From Ferguson to Finance: Understanding America via Matt Taibbi’s ‘The Divide’ (2014)

Matt Taibbi invites readers to compare how US law enforcement selectively enforces the law based on class and race
Matt Taibbi shot to fame in 2009 as Rolling Stone’s white-collar crime correspondent. Documenting Goldman Sachs’s role in the 2008 sub-prime mortgage scam, Taibbi dubbed the bank “a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.”

The line, though attention-seizing, is really just a more elaborate version of the rambunctious and colloquial style Taibbi maintains even while writing about Wall St.’s complex and deliberately obscure schemes. Along with the producers of the documentary Inside Job, narrated by Matt Damon, Taibbi is a big part of the reason that the punters outside the finance industry actually get anything about the 2008 crisis, between the securitization, collateralized debt obligations, and credit default swaps.
Just to recap, banks and mortgage lenders “used a technique called securitization,” as Taibbi writes in The Divide, “that allowed [them] to take vast pools of home loans belonging to underemployed janitors and immigrants and magically convert them into investments that were ostensibly as safe as Microsoft corporate bonds or the sovereign debt of Luxembourg, but more lucrative than either.” They then “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.”
We are not talking about economic crisis as natural disaster here. We are talking about systematic fraud.
But this time around, Taibbi isn’t all about the sub-prime mortgage swindle. The Divide is fully updated from Taibbi’s previous full-length work Griftopia (2010). We go inside HSBC’s drug-money laundering, the multi-trillion-dollar LIBOR affair, Barclay’s $5 billion heist pulled on the dying Lehman Brothers, and JPMorgan Chase’s hundred-million-dollar business of fraudulent judgements against “defaulting” credit card holders.
All along the way, Taibbi makes this didactic ride more enjoyable by mixing heavy-duty denunciation with hilarious behind-the-scenes insights into Wall St., including the following choice selection:
  • Bank of America actually named their mortgage loan program “Hustle.”
  • Lehman Brothers’ accountants derided their own bank’s assets as “goat poo.”
  • A ratings agencies was busted saying, “Lord help our fucking scam!”
  • A share price analyst wrote that “ratings and price targets are fairly meaningless anyway. But yes, the ‘little guy’ who isn’t smart about the nuances may get misled, such is the nature of my business.”
  • A hedge fund described their short-selling target as “just about rapped up like a skandinavian [sic] mistress love slave,” and later joked, “Bend over the hedge funds have something special for you.” This was the same fund, incidentally, that purchased Damien Hirst’s infamous $12 million pickled-shark artwork.
The thing is, it’s now five years since the Vampire Squid was first outed. Surely the fact that investment banks such as Goldman, HSBC, Macquarie, and Citigroup are full of liars and scoundrels is already imprinted on the collective unconscious?
So in The Divide, Taibbi brings to this story exactly what it needed. Those people with enough free time and education to fathom the chronic criminality of the global financial system are rarely close enough to the very bottom of the social pyramid to know what it feels like to actually live there. The Divide brings Ferguson and Goldman Sachs side-by-side, painting a stark portrait of an American dystopia.
“Keep stressing morals and personal decisions,
Tell me what’s moral about these conditions?”
— Brother Ali, ‘Only Life I Know’
As Jesse Jackson commented, “[t]here is a Ferguson in every metropolitan area of America.” Taibbi takes readers on a short walk from Wall St. to the black-and-Latino ghettos of New York and gets talking to the locals about how often they’ve been stopped, searched, and written a court summons.
“How often?” says Tyquan Brehon from Brooklyn. “I’d say about 60 times before I turned 19.”
If that reads as an exaggeration, consider these stats on what Professor Harry Levine of the City University of New York calls “sub-misdemeanour policing.” In 2012 in New York City, 50,000 people were arrested for marijuana possession (a non-felony offense). As a comparison with the pre-zero tolerance era, marijuana arrests in New York City averaged 3,000 per year in the 1990s.
Also in 2012, 80,000 people were arrested for disorderly conduct. Twenty-thousand were written up for riding a bicycle on the sidewalk and 140,000 people were written up for open-container alcohol violations. Tens of thousands were arrested for loitering.
