Friday, November 26, 2010

Review: Griftopia, by Matt Taibbi

I can't believe it. It's even worse than I thought.

In Griftopia, Matt Taibbi takes us through the series of financial disasters of the last decade, presenting them to us as a succession of long cons on the American consuming public, enabled by the government and perpetrated by the finance industry. He bookends the drama by a bit of political analysis, pointing out some basic and comic misunderstandings of the "Tea Party" demonstrators with a dollop of sympathy. They're right that the government is crapping on them. They just don't understand how it works, or who wins. (Writing this now with a family-time turkey hangover, and I'm appreciating Matt's point more than when I read it last week.) He tells us how it's intentionally complex, to obscure what the hell is going on, buried in miles of double negatives and lawyerly fine print, mostly as a justification for separating the rubes from their bucks. In the epilogue he notes how the political campaigns have sifted it down into idiotic narratives that ignore the essential conflict. In between, Matt offers the quasi-philosophical excuses for graft that began to seep up in the Reagan years, walks us through the tech bubble, the recent commodities spike, skims across the health insurance morrass, and spends a good couple chapters on the current real estate mess and its corrolary finance disasters, each given as a different view of the whole enterprise too structural to call a scam, each a different tentacle of some gigantic insensate octopus (his imagery), not much aware of the activities of the rest of it. At least one of the chapters is a reprise of one of his big Rolling Stone pieces, but the format is logical enough.

Most of the criticisms I've seen Matt Taibbi receive from his articles have boiled down to attacks on his style, or hurt feelings. (The multitrillion net grift that he tosses up once or twice is something I've seen disputed, but he's obviously including some lending actions of the federal reserve that's not well-disclosed, and is necessarily estimated, and is used in the text as a synonym for "huge" I think with the appropriate amount of confidence.) Me, I like the colorful language so much (evidence: this-here blog, although both us might go a little heavy on the adjectives) that I worry that it probably soften up my objectivity, although I can see how for normal people, frequent superlative use of words like "collossal" and "insane" and "fuck-ton" may be mistaken for an absence of mathematical precision, and how calling Alan Greenspan "the biggest asshole in the universe" or Rick Santelli a "shameless douchewad" or Lloyd Blankfein a "motherfucker" may worry semantic purists that Matt could be offering a smidgen too much of a personal hit. But keep in mind that attacking the man doesn't necessary mean it's an ad hominem fallacy. Matt's not calling them names in order to discredit their argument. For that, he's offering a couple hundred pages of evidence. What Taibbi is instead doing is examining their behavior and reporting the logical conclusion that they are, according to any useful colloquial understanding, major-league assholes. Sure it's an opinion, but it's supported. And it's a good antidote for the beetle-browed driness, jargon-heavy passion, or Delphic gobbldegook that is the usually accepted tone for the financial discussion, at least when it is directed toward the public. The admonition against strong words can serve as a cover for behavior that is outrageous enough to be worthy of them. Taibbi's technique of generating an emotional connection is useful. And it's worth noting that some the basic humanity in the big-time profit-seeking calculus is so deeply ignored. Call it an incredulous style, but I would likewise avoid calling it a fallacious appeal to incredulity. It's more like a comic act of frantically trying to point out something too large and obvious to easily notice. ("The fucking elephant! Don't you see?") And yeah, even if you want to argue (and I don't really) that Taibbi's a one-eyed journalist, it still puts him among the sparse royalty of that profession. He's not a comedian, but fuck it, he's funny, and the emotional connection he generates is of that vein, the sort that can help you accept uncomfortable little truths.

My objections to Griftopia are small, and run in the territory of praising the book with faint damns. I appreciate the research Taibbi did here, and his willingness to explain and condense things for his readers is bloody useful. But on the other hand, I'm wary of entertaining explanations of boring subjects. My spider-sense occasionally got tingling, got me thinking it's little too like an "edgy" kids' science show or something (a certain glibness that sometimes generates allergy symptoms, even if I don't generally find them to be wrong), and maybe he's missing important subtleties in the service of a greater valid point. The issue is that the grift penetrates deeper into some economic sectors than others, and even there, on some firms and practices more than others. I don't think this is lost exactly, but the chapters are given approximately equal emphasis, and I don't think all of them have purely economic causes, or were generated with the same level of gleeful amorality or outright contempt toward the lower classes.

