20.6.11

DO YOU RAGE, OR DO YOU ATTEMPT TO UNDERSTAND?  Matt Taibbi, whose The Great Derangement was material for a 2009 book review, is back with Griftopia: Bubble Machines, Vampire Squids, and the Long Con that is Breaking America.  Book Review No. 15: once the name calling is over, what reforms will be in place, and with what effect?  Mr Taibbi opens with a dig at Tea Party enthusiasts (page 12):
If you want to understand why America is such a paradise for high-class thieves, just look at the way a manufactured movement like the Tea Party corrals and neutralizes public anger that otherwise should be sending pitchforks in the direction of downtown Manhattan.

There are two reasons why Tea Party voters will probably never get wise to the Ponzi-scheme reality of bubble economics.  One has to do with the sales pitch of Tea Party rhetoric, which cleverly exploits Main Street frustrations over genuinely intrusive state and local governments that are constantly in the pockets of small businesses for fees and fines and permits.

The other reason is obvious: the bubble economy is hard as hell to understand.  To even have a chance at grasping how it works, you need to commit large chunks of time to learning about things like securitization, credit default swaps, collateralized default obligations, etc., stuff that's fiendishly complicated and that if ingested too quickly can feature a truly toxic boredom factor.

So long as this stuff is not widely understood by the public, the Grifter class is going to skate on almost everything it does -- because the tendency of most voters, in particular conservative voters, is to assume that Wall Street makes its money engaging in normal capitalist business and that any attempt to restrain that sector of the economy is thinly disguised socialism.
Elsewhere in the book, Mr Taibbi identifies the role of the Federal Reserve -- yes, that bete noire of Ayn Rand and Ron Paul -- in keeping the various bubbles inflated and the Connected Class solvent: socialism for the rich.  It's apparently more fun to snark at Sarah Palin or Michele Bachmann.  Or to miss the point.
Our world isn't about ideology anymore.  It's about complexity.  We live in a complex bureaucratic state with complex laws and complex business practices, and the few organizations with the corporate willpower to master these complexities will inevitably own the political power.  On the other hand, movements like the Tea Party more than anything else reflect a widespread longing for simpler times and simple solutions -- just throw the U. S. Constitution at the whole mess and everything will be jake.  For immigration, build a big fence.  Abolish the Federal Reserve, the Department of Commerce, the Department of Education.  At times the overt longing for simple answers that you get from Tea Party leaders is so earnest and touching, it almost makes you forget how insane most of them are.
Again, easier to snark than to analyze.  Look at that list: the inflater of the bubble, the chief almoner of corporate welfare, and the creator of content-free content standards.  Mr Taibbi seems to understand the problem at some level, as this passage from page 30 suggests, but he doesn't develop a theoretically consistent argument.
There are really two Americas, one for the grifter class and one for everybody else.  In everybody-else land, the world of small businesses and wage-earning employees, the government is something to be avoided, an overwhelming, all-powerful entity whose attentions usually presage some kind of financial setback, if not complete ruin.  In the grifter world, however, government is a slavish lapdog that the financial companies that will be the major players in this book use as a tool for making money.
It thus follows that enumerated and limited powers are insane.  Mr Taibbi doesn't go there.  He has another opportunity, later in the book, to go there again, when he voices fears that Obamacare (his word, not mine) will be the next public program to be captured by the grifters.  Reward people for mastering the complexities of the procedural republic: do not act surprised when people master those complexities.

(Cross-posted to 50 Book Challenge.)

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