The tea baggers, the tea smoking wackados, the plastic patriots are still around and still delusional - see the comments in this thread. Not much has changed since Maria Armoudian and Matt Taibbi's research report in 2010, The Tea Party is Still Composed of The Delusional, The Hysterical and Conspiratorial Fantasists
MA: And the rhetoric that you find that has been used over and over from politicians. Sarah Palin’s approach, you said, was right out of the playbook of Richard Nixon.The tea baggers are still using the general term for their bogieman "big government". One of the problems with that is that more and more of the economy is being privatized, especially at the state level - in return ordinary working American are paying more and getting less in return. Their high taxes protests are just plain silly or delusional sense taxes are at the lowest in decades. The biggest growth in government is in fact being propelled by state tea baggers legislators who are literally putting government in control of the most personal decisions individual citizens make. Several commenters at that thread claim liberals don't like facts. How would these tea baggers know sense they do not seem to have the cognitive skills required to recognize a fact.
MT: Right. This is the whole silent majority idea is playing on this kind of Southern white resentment, this idea that, “we obey the law, we pay taxes, we work and somehow it’s all these other people that are reaping the benefits, these people who don’t want to work, these people who are immigrants, and they want to come and steal our social services.” That’s the same kind of idea, the silent majority. Hillary Clinton used some of the same rhetoric in her campaign as well, the “forgotten people” that she talked about. This rhetoric is very useful in getting people to not focus on what happened on Wall Street. It was creating resentment between white middle-class people. And lower-income minorities and the rich New Yorkers were never in the picture anywhere.
MA: How does the Tea Party fit in with your overall assessment of our economic disasters?
MT: I wrote Griftopia really as a crime book about what happened on Wall Street in the last ten or fifteen years. But the politics are an element of the crime, and there had to be a mechanism through which they could get ordinary people to not pay attention to what was going on. To me, the Tea Party was an example of exactly how that works. I see it as a phenomenon where Wall Street has found a way to convince ordinary people to back their political agenda and their deregulatory aims, under the rubric of “we’re going to get the government off our backs,” and it’s really, in the end, it’s just going to be off their backs, but ordinary people believe in it.
MA: People say they don’t want government and yet they still want all the services that government does. But they somehow don’t connect the dots, it seems.
MT: Right, they somehow want their food to be clean; they don’t want to drink poisoned water; they want to have cops to protect them from burglars, but they’re very attracted to this whole idea that the government causes all of our problems. As I travel around the country, most of the Tea Party people I talk to -- a lot of them are small business owners. They have hardware stores or restaurants, and they see regulation as an ADA inspector or a health inspector coming to bother them and ring them up with little fines here and there. That’s their experience with government regulation. And so when they think about JP Morgan Chase and Goldman Sachs and regulating those banks, to them it’s the same thing. They have no idea that regulation for these big companies is really a law enforcement problem, that it’s not this little niggling health inspector type of business.
MA: I think the best description of the Tea Party that I have heard in a long time was when you said, they’re not crazy or necessarily always wrong, but they’re an anachronism, fighting a 1960s battle in a world run by 21st-century crooks.
MT: Right, the Tea Party is really geared up to fight the Johnson-era forced desegregation battle – busing or HUD housing. I was in Westchester County in New York where HUD was forcing this small, mostly white town to accept a low-income housing project. This is the kind of stuff that turns the Tea Party on, this whole idea of the interventionist government, activist judges. And yeah, there are some of those issues that are still extant, that are still being played out.
MA: But they’re small in comparison to the big problems that we’re facing.
MT: Yeah, this space age global financial thing dwarfs all of those issues in magnitude, and they just don’t get it. And there is no politician that’s speaking to them about it, which is the really depressing part.
MA: And overall, mass media have not really done a very good job of explaining this.
MT: Right, I think that part of the problem is that the people who cover this stuff for a living, the financial press, are geared toward a specific audience. That audience is people who are in the business. They have gotten out of the habit, if they were ever in it, of explaining any of it. And to draw on the ESPN analogy, its kind of ESPN is not for people who don’t understand sports. They don’t pause to explain the rules of football to you every two minutes. They assume you know what they’re talking about, and that’s exactly how the Wall Street Journal and the Financial Times operate. That’s why I think they were flat-footed a bit when the crisis happened because they didn’t have the tools to explain all this to everybody else.
MA: Another key point you have been making is that while political systems can be really problematic, it sometimes takes a guy at the top to help make this kind of mess. You identify Alan Greenspan as that person. You wrote, “His rise to the top is one of the great scams of our time.” How do you see this as the “perfect prism” through which to see American politics.
MT: Alan Greenspan’s personality embodies the kind of contradiction in American politics. On the one hand we have this propaganda about how government has no place in the economy whatsoever: “There should be no regulation; the government’s only rule is armed forces and the police.” You hear all this talk in the Tea Party now about strict constitutionalists, that the government [should] abolish every department except for the army. Greenspan believed that on the surface, but at the same time that he was preaching this objectivist proto-capitalist religion, he was building a massive welfare state for Wall Street. It is a complete contradiction -- “Get the government off our backs,” but also, “Let’s make the government into a permanent insurance policy for rich people.” All of those contradictions were in his personality.
