Ebook Info
- Published: 2014
- Number of pages: 448 pages
- Format: PDF
- File Size: 5.71 MB
- Authors: Matt Taibbi
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NEW YORK TIMES BESTSELLER • NAMED ONE OF THE BEST BOOKS OF THE YEAR BY THE WASHINGTON POST, NPR, AND KIRKUS REVIEWSA scathing portrait of an urgent new American crisis Over the last two decades, America has been falling deeper and deeper into a statistical mystery: 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. In search of a solution, journalist Matt Taibbi discovered the Divide, the seam in American life where our two most troubling trends—growing wealth inequality and mass incarceration—come together, driven by a dramatic shift in American citizenship: Our basic rights are now determined by our wealth or poverty. The Divide is what allows massively destructive fraud by the hyperwealthy to go unpunished, while turning poverty itself into a crime—but it’s impossible to see until you look at these two alarming trends side by side. In The Divide, Matt Taibbi takes readers on a galvanizing journey through both sides of our new system of justice—the fun-house-mirror worlds of the untouchably wealthy and the criminalized poor. He uncovers the startling looting that preceded the financial collapse; a wild conspiracy of billionaire hedge fund managers to destroy a company through dirty tricks; and the story of a whistleblower who gets in the way of the largest banks in America, only to find herself in the crosshairs. On the other side of the Divide, Taibbi takes us to the front lines of the immigrant dragnet; into the newly punitive welfare system which treats its beneficiaries as thieves; and deep inside the stop-and-frisk world, where standing in front of your own home has become an arrestable offense. As he narrates these incredible stories, he draws out and analyzes their common source: a perverse new standard of justice, based on a radical, disturbing new vision of civil rights. Through astonishing—and enraging—accounts of the high-stakes capers of the wealthy and nightmare stories of regular people caught in the Divide’s punishing logic, Taibbi lays bare one of the greatest challenges we face in contemporary American life: surviving a system that devours the lives of the poor, turns a blind eye to the destructive crimes of the wealthy, and implicates us all.Praise for The Divide “Ambitious . . . deeply reported, highly compelling . . . impossible to put down.”—The New York Times Book Review “These are the stories that will keep you up at night. . . . The Divide is not just a report from the new America; it is advocacy journalism at its finest.”—Los Angeles Times “Taibbi is a relentless investigative reporter. He takes readers inside not only investment banks, hedge funds and the blood sport of short-sellers, but into the lives of the needy, minorities, street drifters and illegal immigrants. . . . The Divide is an important book. Its documentation is powerful and shocking.”—The Washington Post “Captivating . . . The Divide enshrines its author’s position as one of the most important voices in contemporary American journalism.”—The Independent (UK) “Taibbi [is] perhaps the greatest reporter on Wall Street’s crimes in the modern era.”—Salon
User’s Reviews
Editorial Reviews: Review “Ambitious . . . deeply reported, highly compelling . . . impossible to put down.”—The New York Times Book Review “These are the stories that will keep you up at night. . . . The Divide is not just a report from the new America; it is advocacy journalism at its finest.”—Los Angeles Times “[Matt] Taibbi is a relentless investigative reporter. He takes readers inside not only investment banks, hedge funds and the blood sport of short-sellers, but into the lives of the needy, minorities, street drifters and illegal immigrants, to juxtapose justice for the poor and the powerful. . . . The Divide is an important book. Its documentation is powerful and shocking.”—The Washington Post “Captivating . . . The Divide enshrines its author’s position as one of the most important voices in contemporary American journalism.”—The Independent (UK)“Taibbi [is] perhaps the greatest reporter on Wall Street’s crimes in the modern era.”—Salon “[Taibbi’s] warning is all about moral hazard. . . . When swindlers know that their risks will be subsidized . . . they will surely commit more crimes. And when most of the population either does not know or does not care that the lowest socioeconomic classes live in something akin to a police state, we should be greatly concerned for the moral health of our society.”—The Wall Street Journal “Trenchant . . . a scathing, accessible, and often riveting look at the U.S. finance industry and justice system.”—Publishers Weekly “Readers with high blood pressure should make sure they’ve taken their medication before reading this devastating account of inequality in our justice, immigration, and social service systems. Taibbi’s chapters are high-definition photographs contrasting the ways we pursue small-time corruption and essentially reward high-level versions of the same thing.”