Elias Isquith — “It’s total moral surrender”: Matt Taibbi unloads on Wall Street, inequality and our broken justice system

Matt Taibbi, author of "The Divide," tells Salon about Geithner's excuses, Piketty's success and Nixon's cronies

His relentless coverage of Wall Street malfeasance turned him into one of the most influential journalists of his generation, but in his new book, “The Divide: American Injustice in the Age of the Wealth Gap,” Matt Taibbi takes a close and dispiriting look at how inequality and government dysfunction have created a two-tiered justice system in which most Americans are guilty until proven innocent, while a select few operate with no accountability whatsoever....

MT: The book is really just about why some people go to jail and why some people don’t go to jail, and “the divide” is the term I came up with to describe this phenomenon we have where there are essentially two different criminal justice systems, one that works one way for people who are either very rich or working within the confines of a giant systemically important institution, and then one that works in another way for people who are without means. And that’s what the book is about....

Bureaucracies organically flow toward the easier result, and the easier result is always a smaller company, an undefended person, a low-level drug dealer. They hesitate before it decides to proceed against a well-heeled, well-defended company [against which] they’re going to have to fight for years and years and years just to get the case in court … It’s not just about the poor, it’s more about how there’s a class that enjoys impunity and then there’s everybody else....

Morally, it doesn’t work anymore. You just cannot have a society where people instinctively know that certain people are above the law, because it will create total disrespect for authority among everybody else. And that’s completely corrosive. You need to have people believing in the system to some degree — even if it’s just an illusion, you need to have them believing.

EI: You know, with your comment about how people need to believe in the system to some degree, it occurs to me that in a fundamental way, you’re actually making a small-c conservative argument. You’re not saying we need to burn everything to the ground and start over, you’re saying we need to stick with the principles we supposedly all believe in.

MT: People forget that all my sources come from Wall Street. They’re all capitalists, they’re all ardent capitalists. They grew up, their passion in life was reading Adam Smith and believing in that whole world. And I came into this story six years ago, whatever it was, not really knowing a whole lot about it, but certainly I never would have described myself as an ardent capitalist … When people ask me what the solutions are to these problems, for me, the fastest shortcut to everything being cleaned up is disentangling the government from its unnatural support of these too-big-to-fail institutions, forcing them to sink or swim on their own in the real free market. I never would have imagined myself making that argument five or six years ago, but that’s the argument … These people, not only are they not being prosecuted, but they’re not subject to the normal forces of the market anymore, and in a way that enables them even more … If you were to force these companies to sink or swim on their own they’d be vaporized instantly. We see this every time there’s any hint the government is going to stop bailing these companies out or may consider not doing it in the future — they lose billions of dollars in market capitalization overnight …

Salon
“It’s total moral surrender”: Matt Taibbi unloads on Wall Street, inequality and our broken justice system
Elias Isquith | Assistant Editor, Salon