Matt Taibbi's The Divide: American Injustice in the Age of the Wealth Gap is a scorching, brilliant, incandescent indictment of the widening gap in how American justice treats the rich and the poor. Taibbi's spectacular financial reporting for Rolling Stone set him out as the best running commentator on the financial crisis and its crimes, and The Divide -- beautifully illustrated by Molly Crabapple -- shows that at full length, he's even better.
(All illustrations courtesy of Molly Crabapple)
"We've put society on bureaucratic autopilot... a steel trap for losers and a greased pipeline to money, power and impunity for the winners."
Taibbi's core hypothesis is that, just like the widening wealth-gap, America has a terrible problem with a widening justice gap. Since the Clinton years, the American state has treated poverty as a crime, turning the receipt of state aid into a basis for the most invasive intrusions into your personal life, for a never-ending round of barked accusations and cruel threats to your freedom, your family, and your future. Meanwhile, Eric Holder's "Collateral Consequences" doctrine -- conceived under Clinton, revised under GWB, and perfected under Obama -- tells federal prosecutors to punish big companies carefully, even for the worst crimes imaginable, in order to protect the innocents who work for those companies and rely on them.
The net effect is a society where HSBC can be found guilty of laundering billions for brutal Mexican drug-cartels who torture and murder with impunity, pay a fine equal to a few weeks' profit, and partially defer bonuses for a few of its executives. But on the same day, across America, poor and mostly brown people are locked into inhumane prisons for selling a joint or two of the weed those cartels control.
"The two approaches to justice may individually make a kind of sense, but side by side they're a dystopia, where common courts become factories for turning poor people into prisoners, while federal prosecutors turn into overpriced garbage-men, who behind closed doors quietly dispose of the sins of the rich for a fee."
The key to the financialization of criminal impunity is that it is profoundly boring. Understanding how Barclays stole at least -- at least -- five billion dollars from the pension funds, small towns and individuals who were owed money by Lehman Brothers requires that you get ahold of a myriad of spectacularly dull esoteric financial concepts and long-winded legal wheezes. The actual smoking gun is a paragraph of legalese so stultifying it should come with a Surgeon General's warning and a tissue to soak up the cerebrospinal fluid that leaks out of the ears of anyone who tries to actually read it.
But Taibbi is a fantastic storyteller, and has a gift for making the technical material accessible. His key is to alternate between different kinds of explanation: whodunnit-style recounting of breathtaking financial crimes, personal profiles of sociopathic crooks, and informed speculation about the mentality and calculus that has sapped the spine of America's prosecutors and law enforcement officers.
"Because it's fueled by the irrepressibly rising vapor of our darkest hidden values, it attacks people without money, particularly nonwhite people, with a weirdly venomous kind of hatred, treating them like they're already guilty of something, which of course they are -- namely, being that which we're all afraid of becoming."
Of course, official corruption and impunity for the rich is only half the story. The other half is the increasingly vicious war on the poor. Taibbi's recounting of the unspeakable corruption of stop-and-frisk and other quota-driven, dragnet policing mechanisms have the power of classics like Upton Sinclair's 1906 The Jungle, but unlike Sinclair, Taibbi is telling the true stories of living people.
These are people who are routinely stopped, beaten, humiliated, jailed, and cleaned out by a system that can always find something that you're guilty of. Sometimes, it's the undocumented workers who hide in the shadows as small-town cops bust them for driving without a license, charge them $1000 (while citizens charged with the same offense pay nothing, so long as they promptly get the missing license), and then rip them from their families and deport them to Mexico, where many are kidnapped and tortured my members of drug cartels who understand that deportees have US relatives with cash.
Other times, it's people who commit the crime of being brown and/or poor while walking. In the NYC projects, you can be charged with obstructing pedestrian traffic for stopping in front of your own building at 1AM after a shift at work, resting briefly on an empty street after walking the dog. And your public defender will refuse to enter a plea of not guilty, and the judge will not understand why you want such a thing, and if, by some miracle, the cop who arrested you, beat you up, and jailed you admits that he falsified your arrest, you're let go -- and so is he.