—Kirkus Reviews (starred review) About the Author Matt Taibbi has been a contributing editor for Rolling Stone and the author of five previous books, including the New York Times bestsellers The Great Derangement and Griftopia. He lives in New Jersey. Excerpt. © Reprinted by permission. All rights reserved. Chapter 1Unintended ConsequencesTuesday, July 9, 2013, a blisteringly hot day in New York City. I’m in a cramped, twelfth-story closet of a courtroom, squeezed onto a wooden bench full of heavily perspiring lawyers and onlookers, watching something truly rare in the annals of modern American criminal justice—the prosecution of a bank.The set for this curiosity is the city’s 100 Centre Street courthouse, a beat-up old building located far downtown, just a stone’s throw from the thicket of gleaming skyscrapers housing the great financial powers of Wall Street.It’s a pretrial hearing. The defendants—nineteen individuals plus the corporation itself—are here today to argue a motion to dismiss. There’s no press here that I can see, despite the historic moment. And it is historic. This case, filed by New York County District Attorney Cyrus Vance Jr., represents the only prosecution of a bank to take place anywhere in America since the collapse of the world economy in 2008. (In fact, it’s the first since the early 1990s.)So who’s the defendant? Is it Citigroup? Goldman Sachs? Wells Fargo? JPMorgan Chase? Bank of America? After all, these companies had all been involved in countless scandals since the financial crisis of ’08, a disaster caused by an epidemic of criminal fraud that wiped out some 40 percent of the world’s wealth in less than a year, affecting nearly everyone in the industrialized world. If ever there was a wave of white-collar crime that cried out for a criminal trial, it was this period of fraud from the mid-2000s. And it would make sense that the defendants should come from one of these companies. In the years since the crash, all of them, and a half-dozen more too-big-to-fail megafirms just like them, had already paid hundreds of millions of dollars in civil settlements for virtually every kind of fraud and manipulation known to man.Moreover, District Attorney Vance had once seemingly had all these Wall Street firms in his sights. He’d sent subpoenas out to Goldman and other companies the previous year. So surely one of these banks in those big skyscrapers a few blocks south of here must be the one on trial.Nope. In the end, the one bank to get thrown on the dock was not a Wall Street firm but one housed in the opposite direction, a little to the north—a tiny family-owned community bank in Chinatown called Abacus Federal Savings Bank.As a symbol of the government’s ambitions in the area of cleaning up the financial sector, Abacus presents a striking picture. Instead of a fifty-story glass-and-steel monolith, Abacus is housed in a dull gray six-story building wedged between two noodle shops at the southern end of New York’s legendary Bowery, once the capital of American poverty.This is the bank in court today, dragged to the cross to take the blame for the many sins of the financial sector. It is a grimly comic scene. The judge, the Honorable Renee White, is a legendary city curmudgeon, a wraithlike woman with a long turtlish neck and orange hair who seems unhappy not only to be listening to a motion to dismiss but to be on planet Earth at all.Before the hearing began, in fact, she’d barked at a young Chinese woman who’d had the audacity to dip her head near the floor to sneak a drink from a water bottle in her bag, trying to fight off the stultifying heat. “No refreshments!” the judge yelled. “You should have had your lunch before you came to this courtroom!”The young woman meekly put her bottle back into a bag. Judge White craned her long neck and glared. A burly bailiff, acting as many bailiffs do—as the physical manifestation of his judge’s whimsy—hovered angrily past to make sure the offending bottle was no longer visible.“Is she always like this?” I whispered, to no one in particular.“What are you talking about?” a lawyer in front of me answered. “She’s in a good mood today.”Judge White frowned and then went about the dreary task of reseating the courtroom. She sent Cantonese-speaking defendants to her left, Mandarin-speaking defendants to the right, and had a single translator plopped into the middle of each bewildered group.Some of the accused were low-level loan officers, immigrants mostly, who had been as young as twenty-one or as old as seventy at the time of arrest. None of them were what one would describe as wealthy persons. None were millionaire CEOs of the Jamie Dimon/Lloyd Blankfein ilk. Instead, they were mostly Chinese immigrants in cheap blouses and worn suits, people who spoke little English or none at all, and who looked white with shame and confusion as they huddled around their respective translators.Many of these criminal masterminds had been earning as little as $35,000 a year at the time they were hauled in for what the state described as a far-reaching scheme to falsify loan applications for home mortgages that their bank, Abacus, ultimately went on to sell to the government-sponsored mortgage dealer, Fannie Mae.What were these nineteen people charged with? The case had been sold to the court and to the public—by Vance, mostly—as having something to do with the financial crisis, setting up the bank as a scapegoat for the 2008 blowup. Vance bragged that it was the first