Matt Taibbi Uncensored: Finance Nothing More Than A ‘Street Scam’

Submitted by QTR’s Fringe Finance

The opportunity to secure an exclusive interview with Matt Taibbi is something I thought I’d never get…but alas, here we are.

Taibbi is the head of Racket News and his reputation as a fearless investigative journalist precedes him. From his groundbreaking coverage of the 2008 financial crisis to his more recent explorations of censorship with the Twitter Files, politics, systemic inequality and the inner workings of Congress, Taibbi’s body of work reflects a deep commitment to uncovering truths and challenging conventional narratives.

To have the opportunity to pick his brain is a rare privilege that I’m happy to bring my readers.

First, I asked Matt about why more people on main street don’t know about how the Fed works. He told me: “They also do a tremendous job of keeping people like Nomi Prins or whoever else who might be trying to explain some of these issues, keeping them from the public. It was very frustrating after 2008 trying to get anyone at all to comment on, you know, what exactly QE was, you know, or give an explanation that would make sense to an ordinary person.”

He added: “You just, it’s almost like there’s been a proclamation that these issues are sort of out of bounds for the ordinary person, which is unfortunate because they have critical importance for every single person on the planet, which, I mean, as you know, it’s just very frustrating, that dichotomy.”

“And I think that’s true of a lot of sort of high finance stories. I was originally supposed to do just one story about the 2008 crash and what happened and to try to translate that for presumably a young college audience. And at first it was very difficult because I had no experience in dealing with mortgage-backed securities,” he told me. “I didn’t know what they were. I didn’t know how they worked. But once you get into it, it’s really just – it was just a ripoff. I mean it’s not – it’s like a street scam.”

Matt continued, talking about 2008: “They were selling something that wasn’t as valuable as they claimed. It’s like when you look outside and you see somebody selling a phony Prada bag on the street or whatever. Like it was that. It was just dressed up in a lot of jargon and a lot of acronyms. I think that’s true of a lot of these issues. But they, they, I think they intentionally, don’t you think they intentionally keep it sort of shrouded in a lot of jargon and difficult language so that people don’t understand it, yeah they have to.”

Taibbi then railed on Paul Krugman: “So I first noticed this, I guess I was reading Paul Krugman last fall. He did like a whole series. He’s done probably a dozen of these articles, maybe a half dozen, where the substance of it is people are saying they don’t feel positively about the economy, but they’re wrong. Here’s why they’re wrong. And even when the question was phrased as how do you feel about the economy, here’s Paul Krugman who’s, like, living somewhere in the Caribbean.”

I asked Matt about articles like the one from The Atlantic that I skewered last year, blaming regular everyday people for inflation. He responded: “Well, I think the public is much more skeptical of, you know, pronouncements about the economy that they hear from politicians from Wall Street. They, you know, the much maligned act of doing your own research, people actually do that. One of the reasons there was such a violent reaction to the whole meme stock ape movement was because some of these people were actually realizing that it doesn’t take a whole lot of work to be as good at this as anybody who makes a gazillion dollars at a hedge fund.”

“And people did build up some literacy about this, and I think that’s been really helpful. And they’ve also become better informed about how some of the financial subsidies and scams work, monetary theory right like that was something that wasn’t on anybody’s radar until at least in this generation until 2008 so I think those are all good things you know but the basic problem of widening inequality widening unfairness I don’t think there has been a ton of progress there.”

When I asked Matt about the danger of blaming capitalism for these problems, when QE is more like socialism for the rich, he said: “When I started writing about high finance in 2008, the first articles I did were very popular among people on the left. And I think a lot of people misunderstood some of the things that I was writing about to be, you know, sort of unvarnished indictments of capitalism when it wasn’t really that.”

“The story, the reason I was getting all these calls about banks like Goldman Sachs was that there were smaller players who were mad that there was this implicit bailout for these big players who had screwed up worse than everybody else and were being rewarded for it. I mean, there was a lot of anger among people on Wall Street that, you know, at the Bob Rubin types who made terrible decisions, mismanaged their companies or people at Lehman Brothers, right, who didn’t who made these gigantic idiotic bets on subprime way past any rational, you know, the time when it was rational to do so, right. And they get bailed out for it. Meanwhile, everybody else gets left holding the bag. And that’s not fair.”

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From there we talked about how inept and generally lobotomized and useless most of Congress is, especially when it comes to matters of finance. Matt agreed, stating: “Most of the members, if you’ve ever been around a member of Congress or a senator, their schedules are so crazy that even if they had the intellectual capacity or the interests in the topic, they wouldn’t have time to delve into most of the legislation that they’re voting on. The way the Congress works, half the time when they get a bill it’s 10 hours after it’s out of the rules committee and nobody knows what’s in it and they’re voting on it, you know, those.”

“So most of what they do, as you say, it’s a public relations thing where the whole goal of the day is to get 30 seconds of video that they can use for a fundraising campaign on an email. And they do that by having the member read something off a script that was written by somebody on whatever committee or even a communications person. And nine times out of ten, that person doesn’t really know anything about the issue or has predetermined what they’re going to say based on some other political consideration that has nothing to do with it. It was really frustrating during the Dodd-Frank Act because one of the unreported stories of that whole thing was that there were only like four or five members in the entire Congress who had anybody in their shops who knew anything about, for instance, clearing.”

Matt continued, railing on Congress: “Congress is a kind of a weirdly dysfunctional universe where the only time anything really interesting happens, it tends to happen because there’s someone who’s been there for a really long time and has had the time to dig in to one subject. Like, for instance, Chuck Grassley has been in the Senate forever and has a couple of staffers who are really good at knowing how the Pentagon budget works. And so they’ve, you know, managed to get through some things that save taxpayers some money. But it took like 20 years to get there, you know what I mean? And it doesn’t work like that with finance.”

You can listen to our full hour long interview at this link.

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