The 2008 financial crisis had profound economic implications for average Americans. As many lost their homes, savings, and jobs, the executives at Wall Street’s most influential investment firms—the men who engaged in risky practices to boost their own personal gain—were never punished for their actions. This speaks to a change in how society and the press views crime, said award-winning author and journalist Matt Taibbi.
Taibbi on Wednesday delivered the Lowell Humanities Series’ first lecture of the semester. Raised in Boston, Taibbi worked for Rolling Stone for 10 years and cofounded The Beast in 2002. He has authored several books, including The New York Times bestseller The Divide: American Injustice in the Age of the Wealth Gap.
Taibbi began his talk by discussing how the character of journalism has changed over the past several decades. He then discussed the 2008 financial crisis and the government’s neglect to punish those corporations who contributed to the crisis.
When he was a child, everyone Taibbi knew worked with the media. All of the journalists he knew shared some common qualities. “They were all jerks,” he said. Reporters back then saw journalism as a trade that did not require higher education, and journalists seemed to hate everyone, especially those in positions of wealth and power. The media as a business that he knew growing up has changed dramatically and systemically, he said.
“There are things going on in American society today that I think press in the old days would have reacted very differently to,” he said. “There are things that they would have caught that the current media does not catch.”
The journalists Taibbi knew growing up seemed to disappear around the 1980s. A very different sort of people replaced them—people who grew up with wealth and who viewed journalism as an alternative profession to banking or law school.
“Twenty years after Watergate, the media became this place where cool kids went after graduation,” he said. “Instead of this isolated tribe of angry social rejects … there was this new group of people who weren’t incompetent, they weren’t bad people, they just had a different view.”
The different views these journalists had changed how the world reacted to the 2008 crisis. When the crisis first erupted, Taibbi was covering Sarah Palin’s acceptance speech for the vice presidential nomination in Minnesota. Although he was with other journalists, none of them seemed to know what was going on, he said.
“This was supposedly the cream of the national press tour, and there wasn’t one person who knew anything about what was going on on Wall Street,” he said. “I asked around the room, ‘Does anyone here know anything about this?’ And it was like a cartoon with crickets chirping.”
Although Taibbi initially had trouble finding information for his story, he soon realized that by researching it as a crime story, rather than a financial story, he could find out more. The entire industry of mortgage-backed securities was fraudulent, he said.
“What the business was really doing was feeding poor people in on one side and cranking out AAA-rated mortgage securities on the other side,” he said. “It was just a common scam, like selling phony Prada bags out of the back of someone’s trunk. They were selling phony AAA-rated securities.”
It was a giant fraud scheme that blew up the United States’ economy, and there was very little reporting about it. In addition to the lack of reporting, there was very little blowback against those who toppled the economy, he said.
“I started to notice a phenomenon, which is that that every story I did had the same punch-line—no one was ever indicted, and nobody ever went to jail,” he said. “There was never any serious criminal investigation.”
The lack of a serious investigation was due in part to the fact that society views those who are wealthy and powerful as different from common criminals. Today’s society is one concerned more for corporations than for the children of a woman convicted of welfare fraud, he said.
“It speaks to a whole change in the way we look at things now, we have a reverence and fear and respect and lack of skepticism about people who are successful and who have power that we didn’t have 30 or 40 years ago,” he said.
Featured Image: Arthur Bailin / Heights Staff