indictment in New York of a bank since the BCCI crisis in 1991, and he subtly compared Abacus to the aforementioned bailout all-stars like Citigroup and Bank of America, ostensibly the true villains of the financial crisis, by warning that Abacus’s crimes might ultimately lead to the taxpayer footing the bill. “If we’ve learned anything from the recent mortgage crisis,” he said, “it’s that at some point, these schemes will unravel and taxpayers could be left holding the bag.”Vance made sure to play rough with the defendants, just to let them know how angry The People were about the financial crisis. In an extraordinary scene over a year before, on May 31, 2012, Vance had hauled all nineteen of the Abacus defendants into court to face indictment. For the benefit of the press, he had them chained not only at the hands and feet but to one another.This otherworldly chain gang of bewildered immigrants had been led into the courtroom like a giant, slow-moving snake. It was like a scene out of Bagram or Guantánamo Bay—all that was missing were the hoods.Incredibly, three of the nineteen people who were put in chains had already been arraigned by Vance and released on bail. Prosecutors had asked them to voluntarily report to court that day, and they came, having no idea what for. When they appeared, Vance had had them cuffed and chained all over again, then paraded into court to be rearraigned, purely for the benefit of the cameras.“I’m no softie on crime,” says Kevin Puvalowski, the attorney for Abacus and a former federal drug prosecutor. “But I’ve seen death penalty defendants treated with more dignity.”Again, on the same day as this bizarre photo op, Vance had stood up in a press conference and described the indictment of Abacus as a direct blow against the behavior that had caused the financial crisis. “The lessons of the financial crisis are still being learned,” he said sternly.And in its limited coverage of the case, the press mostly upheld the notion that the Abacus indictment was aimed at the heart of the financial crisis. “The indictment against the bank and its employees describes the sort of scheme that led to the financial crisis of 2008,” wrote The New York Times in a typical account, “when the risk of mortgages to borrowers was disguised and passed on to investors.”As for Vance, he got what he wanted out of the presser: a trophy. In subsequent coverage in newspapers like The Wall Street Journal, he would henceforth be referred to as the DA who “indicted a bank for mortgage fraud.”But this case had nothing to do with the financial crisis. In fact, it was clear just from reading the indictment that the improprieties uncovered at Abacus were highly idiosyncratic and specific to Chinatown’s immigrant population. Though tax evasion wasn’t part of the case, it lurked in the background. Clearly, many mortgage applicants, who worked in cash businesses in the immigrant Chinese community, had not wanted to declare all their income.After the Abacus indictment, in fact, I heard whispers from a police source with long experience in Chinatown that some of the bank’s customers may have been involved in schemes like trademark counterfeiting—not exactly a surprise, since it’s hard to visit Chinatown and not run into someone selling phony Prada bags or Rolex watches out of the back of a van somewhere.Thus the underlying crime in this case seemed to be that Abacus’s customers could afford to pay for a mortgage but didn’t want to say how, exactly. They had been, in other words, not overreporting but underreporting their incomes.There was also a bizarre racial component to the case. Buried in the charges was the thinly veiled assumption that Abacus senior management encouraged their borrowers to commit fraud in their applications because they knew they could rely upon the generally accepted cultural proposition that Chinese people, like the evil Lannisters in Game of Thrones, always pay their debts. Vance’s indictment more or less says this out loud, claiming that Abacus management “falsely told employees that the exceptionally low default rate of Abacus-originated loans made the underlying accuracy of loan documents insignificant.”The description had been true—the Abacus mortgage holders had paid their debts. In fact, from the date of the first offense as defined by the prosecutors, the quasi-governmental Fannie Mae had made a profit of $220 million on Abacus-issued home loans. In all, Abacus had one of the lowest default rates in the entire country. It was about 0.5 percent, roughly ten times better than the average.Thus this was a very different kind of case from the more common fraud of the financial crisis era, which mostly involved gigantic banks and mortgage lenders selling the toxic and ultimately worthless subprime mortgage loans of broke and underemployed middle Americans as AAA-rated investments to state pension funds, foreign trade unions, and other suckers. Abacus was almost certainly a case about hiding income; the financial crisis was caused by a snake-oil scheme to sell worthless loans as gold.Everyone got what they wanted from the Abacus prosecution. The city got to say it was being tough on financial crime. The press got to run a thrilling picture of harsh justice. Vance got a line to add to his résumé. The only losers were