These misdemeanour arrests are part of what is called the “quality of life” crime-fighting initiative. One study, cited in The Divide, shows black and Latino people made up 91 percent of all “quality of life” arrests in New York City. A Brooklyn court review found that only 4 percent of open-container alcohol summonses were issued to white people, though they make up roughly one-third of the population.[1] White people, who make up 43 percent of the population of New York City, make up only 11 percent of the searches in the “stop-and-frisk” program.
In short, Americans can be arrested for pretty much anything, but it’s the poor and/or black who actually are.
Andrew Brown of Bed-Stuy in Brooklyn is the centrepiece of Chapter 3 of The Divide. Andrew has been issued multiple court summonses for “obstructing pedestrian traffic,” including once while standing outside his own apartment building at 1 am after work. Our friend Tyquan was issued a loitering summons that read, “Deponent observed the defendant at the above-listed location, to wit the entrance of a McDonald’s, and observed the defendant opening the door for a number of individuals.”
We even learn of arrests for occupying two seats on the subway and for fare evasion. One precinct routinely issued tickets to homeless people catching a bus to a shelter, tickets which actually meant they were disqualified from the shelters and other housing assistance!
Then there are the women taken in for “loitering for the purposes of engaging in a prostitution offense,” in which the police evidence will be “engaging in conversation” with a man on the street, or “making eye contact” with drivers.
It’s worth acknowledging that there’s an element of Taibbi’s work here that is pure Columbusing (discovering something for white people). When reading stories like this Andrew Brown’s, or hearing that the city of Ferguson makes one-quarter of its income in fines, most black Americans don’t have to wonder about how that could be possible.
This doesn’t make the situation any less insane. What sets The Divide apart is the way Taibbi so thoroughly traces the insanity through the “justice” system.
People can and do end up in jail in these cases of sub-misdemeanour policing. “I’ve had judges set bail on fare beats,” a lawyer told Taibbi. “It’s literally shit like this all day long.”
Of the non-felony trials in New York in 2008, more than three-quarters of the defendants were released. But of those who had a bail of $1,000 or less, 87 percent still couldn’t post bail, spending an average of 15 days in jail subsequently, awaiting trial.
“Think about that,” Taibbi writes. “That’s more than 16,500 people a year [in New York City alone] who did an average of two weeks in jail for misdemeanours. If you went to college, were any of those friends of yours? Nobody you knew passed out on a subway car, took X at a club, smoked a joint after work, paid for sex, or drank beer in the street?”
“Or Door 3 you can get on that welfare
But they ain’t trying to help, they’ll put you in hell there.”
— Brother Ali, ‘Only Life I Know’
Taibbi then goes to town on the treatment of the unemployed. Among other absurdities, readers learn that welfare applicants are obliged to stay at home and wait for a visit from inspectors. The inspection time is not given in advance, and if you are out of the house at the time the welfare application will be cancelled. In other words, welfare applicants are literally not allowed to go out looking for work for weeks at a time following their applications!
What’s more, welfare inspectors can and will go through everything a person owns in search of anything that might invalidate a welfare claim. One of the more memorable of the horror stories recounted by Taibbi concerned a newly-arrived Vietnamese immigrant. The unfortunate woman had a pair of her own underwear waved in front of her by an inspector, who interrogated her as to why she would need such a revealing pair if she really wasn’t living with a man.
Taibbi moves on to tell the stories of “Mexican” immigrants, who are threatened with a degree of scrutiny by law enforcement that Wall St. executives never face. The anecdotes Taibbi collects are long, detailed, and deeply personal, at times heart-wrenching. These stories are perhaps the feature that most distinguishes The Divide.
It’s impossible to forget the trials and tribulations faced by Natividad Felix, an immigrant from Sinaloa living in the East L.A. projects. We also get to know Álvaro Fernández, a Colombian immigrant who was deported to Mexico; Anna and Diego, a couple erroneously charged with fraud after applying for welfare when Diego lost his fast food job as Anna was about the give birth to their first child; and Patrick Jewell, whose head was smashed into the Brooklyn pavement by plain-clothed police while we was rolling his own tobacco.
