Well, they never say it, but it's pretty clear that they're talking about low-income and usually minority people, and immigrants, who are taking up most of that burden.
PARKER: Are they vampire squids?
TAIBBI: No, but that's what's so amazing about it, is that this mythology came at a time when we were giving what, $9 trillion, $10 trillion to the banking sector out of the public's pocket and that wasn't what they were complaining about.
SPITZER: And that is what mystifies me. Why has no politician, Barack Obama or even a Dennis Kucinich or a Senator Feingold or Barry Sanders, so many that are really smart -- or Carl Levin -- stood up and explain, wait a minute, the guys who are really sucking the blood out here are Wall Street and so let us redirect that and then claim the allegiance of that universal people who compromise the Tea Party and say, here is whom you should be angry at.
TAIBBI: Yeah, no, absolutely. You know, after the financial crisis in 2008, after Barack Obama got elected, I heard from a lot of people on Wall Street, who are sources of mine, who said, "Where are the Democrats? Where's that politician? This is a teaching moment. This is an opportunity for the politicians of our country to say, 'this is what's been happening in the last 10 or 15 years. You've been getting screwed over by these people.' And nobody stood up and did that." Instead, I think the Democrats kind of took the fork in the road and they tried to save Wall Street and communicate to their voters at the same time. It just didn't work.
SPITZER: They were co-opted and became the voice of the status quo.
SPITZER: Last question I got for you, who are your heroes? Is there anybody in this process where you can say, look, there's somebody who's doing it right, who's trying hard? Is anybody kind of speaking for the public?
PARKER: Basically, we see that you don't really like anyone.
TAIBBI: Well, clearly, governor, you were one of my heroes...
SPITZER: Thank you, but that's not why I asked the question.
TAIBBI: No, but I mean, there were politicians in this process who were standing up, I mean, Ted Kaufman of Delaware was somebody who was a great help to me. I mean, I need people to explain a lot of this stuff to me and it was people like Ted Kaufman, Bernie Sanders was another guy. There were a lot of people on Wall Street who just were ordinary traders who called me up and helped me out. I think there are -- there's an opportunity for politicians out there, and there are a few of them, Sherrod Brown, Ron Merkley, who are trying to do the right thing, but it's just a very, very, it's a uphill climb for politicians in this climate.
PARKER: All right, well, thank you so much for being with us. This is fascinating. Appreciate your coming.
TAIBBI: Thank you very much for having me.
SPITZER: Keep using those metaphors. We love them.
SPITZER: We'll be right back.
PARKER: Look out for the vampire squid.
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