Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America
The financial crisis that exploded in 2008 isn’t past but prologue. The stunning rise, fall, and rescue of Wall Street in the bubble-and-bailout era was the coming-out party for the network of looters who sit at the nexus of American political and economic power. The grifter class—made up of the largest players in the financial industry and the politicians who do their bidding—has been growing in power for a generation, transferring wealth upward through increasingly complex financial mechanisms and political maneuvers. The crisis was only one terrifying manifestation of how they’ve hijacked America’s political and economic life.
Rolling Stone’s Matt Taibbi here unravels the whole fiendish story, digging beyond the headlines to get into the deeper roots and wider implications of the rise of the grifters. He traces the movement’s origins to the cult of Ayn Rand and her most influential—and possibly weirdest—acolyte, Alan Greenspan, and offers fresh reporting on the backroom deals that decided the winners and losers in the government bailouts. He uncovers the hidden commodities bubble that transferred billions of dollars to Wall Street while creating food shortages around the world, and he shows how finance dominates politics, from the story of investment bankers auctioning off America’s infrastructure to an inside account of the high-stakes battle for health-care reform—a battle the true reformers lost. Finally, he tells the story of Goldman Sachs, the “vampire squid wrapped around the face of humanity.”
Taibbi has combined deep sources, trailblazing reportage, and provocative analysis to create the most lucid, emotionally galvanizing, and scathingly funny account yet written of the ongoing political and financial crisis in America. This is essential reading for anyone who wants to understand the labyrinthine inner workings of politics and finance in this country, and the profound consequences for us all.
up being a Swiss cheese shot through with preposterous loopholes. The Democrats’ response to Wall Street excess was similar to their attitude toward the Iraq War—they were against it in theory, but in practice, they weren’t going to do much about it. A few weeks after that FCIC hearing, there were a few more punctuation-mark moments in the history of the financial crisis. The aforementioned Dodd-Frank financial reform bill, a fiasco that would do nothing to stop too-big-to-fail companies from
swindler Charles Keating, whose balance sheet Greenspan had examined—he said that Keating’s Lincoln Savings and Loan “has developed a series of carefully planned, highly promising and widely diversified projects” and added that the firm “presents no foreseeable risk to the Federal Savings and Loan Corporation.” The mistake he made in 1994 was even worse. After a few (relatively) small-scale disasters involving derivatives of the sort that would eventually nearly destroy the universe in 2008,
example, that the average duration of a pension fund’s portfolio is designed to match the average employee’s years until retirement. “Which could be twenty years, or more,” says Masters. The other problem with index investing is that it’s “long only.” In the stock market, there are people betting both for and against stocks. But in commodities, nobody invests in prices going down. “Index speculators lean only in one direction—long—and they lean with all their might,” says Masters. Meaning they
Part one of that process involved the bank’s Infrastructure group going on a road tour to ask people with lots of cash to pony up. It was these guys from Morgan’s Infrastructure desk who took their presentation to the Middle East and pitched Chicago’s parking meters to a room full of bankers and analysts in Abu Dhabi, the Abu Dhabi Investment Authority, who ultimately agreed to purchase a large stake. Here’s how they pulled off the paperwork in this deal. It’s really brilliant. At the time the
says Simon Johnson, an economics professor at MIT and former International Monetary Fund official who compared the bailouts to the crony capitalism he had seen in the underdeveloped world. “It became an explicit assumption that the government would always rescue Goldman.” All of this government aid belies the myth of Goldman as a collection of the smartest cats in the world. All of this stuff sounds complicated, but when you get right down to it, it isn’t. Ask yourself how hard it would be for