The Divide: American Injustice in the Age of the Wealth Gap

by Matt Taibbi

Hardcover, 2014

Call number

303.3 TAI

Collection

Publication

Spiegel & Grau (2014), Edition: First Edition, 448 pages

Description

Business. Politics. Sociology. Nonfiction. HTML:NEW YORK TIMES BESTSELLER â?˘ NAMED ONE OF THE BEST BOOKS OF THE YEAR BY THE WASHINGTON POST, NPR, AND KIRKUS REVIEWS A scathing portrait of an urgent new American crisis   Over the last two decades, America has been falling deeper and deeper into a statistical mystery:   Poverty goes up. Crime goes down. The prison population doubles. Fraud by the rich wipes out 40 percent of the worldâ??s wealth. The rich get massively richer. No one goes to jail.   In search of a solution, journalist Matt Taibbi discovered the Divide, the seam in American life where our two most troubling trendsâ??growing wealth inequality and mass incarcerationâ??come together, driven by a dramatic shift in American citizenship: Our basic rights are now determined by our wealth or poverty. The Divide is what allows massively destructive fraud by the hyperwealthy to go unpunished, while turning poverty itself into a crimeâ??but itâ??s impossible to see until you look at these two alarming trends side by side.   In The Divide, Matt Taibbi takes readers on a galvanizing journey through both sides of our new system of justiceâ??the fun-house-mirror worlds of the untouchably wealthy and the criminalized poor. He uncovers the startling looting that preceded the financial collapse; a wild conspiracy of billionaire hedge fund managers to destroy a company through dirty tricks; and the story of a whistleblower who gets in the way of the largest banks in America, only to find herself in the crosshairs. On the other side of the Divide, Taibbi takes us to the front lines of the immigrant dragnet; into the newly punitive welfare system which treats its beneficiaries as thieves; and deep inside the stop-and-frisk world, where standing in front of your own home has become an arrestable offense. As he narrates these incredible stories, he draws out and analyzes their common source: a perverse new standard of justice, based on a radical, disturbing new vision of civil rights.   Through astonishingâ??and enragingâ??accounts of the high-stakes capers of the wealthy and nightmare stories of regular people caught in the Divideâ??s punishing logic, Taibbi lays bare one of the greatest challenges we face in contemporary American life: surviving a system that devours the lives of the poor, turns a blind eye to the destructive crimes of the wealthy, and implicates us all. Praise for The Divide   â??Ambitious . . . deeply reported, highly compelling . . . impossible to put down.â?ťâ??The New York Times Book Review   â??These are the stories that will keep you up at night. . . . The Divide is not just a report from the new America; it is advocacy journalism at its finest.â?ťâ??Los Angeles Times   â??Taibbi is a relentless investigative reporter. He takes readers inside not only investment banks, hedge funds and the blood sport of short-sellers, but into the lives of the needy, minorities, street drifters and illegal immigrants. . . . The Divide is an important book. Its documentation is powerful and shocking.â?ťâ??The Washington Post   â??Captivating . . . The Divide enshrines its authorâ??s position as one of the most important voices in contemporary American journalism.â?ťâ??The Independent (UK)   â??Taibbi [is] perhaps the greatest reporte… (more)

User reviews

LibraryThing member rivkat
Don’t read this unless you can tolerate wanting to scream a lot. Taibbi brilliantly contrasts the treatment of the rich and the poor in various ways, particularly with respect to the criminal justice system. He writes viciously about the frauds of the big banks and the high-level decisions not to
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prosecute anyone because … it’s not really crime, and money fines are okay, and so on. Then he contrasts the experience of mostly black and brown young men who get arrested—and therefore implicated for life in the criminal justice system, and disadvantaged or outright barred from getting various opportunities in education and jobs—and processed without concern for their factual guilt. As he says, one could imagine an argument for a system that was lenient across the board, or one that was harsh across the board, but there is no non-awful defense of our current system. There are moments of black humor, not just in the Kafkaesque nightmare of low-level arrests, but in descriptions of financial frauds, such as the justification for giving O.J. Simpson of all people a liar’s loan that enabled him to get a mortgage even with huge outstanding judgments against him that ensured he couldn’t actually afford a house—a note in his file that “he didn’t do it.” Ha ha ha sob. Recommended for anyone who can handle heartburn.
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LibraryThing member Dan.Allosso
I like Matt Taibbi a lot. I love his Rolling Stone articles and I used to love his weekly blog there. I'm glad he's back at RS and publishing articles. I think he was one of the best reporters of the financial crisis, and I especially love his ability to make the details of these issues
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understandable. I also love the freedom RS gives him to drop the f-bomb on some of these "vampire squid" executives.

