ARTS & FARCES internet

Woodward and Bernstein taught an entire generation of journalists to follow the money to get the story. Too bad so many of our best and brightest put on those particular blinders. There was a much older story at work in the coup d’état that’s currently happening around the globe. Instead of following only the money that was in the right hand, we shouldn’t have fallen for the misdirection and instead followed the power that was in the left hand. So writes Matt Taibbi, writing for Rolling Stone, in the best analysis of the global economic crisis yet to surface. Executing an alarmingly embarrassing attempt at channeling Hunter S. Thompson, Taibbi writes, “So it’s time to admit it: We’re fools, protagonists in a kind of gruesome comedy about the marriage of greed and stupidity. And the worst part about it is that we’re still in denial—we still think this is some kind of unfortunate accident, not something that was created by the group of psychopaths on Wall Street whom we allowed to gang-rape the American Dream.” Grit your teeth and read through the Thompson tropes; it’s worth it.

This has been coming to a well-calculated boil for decades: the frog-boilingly gradual takeover of the US government by a relative handful of insiders who used money—old and new—to purchase elections, peddle influence in the bright, but dusty, corners of the capitol, and loosen the already tenuous regulations that kept the financial greedheads in pseudo-check.

You might think the coup d’état label might be a little hyperbolic, but I assure you it’s not. How else to explain that the same small class of insiders who drove the global economy off the cliff are the same ones to whom we’ve handed the reins for what remains of the wagon train. Look at just whom has been granted virtually unlimited emergency power in the guise of cleaning up the mess they themselves created. Taibbi writes that to understand the global economic collapse we have to understand the high-stakes table-clearing that took place at American International Group (AIG). Taibbi sums it up succinctly: “AIG is what happens when short, bald managers of otherwise boring financial bureaucracies start seeing Brad Pitt in the mirror.” AIG Financial Products head Joseph Cassano was able to place his bets in the open because of the US government’s systematic deregulation of Wall Street. Taibbi reports that from 1998-2008, the financial services industry “spent US$1.7 billion on federal campaign contributions and another US$3.4 billion on lobbyists.” Former US Senator Phil Gramm (R-Texas) led the deregulation charge, but both parties fell over themselves in the frenzy to deregulate the banks.

Step one in the power grab was for the Wall Street elite to create investment instruments from whole cloth that were so complex, so convoluted that ordinary people and federal regulators could never begin to understand them. All the while using lots of money to grease the deregulation wheels in the US government. “In 1997 and 1998, the years leading up to the passage of Phil Gramm’s fateful act that gutted Glass-Steagall, the banking, brokerage and insurance industries spent $350 million on political contributions and lobbying,” Taibbi writes. “Gramm alone—then the chairman of the Senate Banking Committee—collected $2.6 million in only five years. The law pased 90-8 in the Senate….” The result, Taibbi says, is the “US government intervening directly in the economy for the sole purpose of preserving the influence of the megafirms.” Meanwhile, earnest legislators like Bernie Sanders (I-Vermont), mumbling repeatedly about too big to fail means too big to exist and socialized risk and privatized profit are systematically ignored.

The solution is for the US populace to become financially literate, take back our government, and make sure those responsible for this fiasco take their political and financial losses.