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« It's Not Palin's Party, Take Her Tea And Shove It! | Main | Is The Stock Market Rigged? - Dylan Ratigan Video - Ask Brian Sack, He Runs The PPT »
Saturday
Oct232010

Griftopia -- Read An Excerpt Of Matt Taibbi's New Book

photo of matt taibbi

Griftopia:  Bubble Machines, Vampire Squids and the Long Con That Is Breaking America -- By Matt Taibbi

Read the whole excerpt - Rolling Stone

In the summer of 2009 I got a call from an acquaintance who worked in the Middle East. He was a young American who worked for something called a sovereign wealth fund, a giant state-owned pile of money that swims around the world in search of things to buy.

Sovereign wealth funds, or SWFs, are huge in the Middle East. Most of the bigger oil-producing states have massive SWFs that act as cash repositories (with holdings often kept in dollars) for the revenues generated by, for instance, state-owned oil companies. Unlike the central banks of most Western countries, whose main function is to accumulate reserves in an attempt to stabilize the domestic currency, most SWFs have a mission to invest aggressively and generate huge long-term returns. Imagine the biggest and most aggressive hedge fund on Wall Street, then imagine that that same fund is fifty or sixty times bigger and outside the reach of the SEC or any other major regulatory authority, and you've got a pretty good idea of what an SWF is.

My buddy was a young guy who'd come up working on the derivatives desk of one of the more dastardly American investment banks. After a few years of that he decided to take a step up morally and flee to the Middle East to go to work advising a bunch of sheiks on how to spend their oil billions.

Aside from the hot weather, it wasn't such a bad gig. But on one of his trips home, we met in a restaurant and he mentioned that the work had gotten a little, well, weird.

"I was in a meeting where a bunch of American investment bankers were trying to sell us the Pennsylvania Turnpike," he said. "They even had a slide show. They were showing these Arabs what a nice highway we had for sale, what the toll booths looked like . . ."

I dropped my fork. "The Pennsylvania Turnpike is for sale?"

He nodded. "Yeah," he said. "We didn't do the deal, though. But, you know, there are some other deals that have gotten done. Or didn't you know about this?"

As it turns out, the Pennsylvania Turnpike deal almost went through, only to be killed by the state legislature, but there were others just like it that did go through, most notably the sale of all the parking meters in Chicago to a consortium that included the Abu Dhabi Investment Authority, from the United Arab Emirates.

There were others: A toll highway in Indiana. The Chicago Skyway. A stretch of highway in Florida. Parking meters in Nashville, Pittsburgh, Los Angeles, and other cities. A port in Virginia. And a whole bevy of Californian public infrastructure projects, all either already leased or set to be leased for fifty or seventy-five years or more in exchange for one-off lump sum payments of a few billion bucks at best, usually just to help patch a hole or two in a single budget year.

America is quite literally for sale, at rock-bottom prices, and the buyers increasingly are the very people who scored big in the oil bubble. Thanks to Goldman Sachs and Morgan Stanley and the other investment banks that artificially jacked up the price of gasoline over the course of the last decade, Americans delivered a lot of their excess cash into the coffers of sovereign wealth funds like the Qatar Investment Authority, the Libyan Investment Authority, Saudi Arabia's SAMA Foreign Holdings, and the UAE's Abu Dhabi Investment Authority.

Here's yet another diabolic cycle for ordinary Americans, engineered by the grifter class. A Pennsylvanian like Robert Lukens sees his business decline thanks to soaring oil prices that have been jacked up by a handful of banks that paid off a few politicians to hand them the right to manipulate the market. Lukens has no say in this; he pays what he has to pay. Some of that money of his goes into the pockets of the banks that disenfranchise him politically, and the rest of it goes increasingly into the pockets of Middle Eastern oil companies. And since he's making less money now, Lukens is paying less in taxes to the state of Pennsylvania, leaving the state in a budget shortfall. Next thing you know, Governor Ed Rendell is traveling to the Middle East, trying to sell the Pennsylvania Turnpike to the same oil states who've been pocketing Bob Lukens's gas dollars. It's an almost frictionless machine for stripping wealth out of the heart of the country, one that perfectly encapsulates where we are as a nation.