That said, I liked The Divide rather than loving it. I think there's a ton of great information in it, and I agree with Taibbi's thesis: that there's something broken about a society that fails to pursue any of the Wall Street criminals who egregiously broke laws and ruined lives in search of bigger year-end bonuses, especially when that society is simultaneously cracking down on -- and cracking heads of -- poor folks in "bad neighborhoods." My only objection to the book was that I thought the anecdotes went on a bit too long, and I thought they were too exclusively focused on the problems of the urban poor, especially in greater New York City.

The book begins well, with a stark comparison. "At its peak in 1991," Taibbi says, "according to FBI data, there were 758 violent crimes per 100,000 people. By 2010 that number had plunged to 425 crimes per 100,000, a drop of more than 44 percent" (p. 1). The contrast: "In 1991 there were about one million Americans behind bars. By 2012 the number was over 2.2 million, a more than 100 percent increase." Taibbi believes "We’re creating a dystopia, where the mania of the state isn’t secrecy or censorship but unfairness" (p. 12). The process begins, in Taibbi's story, with a 1999 memo written by an obscure Clinton staffer named Eric Holder. "Bringing Criminal Charges Against Corporations" is an interesting memo, and it had an interesting role in the reinterpretation of the Justice Department's role. For me, it was a little too much of an insider story, though. I was more interested in the connections between Holder (and his associate Lanny Breuer) and the law firm of Covington and Burling (one of whose founders wrote extensively in opposition of the New Deal back in the 1930s). When Holder and Breuer were running Justice, twenty-two other lawyers from that single firm held key positions in the Department. I'd like to hear more about that.

Taibbi has collected a lot of these bizarre, unjust contrasts. "For instance , in 2011, the state of Ohio —the same state that lost tens of millions in the early 2000s when its pension fund bought severely overpriced mortgage-backed securities from a Lehman Brothers banker named John Kasich, who would later become governor —tried to recoup some of its losses by sending out 22,000 notices to Ohioans seeking “overpayments” in either welfare or food stamps"(p. 341). In a passage that reminds me of Chrystia Freeland's discussion of cognitive capture, Taibbi describes President Obama's remarks on 60 Minutes in December, 2011, suggesting that a lot of the "least ethical behavior" on Wall street wasn't strictly illegal. "The thing that’s interesting about this claim," Taibbi says, "isn’t that it’s factually wrong, which incidentally it almost always is, often to a humorously enormous degree. What’s interesting is that the people who make this claim usually believe it to be true. Even Barack Obama , despite the fact that he’s almost universally understood to be an outstanding lawyer and should know better, probably believes it to be true. This weird psychological kink is where the Divide lives. Increasingly, the people who make decisions about justice and punishment in this country see a meaningful difference between crime and merely breaking the law" (pp. 397-398). Crime, it turns out, is what poor people are increasingly assumed to be doing, even when they're just standing outside their apartment building having a smoke at 1 AM. Breaking the law is just being "aggressive" with the rules of the game, and it's perceived as victimless -- even when taxpayers have to ante up billions of dollars in bailouts.

And let's not forget to follow the money. While the Financial Crisis Inquiry Committee got $10 million in funding, "the federal drug enforcement budget leaped from $ 13.275 billion to $ 15.278 billion. That meant that just the increase in the national drug enforcement budget for the year of the biggest financial crisis since the Depression was roughly two hundred times the size of the budget for the sole executive branch effort at formally investigating the causes of financial corruption" (p. 407). Policing and incarceration are big business in America. It's the one thing, after all, we can't outsource overseas.
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LibraryThing member cdogzilla
Blistering critique that forces the reader to confront a hypocrisy that has metastasized within the American conception and application of the Rule of Law.
LibraryThing member BruceCoulson
It jumps around a bit too much; I wish Taibbi had stayed a little more focused. But this is still an excellent account of the dichotomy between 'too-big-to-jail' and those the system makes a serious effort to jail. (My Kafka-esque moment was Michael, whom the police and DA were actually begging to
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take a plea for over a year, before finally dropping the case for lack (read none) of evidence.) While white-collar criminals who openly admitted to breaking the law and stealing billions weren't even charged. Taibbi also breaks down what these offenses are, and why they're a crime, in easy-to-follow language. Essential in order to understand the world we live in now.
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LibraryThing member froxgirl
Matt Taibbi is the former Rolling Stone muckraker (and I do mean MUCK!) whose reportage was so valuable during and after the 2008 financial crisis. In this book, he documents "justice" (more MUCK) for each side of The Divide: the bankers and hedge fund thieves, and then those of us who are victims
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of the American judicial system nightmare.

He gives vivid examples: Andrew Brown of Bed-Stuy, a working man who is continually harassed, stopped and frisked by NYC police for blocking the sidewalk at 1:30 AM and made to pay fines and waste time in court for not committing a crime other than being part of an evil quota system. Then there's "The Greatest Bank Robbery You Never Heard Of", where the Lehman collapse nets Barclays 5 billion dollars, all stolen from pensions funds, with no penalty.