the public, who had no idea that the real culprits for the financial crisis were being set free, while the bank on trial had nothing to do with the losses that had been suffered by almost every ordinary American in the crash. As one city investigator put it, Abacus was “the Lee Harvey Oswald of banks— a patsy.”In any case, this same collection of freaked-out immigrant patsies were back in court now, this time without their chains. Most of the defendants had their own lawyers, as did the bank itself, so the courtroom was fairly packed with defense counsel. Most of these defense lawyers had filed “Clayton motions,” a New York state legal procedure in which a defendant can ask a judge to dismiss charges on the general grounds that doing so would be in furtherance of justice.Among other things, a Clayton motion asks the judge to consider “the purpose and effect” of punishment and the “impact on the public interest” of a dismissal. They are motions, in other words, that ask a judge to consider the consequences of prosecution, balanced against the public interest.One by one, defense counsel stood up to argue to the ostentatiously bored Judge White why their clients should be let go. Some argued their clients were too old or too young, or had been at the bank for only a few months, or had never in their whole lives been in trouble with the law. (They virtually all argued that.) Some said their clients had been new on the job and had simply filled out a few papers incorrectly according to the instructions of superiors. The list of reasons for leniency went on and on.But finally one of the defense lawyers, a former city prosecutor named Sanford “Sam” Talkin, a man with a deep tan and a neatly shaven head, got to a larger and more dangerous point. Gently waving a hand in the direction of the Abacus defendants, Talkin confronted Judge White. “Your Honor,” he said, “I want you to compare them to Citigroup. Just last week Citigroup settled for $968 million for either underperforming or defaulted home loans. . . .“But this pales in comparison to Bank of America, which paid $6.8 billion dollars, with a b, for underperforming or defaulted home loans. Civil settlement, no criminal charges . . . Wells Fargo Bank, $3.3 billion, no criminal prosecution . . . Ally GMAC, $3.3 billion, civil settlement, no criminal charges. JPMorgan Chase . . . another $3.3 billion for the same purpose, civil settlement, no criminal charges.” Read more
Reviews from Amazon users which were colected at the time this book was published on the website:
⭐There are many ways to divide people; race, religion, location, gender, age, level of education, and more. What Matt Taibbi explores in his research is the divide in America between our wealthiest and our poorest, because, as he was shocked and saddened to discover, while the original sin of the Orwellian dystopia was thoughtcrime, “in our new corporate dystopia the secret inner crime is need, particularly financial need.” The more you need and the less you have, the fewer rights you also have. And, conversely, the more you have and the less you need, the more rights you are granted, even beyond what is actually written into the laws. “On the extreme ends of this spectrum it is literally a crime to be poor, while a person with enough money literally cannot be prosecuted for certain kinds of crimes.” This is epitomized by the poor black man from the projects who can get picked up and prosecuted for riding his bike on the sidewalk while the CEO’s on Wall Street violate insider trading laws ten times a day and are celebrated for savvy financial strategy.To most of us average citizens, this reality is very hard to understand, let alone even believe in. But let me ask you this: Have you ever been arrested by the police for standing on the sidewalk out front of your house? Andrew Brown of Bedford-Stuyvesant, Brooklyn has. Another victim of New York City’s notoriously terrible and racist Stop and Frisk policing policy, where the cops arrested first and asked questions later, Brown was standing on the sidewalk in front of his apartment building talking to a friend at one in the morning on a quiet night in November of 2012. The police approached, questioned them, and tossed the men in the back of separate vans to be brought to the station for the standard questioning, strip search, and court summons. His offense? Blocking pedestrian traffic. Blocking whom exactly is the million dollar question, one that cannot be answered, because it was one in the morning and there were no other people present. Brown was simply caught in the massive drag net the NYPD throws over the poor neighborhoods of the city. Thats the strategy anyways: catch all the fish, see who has guns or drugs, and throw the rest back, Amendment rights be damned.While the lower classes of Americans like Andrew Brown are penalized for ‘committing’ these types of petty crimes, there is an entire upper class of citizen that is above the law. This flip side is embodied by hedge funds and too-big-to-fail Wall Street banks who borrow money from the Federal Reserve at far below market interest rates, through the Fed’s emergency lending program, and turn around and make a profit off loaning it to people for mortgages, businesses, and credit cards. While they have been profiting