For example, like most people, I suspected that speculation played a role in the 2008commodities bubble, but how much of a role? Now, I didn't realize how much was of the disruptive speculation was of a newly legal type, and Matt makes a good case explaining what useful service commoditiy futures have provided since the Depression, and for the role the empowered commodity futures trading commission made in creating a structure so damn fragile and ripe for collapse. It explains why some worries about regional stability made the futures market go so much more flighty and generally fucktarded (not to be so casual about this--it made people go hungry, a worse thing than losing your house) than investors normally make things. But dude, there are very good reasons why "anyone would want to invest in a rise in commodoties prices over time". I don't think in the long term that we can really count on technologies to continually improve yields and so forth, not without a brand new energy source and a revolutionary chemicals infrastructure. The market scare that sparked it--middle east instability sparked by U.S. military actions there--were real, and if there was still any of the shit in Texas, wouldn't have been an issue in the first place. It's a response to oil peaking (and I'd love to see Matt Taibbi on oil, by the way). The spike was caused by the futures overinvestment, but I think it's still governed by gradual resource depletion. I think the inappropriateness of long futures in normally-functioning commodities markets makes sense. Would it be good to be able to short oil on some long-term scale?

There is a later chapter on last year's health care reform, and Taibbi makes the case that, like other corporate actors, Washington sees insurers as among their real constituents, who need to be served more than they need to be legislated against on behalf of us lowly worker bees. He is certainly right to trash the anti-trust exemption enjoyed by the health insurance market, which flies against the public interest, and is, you know, completely inconsistent with the sorts of pluralist models that most people believe apply to our country and economy. It still takes amazing balls to ignore medical or insurance that work cheaply, and after basing parts of your campaign on spelling them out, to then take 'em right off the table before negotiations even start. Matt acknowledges that it's well-impossible to buck the insurers when you're a senator, for those even inclined to, but didn't any politician imagine an ounce of good could be done, that chink in the armor was useful as a price to give 'em something they'd get anyway? Aren't some of them merely misguided compromisers instead of pure sellouts? Isn't it good that at least some people are insured and we have a medical complex that works even if its finances amount to extortion? I am Taibbi's side here, but he offers evidence more than proof. Failing to rescind something evil is perfectly consistent with cluelessness or a broken system, but isn't actively malicious in the way that a financial con can be. And when they get that far in the book, Matt's going to make the commenters at Balloon Juice hate him all over again.

When it gets to auctioning public utilities for short-term budget-balancing, I was similarly educated on the extent of it all, although I'm not sure if I've been convinced that foreign wealth funds are any specific problem here. Makes it seem more like "looting" than anything else. But Matt's at his best going over the stuff he researched so heavily for the Rolling Stone pieces. If the grift is merely good for commodities and health care markets, it's been grrrreat! for the investment banks, who, at the top eschelons, have not failed to garner their cut, even as pensions tank and our governors eye our federal benefits to fight the deficits they suddenly care about. I've read a fair amount about this (much like any reluctantly responsible citizen), and I liked how he added some depth and, really, some perspective to the mortgage racket as it all went down. There are so many details of this game, that it's difficult to organize and prioritize, and I thought as a summary of the chain of fraud it was splendid, and the wrapup (p. 121) was artful. I liked his quip that it's Griftopia for the handful powerful entities working in the priveleged sphere where they can manipulate the economy, while it's the free market for the rest of us. Which is the exact opposite of the message they sell.

[Wrapped this one up in a hurry. Happy holidays, everyone.]


Ben There said...

Enjoyed this review Keifus. I'm a fan of Taibbi but have been contemplating whether or not to read his latest offering. The only reason I've hesitated is that I feel like I've read so much on this topic that it would be very hard to learn anything new at this point. However, reading your review reminds me that whether or not I'm already aware of the facts, Taibbi's style is one of the main things that makes him so much fun to read. How can one not love the introduction of terms like "fuck-ton" and "motherfucker" into a discussion about banking and finance?

(Still don't know if I'm going to read the damn book, but thanks for the review!) might check out a book "Who Rules America?" (latest edition). That's the one I'm leaning towards next. The website is certainly interesting.

Keifus said...

Hey, I actually read that one!

Got a little wordy but, but I thought Domhoff made a good case. He has good supplementary material online, that should have been printed as appendices, but I guess that's how they do textbooks these days.

Taibbi covers similar ground as in his articles but I thought it went down pretty easy.

Ben There said...

Ha! You've already read it...How about that?

Let me try again on a recommendation...."Freefall" by Joseph Stiglitz. Well worth it. He doesn't call anyone a douche-wad but I don't hold it against him.

Keifus said...

I've been recommended to read JK Galbraith (in particular, the Great Crash) in a similar vein, with the advice that he also writes very well (althugh I don't imagine he says douchewad a lot either). Needless to say, I still haven't gotten around to it.

Ben There said...

I enjoyed "The Predator State" by Galbraith. It's been awhile but it seems like it was pretty informative and interesting.