Re: Lehman and Dick Fuld, its CEO: "Fuld wanted complete control over the company (Lehman) for a simple reason. They wanted to transform the bank's entire financial strategy into a vehicle for maximizing their personal compensation."

Taibbi skillfully rips your guts out with stories of immigrants deported by Georgia cops who stop anyone non-white and force them to pay thousands to retrieve their vehicles. In contrast is the hedge funders' mission to destroy an insurance company because they had bet against its success. They pay large fines, avoid any admission of guilt, and go on their merry way.

In none of these instances does the government protect anyone but the 1%. Bill Clinton started it, with "welfare reform" and the removal of Glass-Steagall. Eric Holder, Lanny Breuer, Cyrus Vance Jr, Tim Geithner, and Barack Obama let the disgraceful crimes of HBSC, UBS, Chase, etc occur on their watch and did nothing.

"If you choose to take the money over and over again from the Wall Street crowd while the welfare moms keep getting jail and community service, now suddenly you've institutionalized the imbalance."

A most heartbreaking book. Taibbi explains complicated issues in beautiful prose and lets fly sentences like this: "If the law is applied unequally enough over a long enough period of time, law enforcement becomes politically illegitimate."

READ THIS CRITICALLY IMPORTANT BOOK. I wish it was fiction but it's not.
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LibraryThing member plappen
Among the consequences of the Wealth Gap in America seems to be the establishment of two different sets of laws, one for the rich and one for everyone else. This book gives the details.

The sale of Lehman Brothers to Barclays Bank was advertised as a last-minute, desperation fire sale. How did
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Barclays manage to get an extra five billion dollars as part of the deal? Among the reasons why the Justice Department doesn't prosecute "too big to fail" banks, or their top executives, is because they have lots of money, and lots of lawyers, to delay and delay the case until the government gives up. It is easier for the government, and it looks better, to go after smaller targets. Evidently, the agreements where a bank agrees to pay several billion dollars without admitting guilt, even for money laundering or handling Colombian drug cartel money, "sends a message." (Really?) There is the story of a group of billionaire hedge fund managers who conspired to drive a Canadian insurance company out of business, using dirty tricks. Countrywide Financial intentionally did not want to know details of the financial health of the people to whom they were lending money. They were happy to lend to anyone.

On the other side of the divide, how can America's prison population be going way up while the rate of violent crime is way down? The answer is: Stop and Frisk. Did you know that standing on the sidewalk in front of your house in New York City can get you arrested and thrown in a police van that just happens to be nearby? After going through the court system, charged with Blocking Pedestrian Traffic (even if there was no one else on the sidewalk at the time), you could be back in front of your house. This time, you are standing at the edge of the sidewalk, almost on the street. Prepare to get arrested again, charged with Blocking Vehicular Traffic (even if you weren't actually in the street).

The new criminal class in America seems to be welfare applicants and recipients. The author does not mean to suggest that accusations of welfare fraud should not be investigated, and, if necessary, prosecuted. What is the sense in assuming that Everyone is trying to defraud the system? This is not a case of "guilty until proven innocent" but "we know you are guilty, and eventually, we'll prove it."

This book easily reaches the level of Wow. It is a very eye-opening, and rather disheartening, look at life in present-day America. It is extremely highly recommended for all Americans.
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LibraryThing member jimocracy
This book was very well written and (for it's subject matter) was easy enough to follow along. The author did a great job of story telling and it made me incensed on both sides of the divide. I don't know which angered me more; the stories of poor people and the injustice dealt upon them or the
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stories of the wealthy and how they can operate unethically and illegally with impunity. This was a great read!
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LibraryThing member annbury
This book is damning indictment of the American legal system from two directions. From the bottom up, poor people and people of color deal with a "gotcha" legal system that criminalizes the fact of being poor, or non-white, or both. From the top down, the financial services industry -- the people
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who brought you the world financial crisis -- are exempt from any real punishment. Both sets of people are part of a Kafkaesque system, but while the poor must cope with it, the rich float above it, for the most Kafkaesque of reasons: too big to fail. This is a hard book to read, because Taibbi makes the experiences of the victims of the system painfully real, and the insousiance of the white collar criminals hard to bear. It's well worth reading, however: you won't forget it.
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LibraryThing member arelenriel
This book provides an excellent answer on what is wrong with the system. Taibbi's hypothesis is that the system is deliberately set up so that the poor and the middle classes only get poorer, so that education and training are worth nothing, and money is worth everything. A really sad commentary on
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American society today.
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LibraryThing member Paul_S
Despite claims to the contrary I still get the feeling the author thinks petty criminals should be let go just like white collar criminals are (otherwise why go into such detail showing the absurdity of some cases). Both should be treated just as harshly. Otherwise fantastic book. Bloody
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depressing. Book could become current again soon since nothing has changed since.
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LibraryThing member PattyLee
Definitely a must read. Very well written.

Awards

Pages

448

ISBN

081299342X / 9780812993424
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