off of insider trading for decades (revealed in recent Senate testimony), their most egregious behavior exploded in grand fashion in 2008, when the American housing market collapsed and the financial repercussions reverberated around the entire globe. In his book, Taibbi walks us through the backroom deals made at the time, when Lehman Brothers were staring down the barrel of bankruptcy, in addition to Washington Mutual, and others. The British banking behemoth Barclays acquired Lehman Brothers (and all of their assets) for a fraction of their worth. Likewise, Washington Mutual was bought out by Bank of America in a similar shotgun-style wedding.Why were these banks facing bankruptcy in the first place and forced to sell? Because they were knowingly accepting fraudulent loans for years. Loaning someone money to buy a house when they have no recognized source of income and have put zero money down on the initial purchase is incredibly irresponsible lending, but that is exactly what they all did, because they knew the Federal Reserve would bail them out with taxpayer money if anything went south. This is exactly what happened when the housing market blew up in 2008 and the Fed was forced to ‘rescue’ the banks for fear of what letting them fail might cost. What was the result of all of this? Not a single member of any hedge fund or Wall Street institution was indicted or seriously investigated. Nobody has seen a day in jail, and they won’t, because the crimes they committed were the ‘right’ kind.In the intro to his book, Taibbi asks his readers a very important question: “What deserves a bigger punishment—someone with a college education who knowingly helps a gangster or a terrorist open a bank account? Or a high school dropout who falls asleep on the F train?” In America, we believe it’s the latter, despite the fact that senior members of several of the largest banks in the world have been caught doing the former. (HSBC was found to have knowingly laundered money from the Sinaloa Drug Cartel, and while their executives got off scot-free, the people who bought the dime bags that HSBC so thoughtfully enabled the cartel to sell can spend years in prison.) In America, we punish those who are easily punishable, and let the big fish swim away. It has become baked into our cultural ethos.When people on welfare fill our their application wrong and ‘commit fraud’ by accepting $50 more in food stamp money than they should be allotted, the system penalizes them in the form of fines, community service, numerous court dates, and jail (as if being poor isn’t already bad enough). When the bankers and hedge fund managers commit fraud on a mass scale, forging signatures on court documents or accepting fraudulent loans because they know the Fed has their back, their members are never personally culpable and never have to admit fault. The details of these ‘white collar crimes’ are often much too arcane and the government is unable or unwilling to effectively investigate or prosecute. If anyone is prosecuted, they simply dance through a few legal loopholes, pay a laughably minimal fine, and continue on their merry way. It’s the regular people who suffer, as the city of Long Beach can attest too.A few weeks before Lehman Brothers collapsed, the Long Beach city council voted to invest $20 million with the bank in the hopes of growing the fund. Even now, years after the collapse of Lehman Brothers, Long Beach has been enacting sweeping budget cuts. “In the first year after Lehman’s collapse, the Long Beach school system cut summer school classes and bus routes for one thousand students. The city announced plans to lay off thirty-four policemen and close at least one fire station. The mayor asked the city council to cut all funding for the Long Beach Museum of Art. And the city continues to be way behind the financial eight ball. In fact, its projected deficit for 2013 almost exactly matches the Lehman shortfall—$20.3 million.” Almost ubiquitously, the higher ups on Wall Street walk away richer, often on the taxpayers dime. Similarly, it is always the regular people who suffer the consequences. Not just the Andrew Brown’s of the country, but also the Latin immigrants who get picked up by ICE on a daily basis and shipped off to rural Mexico, or the welfare mothers who ‘commit fraud’ by claiming money from the state just to feed their starving children. All while Wall Street continues to enrich itself by playing a rigged game.The scariest part about all of this is that the divide is growing and becoming more severe. It is no secret that the wealth in this country has been exponentially going to the top richest few, but the body of poor, lower-class citizens has also been exponentially increasing. As more and more people fall into poverty, the drag net for losers also increases in size and scope. “It all adds up to a system that has many of the features of a police state, right down to the nagging omnipresence of the police in the daily lives of the target community.” This is the real divide in America: that between those who are financially above the law and those who are beneath it. They are mostly out of sight of the general public, and entirely out of sight from one another, but they are both growing, and eventually one side will tip the scale.