When you're trying to sell a highway that was once considered one of your nation's great engineering marvels — 532 miles of hard-built road that required tons of dynamite, wood, and steel and the labor of thousands to bore seven mighty tunnels through the Allegheny Mountains — when you're offering that up to petro-despots just so you can fight off a single-year budget shortfall, just so you can keep the lights on in the state house into the next fiscal year, you've entered a new stage in your societal development.

You know how you used to have a job, and a house, and a car, and a wife and a family, and there was food in the fridge — and now you're six months into a drug habit and you're carrying toasters and TVs out the front door every morning just to raise the cash to make it through that day? That's where we are. While a lot of this book is about how American banks used bubble schemes to strip the last meat off the bones of America's postwar golden years, the cruelest joke is that American banks now don't even have the buying power needed to finish the job of stripping the country completely clean.

For that last stage we have to look overseas, to more cash-rich countries we now literally have to beg to take our national monuments off our hands at huge discounts, just so that our states don't fall one by one in a domino rush of defaults and bankruptcies. In other words, we're being colonized — of course it's happening in a clever way, with very careful paperwork, so we have the option of pretending that it's not actually happening, right up until the bitter end.

Let's go back in time, to the early seventies. It's 1973, and Richard Nixon's White House makes the fateful decision to resupply the Israelis with military equipment during the 1973 Arab-Israeli War.

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Do you think this guy is a better writer than Taibbi:

 

 

And from last week:

 

 

 

 

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Reader Comments (8)

He is also good at outrage—loud, across-the-board, one-hand-on-chest-the-other-clenched, great gasping gall. "Arms flailing," the second sentence of Griftopia goes, "I manage to scribble," which is about taking notes during Sarah Palin's classic convention speech, but it has wider reverberations, too. "I dropped my fork," he writes later, after hearing from a source at a restaurant about the potential sale of the Pennsylvania Turnpike to foreign investors. He is a fork dropper.

http://www.observer.com/2010/wall-street/father-squid?page=1
Oct 23, 2010 at 2:19 AM | Registered CommenterDailyBail
Velvet Underground Drummer Talks About Her Opposition to Obama

"I disagree with spending / borrowing / printing — damn the torpedoes, full speed ahead! I disagree with the 'we won' attitude, which is the cowardly way of saying fuck you," Tucker said of the Obama presidency. "I disagree with an administration that for twenty months blames Bush. If the president and his minions are so damn smart, why didn't they know the severity of the situation?

http://www.rollingstone.com/music/news/51942/224362
Oct 23, 2010 at 2:22 AM | Registered CommenterDailyBail
Ginger 'could halt bowel cancer'

http://news.bbc.co.uk/2/hi/health/3221547.stm
Oct 23, 2010 at 3:45 AM | Registered CommenterDailyBail
Credit Cards Soon to Get a Makeover

The simple credit card is about to get a makeover.

Next month, Citibank will begin testing a card that has two buttons and tiny lights that allow users to choose at the register whether they want to pay with rewards points or credit, at most any merchant they please.

http://www.nytimes.com/2010/10/22/your-money/credit-and-debit-cards/22cards.html?ref=business&src=me&pagewanted=print
Oct 23, 2010 at 3:46 AM | Registered CommenterDailyBail
Oct 23, 2010 at 3:47 AM | Registered CommenterDailyBail
Want a Big Raise? Get a Wall St. Job

By FLOYD NORRIS

WALL Street incomes are surging back.

http://www.nytimes.com/2010/10/23/business/23charts.html?ref=business&src=me&pagewanted=print
Oct 23, 2010 at 3:48 AM | Registered CommenterDailyBail
dumb ass former fed vice chairman alan blinder says QE has to be big...what a tool..even stiglitz admits it won't work..so tired of these arrogant pricks not even considering that their QE policies might now work...

http://www.bloomberg.com/news/2010-10-22/blinder-says-federal-reserve-making-it-up-with-new-stimulus-tom-keene.html
Oct 23, 2010 at 3:57 AM | Registered CommenterDailyBail

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