Review: "The Divide: American Injustice in the Age of the Wealth Gap" by Matt Taibbi
Monday, June 30, 2014 at 9:42PM

Thomas Piketty's book "Capital in the 21st Century" has been receiving substantial praise (and more than a little criticism) for highlighting the historical trajectories of wealth inequality, and has added ammunition to the ongoing conversation about the economics of the contemporary world.  But another book, published nearly at the same, sketches the more insidious and overlooked contours and manifestations of wealth inequality outside the economic realm. Matt Taibbi's "The Divide: American Injustice in the Age of the Wealth Gap" highlights the striking divergence of legal, political, and social experiences of the rich and the poor in the United States.  Rather than focusing, as Piketty does, on measures of wealth, Taibbi shows how the hallowed principle of equal protection under the law has become a laughable farce in any number of arenas of American life.  He sums up American culture and politics with a stark assessment: "We have a profound hatred for the weak and the poor, and a corresponding groveling terror before the rich and successful, and we're building a bureaucracy to match those feelings." (xx) With that bureaucracy, which consists of a vast constellation of state and private institutions, programs, and legal apparatuses, contemporary America has come to rest upon "the implicit idea that some people simply have more rights than others. Some people go to jail, and others just don't." (xix) This is the Divide from which Taibbi's title comes--on one side, a world in which the intensive gaze of law enforcement leads to disproportionate arrest, any state benefits come with intrusive, capricious, humiliating regulations, and the most marginal people are forced to remain marginal through expensive, time-consuming navigation of deliriously complex institutions.  Alongside this labyrinthine system is the world of high finance, a world in which freedom from scrutiny and regulation, aggressive flouting of convention and law, and a casual disregard any kind of human decency are traits to be honored, and, as Taibbi flatly states "a person with enough money literally cannot be prosecuted for certain kinds of crimes." (325)

Taibbi's interest in just how different the experience of the justice system is for people at opposite ends of the economic spectrum grew out of his longstanding, impassioned reporting of the 2008 economic crisis and its subsequent aftershocks.  His 2010 book "Griftopia:  Bubble Machines, Vampire Squids, and the Long Con that is Breaking America" explained in clear language what happened in 2008, and how the quest for newer, riskier ways to make money led to the collapse of the banking sector and nearly cratered the world economy.  His subsequent reporting for Rollingstone Magazine charted the further excesses of multinational finance.  But what struck Taibbi during this time was that, despite the mountains of evidence of gross fraud and misconduct, almost none of the central players in the 2008 crisis, or any banking scandal since then, have gone to jail.  Fines, some of them unprecedented in US History, have been levied against corporations, but there have been no prison sentences.

The explanation for this comes from the prosecutorial strategy of "Collateral Consequences".  The essence of this concept is that large fines are a better punishment for corporate malfeasance than arrests, and Taibbi explains the geneaology of this concept, developed by Attorney General Eric Holder while working in the Clinton Justice Department, and how it came to be the standard practice in corporate prosecution.  But Taibbi is highly critical of Collateral Consequences, arguing that it has turned what was a stop-gap position allowing the prosecution of more cases into an excuse for not punishing corporate fraud.  To highligh this, he uses three massive fraud cases--the Lehman Brothers buyout, the Chase-Washington Mutual Episode, and the attempted destruction of Fairfax Financial Holdings by a group of shortsellers--explaining these seemingly mystifying cases of financial misconduct and fraud in clear terms, and ultimately how "Collateral Consequences" led to almost everyone involved getting off not only scot-free, but with piles of money to their names.