MA: You connect him to the philosopher/author, Ayn Rand. Talk about her role in his philosophical development.
MT: She was this great novelist who wrote all these very ponderous long novels like The Fountainhead and Atlas Shrugged. The general theme of all of them was that there were two classes of people: the producers and the parasites. In her books, the producers were the great industrial figures who actually created businesses and commercial empires, and everybody was somehow feeding off of them. You were either making something, or you were a parasite. That ethos is still very much alive; it’s part of the Tea Party rhetoric. They talk about “water carriers and water drinkers” and split the world up into those two categories. Greenspan actually spent a lot of time with Rand, they had these little tea parties at her house, and he was under her tutelage. He was one of her protégés who directly carried the flame for her religion. But it was ironic that he ended up being the chief regulator of the economy that had been an anathema to everything that she believed, being a government regulator. Yet he somehow did it and didn’t feel contradicted about it.
MA: She doubted his commitment to her philosophy at a certain point too, according to your account, calling him a social climber.
MT: In the end she famously said, “I think Alan basically is a social climber.” He had already flirted with government by that time. He had gone to work for Nixon’s transition team. Although he tried to be loyal, in the end she turned against him and said some very bad things about him.
MA: Ultimately, you make Greenspan sound inept, not necessarily a bad guy, and that’s what led to the disasters under his watch.
MT: I think the most important thing with Greenspan as it pertains to the current problem is his attitude towards derivatives. He became the Fed chairman at the very beginning of the age of derivatives. This was right before the ‘87 stock crash, which was caused by derivatives. They were these computerized instruments that were pegged to derivative transactions. He completely missed the significance of that. In the early ‘90s, there was a series of disasters, including the Orange County disaster, that were caused by a variety of these instruments such as the interest rate swaps and foreign exchange swaps. Greenspan never understood this stuff. He thought that they were just tools for creating more liquidity, and he persistently went before Congress and said that we do not need more regulation of these instruments. Later on in the year 2000, he became a pivotal figure in affirmatively deregulating these forever in a law called the Commodity Futures Modernization Act. He was very much the driving force behind that, which then led to the mortgage crisis. That’s where derivatives really blew up and where we saw these collateralized debt obligations and other fancy devices that were created to disguise crappy sub-prime mortgages as AAA-rated debt. But he actually thought that they were harmless instruments that banks could use to make a little bit more money. He didn’t see the catastrophic potential.
MA: You’ve said that every country has scam artists; but only in a dying country, only at the low end of the most distressed third world, are people like that part of the power structure. Do you really mean that?
MT: I lived in Russia for ten years, and one of the things that attracts me to this Wall Street story was that it reminded me of what I had seen in Russia. In the former Soviet Union, I saw this incredible pessimism. There was no belief in the future because there was so much instability that people who had the ability to take anything, steal anything were doing it. They wanted to get the money and get out of the country as quickly as possible. They might steal the money from the government and buy a villa in France. That was the modus operandi in those years. That’s how I see the financial services industry in America with the mortgage scam.
It’s the same mindset, whether it was the guys at companies like Countrywide who were pushing people into bad loans when they qualified for good ones, or the banks who were immediately taking these loans and selling them off to pension funds and insurance companies knowing that they were going to explode, or the hedge fund guys who were intentionally creating masses of crappy loans to dump off on other people, or the ratings agencies who were rating stuff that they knew was crap. Then at the very top you had companies like Goldman Sachs and Deutsche Bank that were basically getting the taxpayer to buy this stuff through the bailouts, knowing that it was severely over-valued. It was the “let’s get what all we can right now before it all blows up” mindset that you see in a third world country.
MA: You say that there’s another half -- the outsourcing through foreign sovereign wealth funds. What are these funds, and how are they connected to all of this?
MT: This is an ancillary part of the story. A sovereign wealth fund is basically like a giant hedge fund that is government owned, and they’re particularly popular in the oil producing countries of the Middle East. You have a country like Saudi Arabia or the United Arab Emirates, for instance, that gets a lot of revenue from oil, and they put the excess cash in this giant fund that looks for investment opportunities around the world to grow itself bigger. My friend who works at one of these foreign funds called me and said, “I was in a meeting, and a bunch of guys from an American investment bank showed up with a slide projector and tried to sell me and my bosses the Pennsylvania Turnpike. They sat down, showed us all these pictures and said, ‘look the toll booths are in good shape the roads are paved and you should buy this thing.’” And they did try. The State of Pennsylvania shopped the Pennsylvania Turnpike for a period of time. They ended up not doing that deal, but there are cities and states all around the country that are doing these deals.
MA: So they are selling parts of the highways? What else?
MT: In Chicago, it’s the parking meters. They sold 75 years worth of parking meter revenue for the City of Chicago. The Abu Dhabi Investment Authority is at least a 26 percent owner in the Chicago parking meters now. Now there are no parking holidays in the city of Chicago. You have to pay meters on Lincoln’s birthday, on Christmas, Thanksgiving. If you’re an alderman and you want to have a street fair or something like that, you basically have to pay an exorbitant fee to the investors in order to have the right to hold a fair in your own neighborhoods. That’s happening all over the country. There are dozens of these deals going through.
