Matt Taibbi is Happy, Even Though Wall Street is a Miserable Place

Picking up on a topic he covered during Blonde on Blonde, Imus wondered if Matt Taibbi is a happy guy. “I am,” Taibbi quickly said. “I’m newly-married. Everything’s good.” Predictably, Imus wasn’t buying it.
 
Trying again, Taibbi said, “Does not being miserable count?” Imus considered this for a moment, and then declared that not being miserable is just as good as being happy.
 
Having settled absolutely nothing, Imus asked Taibbi to share an anecdote from his latest Rolling Stone article, Why Isn’t Wall Street in Jail?, even though the story contains explicit language (or perhaps because it does).
 
On a snowy night inside a bar in Washington, DC, Taibbi was told the following by a former Senate investigator who had worked on a number of Wall Street cases: “For your whole article, you can just say, ‘Everything’s f-ed up, and nobody goes to jail.’”
 
As he thought about this person’s statement, and continued reporting the story, Taibbi learned that it was pretty much a spot-on description. “Wall Street had this massive financial crisis, and apparently, it’s nobody’s fault, because the only person who went to jail was Bernie Madoff,” Taibbi said. And only one other guy—Angelo Mozilo, the former head of Countrywide Financial—suffered any severe individual penalties. “And even he got to keep three or four times more money than he was fined.”
 
One of the key distinctions to keep in mind, Taibbi told Imus, is that while fines were meted out, rarely were they levied against individuals. Or if they were, the sum was so low—like when two Citigroup executives were charged a combined $180,000 for hiding $40 billion in liabilities from investors—it was insulting.
 
On Wall Street, Taibbi was told, it is “a stigma” even to be charged, never mind fined, by the SEC. But the reason none of these outright crooks spend time behind bars is because the system is inherently broken. “The investigators, and the SEC, and the Justice Department are supposed to be reviewing and policing these guys on Wall Street,” Taibbi said. “But the fact of the matter is they’re all the same people.”
 
More often than not, SEC employees wind up becoming partners at defense firms, where they make millions of dollars a year. “These are like college basketball players jumping to the NBA,” Taibbi said. “They’re all waiting for their big shot, and the big contract. So they’re not going to mess that up. They inevitably have this subconscious pull toward these defendants, and they never press these cases.”
 
The mood, in his view, needs to be more adversarial, starting at the top, with the President—any President. “It doesn’t change from administration to administration,” he said of the lax prosecution of financial criminals, adding. “It’s the reason why we consistently have this problem, where these huge, systemic crises that happen on Wall Street go un-policed, or they don’t move against them until it’s way too late, like the Madoff scandal; like Enron; like Rite-Aid; and like this mortgage bubble.”
 
Taibbi was loathe to predict another cataclysmic collapse on the horizon, but he didn’t entirely rule it out, so long as people on Wall Street keep getting away with murder, as Madoff did with his Ponzi scheme. In fact, The New York Times published an interview today with Madoff, in which he insists the banks must have known what he was up to, but chose to ignore it because they too were making a lot of money.
 
“These guys were not master criminals going out of their way to hide stuff,” Taibbi said of Madoff and his crew. “It was pretty obvious to anybody who wanted to look.”
 
It’s also pretty obvious why Imus likes Taibbi so much: asked if he watched the Grammy Awards on Sunday night, Taibbi, whose magazine is devoted to the music industry, admitted to being a cultural illiterate. “I couldn’t tell you who the top two or three recording artists in the country are,” he admitted.
 
-Julie Kanfer