⭐The Divide: American Injustice in the Age of the Wealth Gap by Matt Taibbi“The Divide” is an eye-opening book that paints a clear picture of what is the biggest divide in our society, the wealth gap. Investigative journalist Matt Taibbi takes the reader on a journey of social injustice. Through a series of heartbreaking stories, Taibbi clearly shows the impact that this divide has on our citizens from each perspective. This troubling 448-page book includes the following nine chapters: 1. Unintended Consequences, 2. Frisk and Stop, 3. The Man Who Couldn’t Stand Up, 4. The Greatest Bank Robbery You Never Heard Of, 5. Border Trouble, Part 1, 6. Border Trouble, Part 2, 7. Little Frauds, 8. Big Frauds, and 9. Collateral Consequences.Positives:1. Engaging, well-written, well-researched book that is accessible to the masses.2. Even handed, equal-opportunity critique. Taibbi has his style of writing that consists of passion, sharp tone, and very descriptive. His interviewees take center stage and help him tell a compelling story of social injustice.3. An excellent and an important topic, inequality and how it is manifested. “We still have real jury trials, honest judges, and free elections, all the superficial characteristics of a functional, free democracy. But underneath that surface is a florid and malevolent bureaucracy that mostly (not absolutely, but mostly) keeps the rich and the poor separate through thousands of tiny, scarcely visible inequities.”4. This book is about inequality shown through a series of real-life examples. Taibbi removes the fog and shows what is really happening. “We’re creating a dystopia, where the mania of the state isn’t secrecy or censorship but unfairness. Obsessed with success and wealth and despising failure and poverty, our society is systematically dividing the population into winners and losers, using institutions like the courts to speed the process. Winners get rich and get off. Losers go broke and go to jail. It isn’t just that some clever crook on Wall Street can steal a billion dollars and never see the inside of a courtroom; it’s that, plus the fact that some black teenager a few miles away can go to jail just for standing on a street corner, that makes the whole picture complete.”5. The consequences of legislation. “Moreover, even within the United States there had been intentional, lobbied-for changes in corporate structure: the repeal of the Glass-Steagall Act, which had prevented the mergers of commercial banks, investment banks, and insurance companies (this repeal led to the creation of megafirms like Citigroup), and Supreme Court decisions rolling back bans on interstate banking (which led to a string of mergers, resulting in the formation of giant national banks like Wachovia and Bank of America). In the finance sector at least, these changes allowed companies to be more enormous and difficult to regulate than they ever had been before.”6. Doesn’t mince words about financial fraud. “Specifically, this was a massive criminal fraud scheme, something akin to a giant counterfeiting operation, in which banks mass-produced extremely risky, low-quality subprime mortgages and with lightning-quick efficiency sold them off to institutional sucker-investors as highly rated AAA bonds. The hot potato game targeted unions, pension funds, and government-backed mortgage companies like Fannie Mae on the secondary market.”7. A look at the infuriating stop-and-frisk abuse. “In 2011, the year before Tory got arrested, another year when exactly nobody on Wall Street was arrested for crimes connected to the financial crisis, New York City police stopped and searched a record 684,724 people. Out of those, 88 percent were black or Hispanic.”8. An interesting and troubling look at the legal system in practice and how it applies to the poor. “Prosecutors won’t say so openly, but privately, they will admit that when their cases are weak, they drive their cases through this Lincoln Tunnel of a procedural loophole, dragging things out as long as possible to force a plea. It usually works.”9. How the legal system applies to banks. “Big banks get caught committing crimes, at worst they pay a big fine. Instead of going to jail, a check gets written, and it comes out of the pockets of shareholders, not the individuals responsible.”10. Taibbi makes a compelling argument that the most outrageous and damning behaviors are conducted in such a way that it’s too complex to define. “The real issue wasn’t legal or illegal? But seen or unseen? While some of the most dangerous behaviors in American big business were indeed against the law, they were often, more importantly, outside the law, executed in an undefined legal space, in darkness.” “You can’t police what you can’t see, and you can’t see in the dark.”11. One of the best examples of outrageous, irresponsible behaviors of banks is illustrated through the Lehman story. “The creditors were thrust face-first into the immovable principle that underlies everything modern that Wall Street does: if a crime is complicated enough, and sanctified by enough “reputable” attorneys and accountants, then American law enforcement will inevitably be too slow or too weak to stop it.”12. The compelling argument for a permanent oligarchical bailout state. “The deals the government and Wall Street worked out that weekend to save the likes of AIG, Goldman, Deutsche Bank, Morgan Stanley, and Merrill Lynch were unprecedented in their reach and political consequence, transforming America into a permanent oligarchical bailout state. This was, essentially, a formal merger of Wall Street and the U.S. government.”13. A look at immigration. “(Gainesville) This small Georgia city is ground zero for enforcement of a ferocious federal immigration rule called 287(g) that essentially deputizes