"Increasingly, the people who make decisions about justice and punishment in this country see a meaningful difference between crime and merely breaking the law."
Here, too, Taibbi looks for the systemic causes of these attitudes, a familiar and depressing blend of political expedience (Clinton wooing disaffected Dixiecrats by promising to get tough on welfare fraud, no matter what the human or financial cost), regulatory corruption (private prisons beget lobbying for rules to put people in private prisons, and the poor and nonwhite are the easiest people to put in prison without much fuss), and the financial vacuum left behind by the supernova-scale frauds of the too-big-to-fail banks (your bankrupt town can treat terrorized undocumented migrants as ATMs, hitting them up for giant fines for offenses that the lucky documented among us walk away from, Scot-free).
The Divide is a book that is more enraging than depressing. Part of that is down to Taibbi's facility with language and plot, but it's also a function of his brilliant structural trick of rotating between the stories of the afflicted and the comfortable, details of the technical mechanisms of their respective plights, and cutting analysis of the system that created the mess.
"[The government] has never put together a task force to concentrate on corruption... The Financial Crisis Inquiry Committee was given a budget of $9.8m, 'roughly one-seventh of the budget for Oliver Stone's Wall Street: Money Never Sleeps.' ...The increase in the national drug enforcement budget for the year of the biggest financial crisis since the Depression was roughly 200 times the size of the sole executive branch effort at formally investigating the causes of financial corruption."
In some ways, Taibbi's worst villains are not the financial criminals, but the captured, conflicted milquetoaste prosecutors who let them get away with crimes again and again, using fines instead of jail time, effectively imposing a modest tax on crime that isn't a deterrent -- it's just a line-item on the budget.
The argument, which originated with Holder, is that banks that are too big to fail are too big to jail. If you brought the full force of the law to bear against the criminals who steal billions and abet the most heinous crimes, rapes, tortures, and murders imaginable, their institutions will fail and everyone who depends on them -- thousands of innocents, and possibly the whole global economy -- will suffer. The prosecutors argue that their "leverage" is best used to extract billions in fines (from companies that are often sitting on hundreds of billions in government handouts and contracts) is a better outcome for "society" than putting a couple of fat-cats in jail.
But Taibbi demolishes this argument. The billions in fines are hardly matched by the hundreds of billions in harm the companies do -- over and over and over. And if the state has leverage over a company that is too big to jail, then let them use that leverage to break up the company so that the next time it commits a crime, the entire C-suite can be thrown in the Hole and the key tossed out.
"As the...wealth divide gets bigger, it becomes less and less possible for law enforcement to imagine the jail-or-garbage option for [bankers from top firms] and more and more possible to imagine it for an ever-expanding population of Everyone Else."
Because, Taibbi argues, there's another systemic risk to allowing this corruption to run unchecked: it rots us. If two people who commit the same crime always face wildly different punishments based on how rich they are, there is no justice in the justice system. A cherished and fundamental value of democratic societies -- of the rule of law -- is eroded.
When the rich can't be arrested, it seems, the poor are arrested in their stead, and the pool of people who are eligible for a stop-and-frisk, for an unexpected descent into poverty and food stamps and a regime of surveillance that beggars the imagination in its petty cruelty, only grows. It might be you. It might be me. It certainly is more than a few ex-bankers, who were foolish enough to blow the whistle on their bosses' crimes and ended up broken and impoverished for their trouble.
"Makes small piles of money smaller and big piles of money bigger"
The justice gap isn't a phenomenon separate from the wealth gap: it is both a part of it and an accelerant for it. If you are poor and arrested, the associated fees -- paying for your own DNA sampling, for example -- will sink you into deeper poverty. If you are rich and you make yourself richer with crime, you will get richer still when the government decides that your newly swollen financial institution is the only thing big enough to handle the next round of bond issues, and you wax fatter still.
Taibbi's book is a must-read. It's the kind of thing that starts movements. Don't take my word for it -- read it yourself.
Published 5:03 am Mon, Jun 2, 2014
books, Business, crime, finance, gift guide, gini, justice, occupy, one percent, ows, Reviews, wealth gap