At the same time that the banking industry has been growing into the behemoth of "Too Big to Jail", incarceration rates for other crimes have continuted to increase, despite a drop in violent crime in the United States.  Again, the Clinton Administration were responsible for much of this pattern. It was Clinton's attempts to "end welfare as we know it" through increasing requirements and scrutiny of recipients, as well as numerous other "tough-on-crime" initiatives in the 1990s that have created the increasingly horrific and humiliating circumstances faced by the poor in the United States.  Taibbi's incredibly rich stories here are almost case-studies in the way in which poverty is criminalized in numerous areas of American life.  He follows multiple people through their experiences with the US justice system, the US immigration system, and the Welfare benefits system, showing how, at every step, individuals and families have to give up basic rights of privacy, access to speedy or fair trials, and any money or time they might happen to have scraped together. His descriptions of welfare recipients having their homes ransacked and their consumption habits interogated for evidence of fraud is particularly horrifying, but the numerous stories he tells of individuals caught up in mass arrests by New York City police officers for the most innocous or mundane habits (Taibbi finds peope arrested for standing in front of their homes at night, possesing a pink magic marker, or smoking a rolled cigarette) are equally disgusting and mystifying.  And Taibbi notes that, in all three of the legal domains he surveys, the complexity of the institutions and bureaucracies responsible frequently make mistakes, funnelling innocent people into inescapable legal, economic, and political situations of poverty and misery

Reading these two strands alongside each other highlights the hypocrisy inherent in both systems.  As Taibbi says "That's what nobody gets, that the two approaches to justice individually make a kind of sense, but side by side they're a dystopia, where common city courts become factories for turning poor people into prisoners, while federal prosecutors on the white-collar beat turn into overpriced garbage men, who behind closed doors quietly dispose of the sins of the rich for a fee." (82) Convictions of welfare fraud leads to a loss of essential benefits by people already marginalized, while corporate fraud is treated with, at best, economic punishments that barely dent yearly profits.  Undocumented immigrants face a nightmarish world of fines and fees, incarceration without habeus corpus, and danger to life and limb if they come into any kind of contact with the police (who are required to turn over any undocumented immigrant to the Immigration service).  At the same time, international finantial crime routinely crosses borders and uses the static qualities of national law to avoid prosecution for crimes.  Taibbi starkly notes that drug possesion charges, even minor ones "can ruin a person's chances for obtaining a student loan or a governmen job... nix his or her chances of getting housing aid or a whole range of services... You can lose your right to vote and your access to financial aid. You can even have your children taken away." (51) One of the most striking examples of the hypocricy of the Divide that Taibbi documents occurs on the day the US Justice Department announced a record fine against HSBC for its involvement in drug and terrorism money laundering. On that day, a man Taibbi spoke to was heading to Rikers Island prison for a stint of 40 days for a half-smoked joint found in his pocket during a "Stop and Frisk" episode.  While the bank paid an extraordinary fine (though not a damaging one for a multi-billion dollar institution) for its role in funding and provisioning the global drug trade and its concomittant violence, a non-violent man with a technically legal amount of Marijuana in his pocket did more jail time than anyone at HSBC. 

"Fight the Vampire Squid!" Molly Crabapple's poster from Occupy Wall StreetThere is so much richness to Taibbi's accounts that it's difficult to not say more about this book (his discussion of the shady world of robo-signed credit card default judgements is as sinister as it is unbelieveable).  Suffice it to say, the book is a valuable primer for the extra-economic aspects of income inequality, and a stark reminder that there is more to class divide than simply access to wealth or lack of it.  The entire structure of contemporary American life appears as what Taibbi colorfully describes as "a florid and malevolent bureaucracy that mostly (not absolutely, but mostly) keeps the rich and the poor separate through thousands of tiny, scarcely visible inequities." (xxii) Taibbi's book is not pleasant reading, and doesn't leave one optimistic about prospects for change, but it is a powerful and rich reminder that inequality is not merely a question of wealth and numbers--it is a constellation of ruined lives, dystopian legal systems, and hypocritical treatments of identical crimes.  

The book is worth the cost alone for the illustrations by noted artist Molly Crabapple, whose delightfully detailed and nightmarishly cartoonish drawings sketch the Divide as a kind of Boschian hellscape of gears, mouths, and faceless monsters.    


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