any and all state and local law enforcement officials to arrest undocumented aliens on behalf of the U.S. Immigration and Customs Enforcement agency (ICE).” “So the undocumented alien who kills a room full of Rotarians with an ax has a right to counsel, a phone call, and protection against improper searches. The alien caught crossing the street on his way to work has no rights at all.”14. A look at the corrections industry. “The jailing-Hispanics business is the perfect mix of politics and profit. Companies like CCA donate generously to politicians everywhere, particularly at the state level. The firm has spent as much as $3.4 million lobbying in a single year and on average spends between $1 million and $2 million a year. Its lobbyists are everywhere, and in every major anti-immigrant bill, you can usually find a current or former CCA lobbyist lurking in the weeds somewhere. Arizona governor Jan Brewer, for instance, had two ex–CCA lobbyists on her staff helping write the legislation when she pushed through her notorious 1070 law, which essentially legalized racial profiling in the cause of catching illegal immigrants.”15. One of the most disturbing tales in the annals of Wall Street, the Fairfax story. “The Fairfax fiasco is a tale of harassment on a grand scale, in which the cream of America’s corporate culture followed executives, burgled information from private bank accounts, researched the Canadians’ sexual preferences for blackmail purposes, broke into hotel rooms and left threatening messages, prank-called a cancer-stricken woman in the middle of the night, and even harassed the pastor of the staid Anglican church where the Canadian CEO worshipped on Sundays.”16. Startling facts. “There are no real regulatory audits of hedge funds, and no government body checks hedge funds’ trades or verifies their claims. It even came out, in the famous Bernie Madoff case, that despite numerous complaints to the SEC over the years from reputable sources, nobody in the government even checked to make sure Madoff’s hedge fund even made trades at all. Madoff actually went more than thirteen years without making a single stock purchase and yet somehow survived several SEC investigations—that’s how flimsy government regulation of hedge funds has been and still is.”17. A look at programs such as Project 100% (P100) that investigated welfare fraud cases. “P100 generates, by the thousand, stories that sound like testimonials culled from refugees of some distant, low-rent, third-world despotate. The stories are terrible, humiliating, abusive.” “So the standard is, anyone who receives aid from taxpayers forgoes his rights, because the state has a “strong interest” in rooting out fraud.” “Twenty-six billion dollars of fraud: no felony cases. But when the stakes are in the hundreds of dollars, we kick in 26,000 doors a year, in just one county.”18. Case involving GOP candidate John Kasich. “For instance, in 2011, the state of Ohio—the same state that lost tens of millions in the early 2000s when its pension fund bought severely overpriced mortgage-backed securities from a Lehman Brothers banker named John Kasich, who would later become governor—tried to recoup some of its losses by sending out 22,000 notices to Ohioans seeking “overpayments” in either welfare or food stamps.”19. The whistleblower case of Linda Almonte. “In Riverside, California, you get a hundred bucks and a thank-you for bringing a fraud case to light. When you scratch the same civic itch at JPMorgan Chase, you lose everything you own and end up living the life of a financial fugitive. Linda and her kids, when I met them, seemed like a family on the run.”20. Unequal justice. “The problem is, if the law is applied unequally enough over a long enough period of time, at some point, law enforcement becomes politically illegitimate. Whole classes of arrests become (circle one) illegal, improper, morally unenforceable.”Negatives:1. At over 400 pages it requires a commitment of your time.2. Some of Taibbi’s outrage may be overblown. “The attorney general of the United States had just admitted, in front of a room full of reporters, that he asks Wall Street for advice before he prosecutes Wall Street.” Is that really deserving of outrage? I consider it research, which by the way is what Taibbi does so well for his own books.3. Taibbi does a fantastic job of describing the problems but no much delving into potential solutions. I would have added a chapter on solutions by the subject matter experts.4. No formal bibliography and no notes.5. Very few charts and visual material to complement the narrative.6. It’s a very good book to help you understand through stories what’s at the heart of the divide, however, it’s not as good as a quick reference.In summary, this is a very good book on social injustice, inequality. Through a series of stories Taibbi illustrates clearly what’s at the heart of our social divide. It’s infuriating to see how this divide takes place in America; the rich get away with crimes that have far bigger ramifications on our society and in doing so causes the law in many respects to lose its legitimacy. My biggest complaint about the book is the lack of references and supplementary material. A very interesting read, I recommend it!Further suggestions: “Inequality” by Anthony B. Atkinson, “The Economics of Inequality” by Thomas Piketty, “The Great Divide” by Joseph Stiglitz, “Winner-Take All Politics” by Jacob S. Hacker, “The Great Escape” by Angus Deaton, “Screwed the Undeclared War Against the Middle Class” by Thom Hartmann, “The Monster: How a Gang of Predatory Lenders and Wall Street Bankers Fleeced America…” by Michael W. Hudson, “Perfectly Legal…” by David Cay Johnston, “The Looting of America” by Les Leopold and “The Great American Stickup” by Robert Scheer.
