THE DIVIDE: American Injustice in the Age of the Wealth Gap, by Matt Taibbi. Spiegel & Grau, 416 pp., $27.
Matt Taibbi's heart is in the right place. He's outraged that, all over America, the little people are getting screwed by the banking and criminal justice systems, while Wall Street executives get away with the financial equivalent of murder.
There's probably a pretty good book in this paradox. Unfortunately, "The Divide: American Injustice in the Age of the Wealth Gap" isn't it. That's a shame, because the contrast he highlights in this extended rant is real, and it's tragic.
"The Divide" oscillates between stories of wrongdoing by fabulously well-paid financial chieftains and systemic abuse of the poor, but the effort is undermined by shallow thinking and hasty notebook emptying. It's worth examining the book's shortcomings in detail to understand the real nature of the problem and how it might be remedied, or at least palliated.
Bear in mind throughout that, at some deep level, Taibbi and the more coherent critics of Wall Street, financial regulation and the criminal justice system are right about the essential unfairness of our current arrangements. And Taibbi vividly describes some outrageous cases of police abuse. But passion in a just cause isn't enough to explain, let alone solve, major social and political problems.
"The Divide" is based on the premise that we have entered some especially grim new era of injustice in this country, a premise for which it offers scant evidence beyond the anecdotal. While incarceration rates have soared in recent decades, poor and black Americans have always been shortchanged by the justice system, as Taibbi himself briefly acknowledges, while Carnegie, Frick and Rockefeller probably enjoyed greater impunity than today's tycoons. Police brutality, by which Taibbi is properly appalled, was arguably even worse a generation ago, when it was a staple of prizewinning reportage at big city newspapers. Impoverished criminal defendants weren't even entitled to have a lawyer provided until a celebrated 1963 Supreme Court case.
When dealing with the perfidy of Wall Street, meanwhile, the author has little useful to say about how our leading financial institutions, once owned by partners whose personal stakes moderated recklessness, became risk- addicted juggernauts (a topic he delved into in 2010's "Griftopia"). Nor does he wrestle with the difficulties of punishing a corporation; fines, after all, are effectively paid by shareholders, who often are pension funds and other institutions investing on behalf of widows and orphans with no say in how a company was run. Taibbi acknowledges that indicting a corporation can have devastating consequences for innocent employees and customers, but he dismisses the argument without refuting it. Surely, prosecuting the big banks, for example, would have caused them to collapse, presumably to be rescued once again by taxpayers.
It's particularly strange that he doesn't home in on the destructive drug laws that lead to so much of the policing and incarceration he deplores -- although he observes that "the federal drug enforcement budget leaped from $13.275 billion to $15.278 billion" in the same year a mere $9.8 million was allocated for the Financial Crisis Inquiry Commission to get to the bottom of the crash.
"The Divide" is weakest in groping for reasons for the status quo it properly despises. There is simply no thoughtful account of how we got here. It's possible that providing one would entail an indictment of the voters, which is inconvenient for a populist, or a fuller account of the past, which for some reason is terra incognita in this book.
Instead, sounding like Max Weber on speed, the author falls back on some off-the-cuff voodoo about bureaucracy. The system, he says, is messing with people (although he uses a nastier word than messing). "It's the logic of our new shadow government. It turns out that we're too lazy to govern ourselves, so we've put society on bureaucratic autopilot. ... We have a giant, meat-grinding bureaucracy that literally alters the physical makeup of its citizens."
That's about it for explanations, and forget about any concrete solutions. Given the author's horror of bureaucracy, can more government really be the answer? Would prosecuting individual bankers make lenders more cautious or just frighten away the best people? Are we willing to trade our 30-year fixed-rate mortgages (and their tax-deductible interest) for a more stable banking system, as in Canada? Could our dream of near-universal home ownership be part of the problem? Is there any practical, constitutional way to limit the power of big money in politics?
Taibbi doesn't say, which is a shame, because until we address these questions, the tragic divide of his title is likely to endure.