Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America
Employing a no-holds-barred style of brutally honest journalism, author Matt Taibbi has successfully attempted to put a frame on what developed during the biggest banking heist in history, all things related before and ex post facto the financial crisis of 2008.Taibbi,”an American author and journalist reporting on politics, media, finance, and sports for Rolling Stone and Men’s Journal “, briefs us with the narrative. “You put all that together–and what you get is a thieves’ paradise–a Griftopia
While the Global Financial Crisis of 2008 isn’t really past but prologue, it was “considered by most economists to be the worst financial crisis since the Great Depression of the 1930′s.”
In summarization, Taibbi expresses that not only do we have a very volatile financial problem on our hands, we have a public that tends to forget about corporate crime overnight. People can’t even remember to tie their shoelaces before walking, much less grasp the essential details of such complexities as the mortgage market.
Basically, Griftopia primarily focuses on what the gurus have labeled the causes of the Great Recession, and the author analyzes the Hot Potato, or The Great American Mortgage Scam. The chapter Hot Potato covers the subprime mortgage crisis, where Taibbi uses real life characters and real life situations to explain normally complicated topics, which entails a series of events and conditions that precedes the financial fallout in 2008. Some have said we never have fully recovered; this is the weakest recovery in history. The worst could be yet to come actually.
The author describes complex relationships from mortgage brokers to investment banks, hidden fees that home buyers were hit with, and a scam that allowed anyone with bad credit to buy a house that he or she would never be able to qualify for under normal circumstances. Mortgage fraud and predatory lending on steroids if you will.
A basic example involves a Mexican immigrant that speaks little English, makes $9 an hour, but yet qualifies for a $615,000 house which takes 96% of his take-home pay! This indeed was a big part of the subprime mortgage problem, but as the author clearly states in his book, the media have portrayed the minorities as culprit, and not victim.
In reality, many home buyers were lied to. Often what was supposed to be fixed loans, turned out to be scams that jacked up their interest rates on mortgages from 110% to as much to 135% or even 140%. Obviously many defaulted, as would be expected.
The so called financial geniuses in the past have come up with a brilliant scheme called mortgage-backed securities and Taibbi educates us how this “speculative gambling” works.
Joseph Cassano is one of the main characters in our plot that includes a set of Mafia-like figures. Cassano was an “officer at AIG Financial Products from the division’s founding in 1987 until his resignation in February 2008.”
Another character we must get familiar with is Win Neuger, “Chief Executive Officer, Chairman, and Director at AIG Global Investment Corp.”
You really have to read the chapter to get all of the details, but what you find are layers of Ponzi schemes used by employees at AIG to rake in billions of dollars illegally, and companies like Goldman Sachs just happened to be the recipients wanting the payback. In the climax of our Hot Potato story, the key credit default swap players are exposed and the American taxpayers become the victims of Bailout Nation. Troubled Asset Relief Program (TARP) becomes a permanent part of the American vernacular. There is no happy ending unfortunately unless you’re a banker that received the bonus. Congratulations if you did.
I think the author initially got his inspiration for the book while traveling on a plane, he had asked other fellow journalists why gas prices were so high. And oddly enough nobody knew. “Doesn’t that make all of us frauds? I mean, if we’re covering this stuff anyway.” The other guy’s response: “You’re just figuring that out now?”
In the chapter Blowout the commodities bubble is thoroughly covered. We all knew that speculation was the problem and we knew that big oil companies were raking in big money, but we never knew exactly how the commodities market worked. Well, if you get the chance to read Griftopia you’ll find out. Again as with the subprime mortgage crisis, it is a series of events and layers of negotiations where financial deregulation creates corruption from the top to the bottom.
For a short, quick answer, Goldman Sachs cut sweetheart deals with legislators, thus propelling themselves into a permanent middleman status, making commodities such as gas and food much higher for no legitimate reason other than pure unadulterated greed. They are literally making money out of thin air and you the consumer are paying dearly for it, while the government falls asleep in the corner of the lobby room. Taxation without representation. Welcome to the new America.
Plain and simple, Goldman Sachs is the problem and the author makes no bones about it. “The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.”
In the McCarran–Ferguson Act, we discover that health insurance companies are exempt from anti-trust laws. The Obamacare Trillion Dollar Band-Aid — is offering giveaways to Big Pharma and Big Insurance. Come and get it. Thanks for the memories.
Taibbi dedicates a chapter to The Biggest (Explicative) in the Universe, former Fed Chair Alan Greenspan. Taibbi claims that Greenspan is one of the key individuals “who made America the dissembling mess that it is today.” We learn that disastrous bubbles are created by central banks. Nothing new about the central bank part but there are some very interesting anecdotes about the bug-eyed Greenspan and his undying love for Ayn Rand’s philosophy.
Biting sarcasm is one of the tools of the trade for a skillful writer, and Matt Taibbi uses this arson in his quiver full of poisonous arrows. He effectively cuts through the fog with his wit and dry humor to nail the slimy Wall Street villains who deserve no mercy. In doing so, Taibbi attracts criticism from other journalists as he pins the culprits and dishes the apologetics a slice of the pie.
“The global economic crisis of 2008 cost tens of millions of people their savings, their jobs, and their homes.” We Americans need to wake up out our dreamlike state and advance our educational skills. The grave state of the nation demands the recovery of our sorry state of amnesia. I strongly recommend Taibbi’s book Griftopia and I also recommend the 2010 documentary film called Inside Job. Alright America. We can do better than this. Honestly.