All of these people are subjected to the full force of American law enforcement, all while the perpetrators of the finance industry crimes documented by Taibbi, dozens and dozens of them, walk away without criminal charge.
As Taibbi shows, “If you’re a person of means, you get full service for all ten amendments [The Bill of Rights], and even a few that aren’t listed. But if you owe, if you rent, you get a slightly thinner, more tubercular version of the Fourth Amendment, the First Amendment, the Fifth and Sixth Amendments, and so on.”
By the end of The Divide, America gets the full Vampire-Squid treatment. The “sweepingly complex system of public-private bureaucracies that constitutes our modern politics is just a giant, brainless machine for creating social inequity. It mechanically, automatically, keeps the poor poor, devours money from the middle class, and sends it upwards. And because it’s fuelled by the irrepressibly rising vapor of our darkest hidden values, it attacks people without money, particularly non-white people, with a weirdly venomous kind of hatred.”
“One thing that can’t be debated,
Power never changed on its own, you gotta make it.
The situation of oppressed people
Shows what we feel it means to be a human being.
— Brother Ali, ‘Letter to my Countrymen’
The absence of a conclusion is the one strange characteristic of The Divide. It’s a petty complaint, you might say, but I think it speaks to a greater problem with social criticism, of which Taibbi is now one of the pre-eminent exponents. Namely, where do we go from here?
At the very end of The Divide, Taibbi mentions changes in judicial interpretations brought about by Michelle Alexander’s phenomenal work on racially-biased drug-war policing, The New Jim Crow (2010), as one example of how America might turn a corner. His book is in itself a powerful call to the justice system and federal regulators. Yet as he says himself, since the 2008 crisis we’ve witnessed what is “essentially a merger” between Wall St. and the US government. So how long do we focus on speaking truth to power?
What makes this non-position more striking is his passage on protests against New York City’s stop-and-search policing, which Taibbi describes in an off-hand comment as “the peculiar sort of mental masturbation one sees only from politically left-leaning protestors.” Yet surely this kind of solidarity action with the residents of Brooklyn is a potential solution. How many thousand protestors could be arrested for “obstructing pedestrian traffic” before the judicial system would break entirely?
One thing that is clear after reading The Divide is the absurdity of mainstream press commentary about black hysteria and black paranoia in the wake of Ferguson and the non-indictment of Darren Wilson. Taibbi has documented how it feels to be poor and black in America, “behind enemy lines,” as Dead Prez describes it. It makes one marvel at the dignity shown by the residents of Ferguson and the rest of black America in the face of this constant harassment. One wonders how long that can possibly go on.
Nonetheless, Taibbi shows that investigative journalism is a fundamental part of a healthy society. If you can afford to support these endeavors, please consider becoming a patron of ImportantCool, or donating your twitter account.
[1] From The Divide, p. 132, originally at: http://www.nytimes.com/2012/06/15/nyregion/sniff-test-doesnt-prove-public-drinking-judge-says.html?_r=0
________________________________________________________________________________
Artefacts
Matt Taibbi’s The Divide – What They Said

Comments

comments

christiantym@gmail.com'
Christian is a social anthropologist, who, while working on his honors degree, detailed practices of biopiracy: pharmaceutical firms exploiting the medicinal knowledge of indigenous tribes to claim profitable drug “innovations.” Christian moved to Ecuador in 2013 and spent months at a time among the Shuar indigenous people, the famous “headshrinkers” of Ecuador’s remote southeast, exploring the Shuar’s use of traditional medicine including exploring the Shuar’s use of psychedelics and views on the mind-body connection

Tym is also investigating the political aspects of indigenous organizations, the Shuar being one of the first tribes of the Amazon to federate, and continues to conduct research in this regard in Quito. While in the capital, Tym has become deeply immersed in the political situation. As his access to journalism has increased, Tym has been monitoring the Spanish-speaking South American press and its vociferous treatment of many ruling parties. He has travelled throughout the continent to meet with members of various leftist-indigenous groups.

Leave a Reply