Bubble Machines, Vampire Squids, and
the Long Con That Is Breaking America
By Matt Taibbi
Spiegel & Grau; 272pp, $26
There was a time when former Federal Reserve Board Chairman Alan Greenspan—an economist, former jazz musician, and Ayn Rand devotee—was credited with fostering one of the longest economic booms in memory. Recent history, however, hasn't been so kind. According to Matt Taibbi, Greenspan is a mere "gerbilish mirror-gazer who flattered and bulls——-d his way up the Matterhorn of American power and then, once he got to the top, feverishly jacked himself off to the attention of Wall Street for 20 consecutive years." The author who once referred to Goldman Sachs (GS) in Rolling Stone as a "vampire squid wrapped around the face of humanity" has, perhaps unsurprisingly, declared Greenspan "The Biggest A———in the Universe."
Such elegant phraseology is a trademark of Taibbi, who sits at the confluence of two trends sweeping the modern intellectual marketplace: say-whatever-the-hell-you-want-journalism and crisis-as-career-minting upward mobility. One of dozens of journalists and bloggers who scrambled to reinvent themselves as experts on Wall Street just as it became fashionable, Taibbi concedes that before Lehman fell, "Like most Americans, I [didn't] know a damn thing about high finance." In spite of that—or perhaps because of it—he's gathered a cult following. His new book, Griftopia, blames our financial mess on an oligarchy of grifters of all political stripes, from Greenspan and Sarah Palin to Hank Paulson and pretty much every single member of Congress. He doesn't produce any mind-blowing revelations about why the economy is so screwed up—or offer suggestions for how to fix it—but as a channel for unadulterated class rage, Taibbi can be quite effective. If anyone on your holiday list needs to up his or her righteous anger quotient beyond Paul Krugmanesque limits, Griftopia may prove the perfect stocking stuffer.
Few targets, regardless of their political persuasion, escape Taibbi's poisoned darts. Pundit Rick Santelli is "a shameless TV douchewad" credited with jump-starting the Tea Party movement through his February 2009 tantrum on CNBC—itself "a propaganda organ for rapacious Wall Street banks." The mortgage industry is little more than "some sort of pseudo-criminal scam." Commodities speculation is, to Taibbi, "a scam of almost breathtaking beauty," while the health-care reform bill was a "grotesque giveaway" to insurance companies. Taibbi describes Goldman as a company of "criminals" and Washington—the capital of "puke politics"—as a land where elected officials pimp themselves out in exchange for campaign donations.
Taibbi has the right to be angry, and many of his targets are legitimate. With a few exceptions, the perpetrators of the financial crisis have escaped more or less unscathed, while most everyone else is still stumbling along, feeling poor and anxious. The worse things get for average Americans, the better off the top 1 percent—the backbone of the "grifter class"—appears to be; in 2007 they absorbed 23.5 percent of the country's pretax income, according to the Institute for Policy Studies. However, all the bluster and machismo with which this information is delivered can grow wearying. There are only so many uses of the word "balls" a girl can tolerate.
Griftopia is at its best when Taibbi moves away from quoting Futures Industry magazine and fuses his economic apoplexy with his main pre-meltdown area of expertise: politics. In one chapter he details the way the Tea Party and its leaders, such as Palin and Representative Michele Bachmann (R-Minn.), have cynically mixed race politics with class warfare, to devastating effect. Through Palin's folksy, underdog rhetoric, the Partiers have managed to convince large numbers of people that total deregulation and closing down the Federal Reserve are prudent responses to the crisis and recession. "Getting ordinary Americans to emotionally identify...with the political wishes of their bankers and credit-card lenders and mortgagers is no small feat," Taibbi writes. "A loose definition of the Tea Party might be 15 million pissed-off white people sent chasing after Mexicans on Medicaid by the small handful of banks and investment companies who advertise on Fox and CNBC." As in other instances, beneath the hyperbole, Taibbi might have a point.
The Tea Party itself has proven that there is something to be said for unfiltered anger. And Goldman Sachs will be trying to live down its comparison to a cephalopod for a long time. As Chief Executive Officer Lloyd Blankfein observes in a blurb on the back cover of Griftopia: "Oddly enough, the Rolling Stone article tapped into something." That may be particularly bad news for Alan Greenspan. But it's very good news for Matt Taibbi.