⭐Following-up on `The Great Derangement’ and `Griftopia’, Matt Taibbi in `The Divide’ examines the processes which have led to the development of a two-tier criminal justice system in the USA. George Orwell’s proclamation (by the pigs) in `Animal Farm’ sums it up: “All animals are equal, but some are more equal than others.” Taibbi’s essay focuses on two groups of people at opposite ends of the social spectrum: at one end the poor and disadvantaged, routinely harassed and arrested, put through the meat grinder of the justice system, sent to jail and given criminal records for the most trivial infractions; at the other the rich – especially the super-rich Wall Street class of financiers – effectively exempt from prosecution regardless of the enormity of criminal fraud, embezzlement and theft. Taibbi shows us that not only do most people now unconsciously acknowledge this divide as de facto, but we’ve come to subliminally agree that some people are just more entitled to civil rights than others (i.e. in Orwellian-speak some are “more equal”), depending on their wealth, status and position in society.Taibbi’s thesis demonstrates that those guilty of `white-collar crime’ whose resources can finance armies of highly-paid lawyers are basically too much trouble to indict, that a successful prosecution is a task beyond the energies of all but the most determined prosecutor due to the complexity and arcane detail of the evidence. More often the Wall Street firm admits to `mistakes’ and pays a wad of cash into the Federal budget as a fine, admitting no wrongdoing: the fine doesn’t dent the firm’s profits much, the Government gets US$ millions/billions into its coffers; an expensive protracted court case with a less-than-evens prospect of success is avoided and the perpetrators go scot free to commit the same felony again. It looks like everybody wins but in the long run, everybody loses as society becomes more unequal, more divided along the lines of class and wealth. If you’ve ever been puzzled/outraged as to why none of those who virtually bankrupted the global economy in 2008 have ever faced justice, let alone seen the inside of a jail cell, Taibbi demonstrates exactly how and why this has happened in astounding detail.Juxtaposed with tales of Wall Street financiers effectively immune from prosecution, Taibbi journeys to Bedford-Stuyvesant in Brooklyn and to the stifling and miserable NYC courts to document how the poor and disadvantaged are treated by the criminal justice system, and the zealous big-fishing-net approach of the NYPD: scoop up enough people off the streets and you can be confident of finding a small percentage to indict for some infraction, it’s just the law of averages. He also spends time with Latino and Vietnamese immigrants working low-paid jobs in a chicken factory-town in Georgia, and shows us the desperate conditions endured by welfare claimants in California (many poor immigrant single mothers) who wait in line all day to be assessed for welfare and can at any time be subject to intrusive domestic search by Gestapo-like officials, or be prosecuted and jailed for unintentionally defrauding the state even where the fault clearly lies with administrators, not with the claimant.Most of these people at the lower end of society are invisible to the wealthy, who have no contact with and little knowledge of their daily struggles for survival.It’s important to emphasise that Taibbi doesn’t advocate that genuine criminal activity or welfare fraud at the low end of society should be excused; he’s a champion of equal justice for all and merely shows us that the playing field is not level, that the deck is stacked in your favour if you’re rich. It’s always been that way (to some degree) in all human societies for time out of mind, but Taibbi argues persuasively that we’re now in a new phase where systemic injustice is being institutionalised, and we’re in danger of accepting this is Just The Way Things Are And Ought To Be.Matt Taibbi has matured into a perceptive and intelligent writer and is becoming one of the most important social commentators on the US political scene. He’s moreover a hardworking investigator of the old fashioned kind, guiding the reader through complex, arcane pieces of legislation and case histories with great thoroughness which a less diligent journalist might shortcut or avoid (for example, the 54-pages of Chapter 4 contain the most complete, insightful and forensically detailed analysis of the collapse of the Lehman Brothers investment bank you’ll ever read – laced with biting humour). He spends days sitting in the public galleries of municipal court rooms, countless hours poring over the minutiae of legal verdicts; looks up obscure congressional memos, visits the oppressed underclass in their pitiful housing projects or in jail, exposes the reality of what it’s like at the rough end of the system. Moreover he delivers his essay in a lively and entertaining writing style, engaging the reader with humour, irony and poignancy. He is that rare commodity in the 21st century: a courageous and original campaigner for societal change possessed of an impassioned sense of fairness and natural justice.
⭐but I couldn’t stop reading it. I think we’re in big trouble…I like Taibbi’s writing. He makes clear issues that might well bewilder the layman on the street about issues that we really should all be aware about. I recommend this highly and am looking forward to reading some of his other stuff I’ve bought. Best to incorporate some light fiction in between each of his books so as not to become despondent and give up hope and I mean that in a good way though.
⭐Stunning read. Well written, brilliantly argued and impossible to put down. My mouth was hanging open at some point as the sheer audacity of the American system became clear. Shocking as well. A must purchase. I can’t recommend this enough.
⭐A superb book – brilliantly explains and lays bare the disparities in New York’s justice system. Scathing, eloquent, and detailed, this is a must-read.
⭐Matt Taibbi, brilliant as always.
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