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Matt Taibbi’s new book, Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America, was reviewed this weekend in the Sunday New York Times Book Review.

The review was rather positive, with some quibbles towards the end.

If you find Taibbi’s writing entertaining — and I do — then you should read both the full review and the published excerpt.

NYTBR:

Among the unfortunate legacies of the financial crisis of 2008 is a tendency among commentators to soft-pedal the outrage over what happened. In too many accounts, blame is considered impossible to assign given the complexities of modern-day finance. Those inclined to point fingers at Wall Street or Washington are frequently derided as innocents who do not grasp how the world really works.

The result is an apologia that goes something like this: Mistakes were made, despite the best intentions of financial professionals. Bankers lent too much money to poor people who never should have bought homes. Models used to measure risk broke down, and regulators were swamped. All of this was a shame, but accidents are a part of life, and an unavoidable part of the swashbuckling style of capitalism that has enriched Americans for generations.

Nonsense, Matt Taibbi says. In “Griftopia,” a relentlessly disturbing, penetrating exploration of the root causes of the trauma that upended economic security in millions of American homes, Taibbi argues that what unfolded was far from accidental. Rather, the nation suffered the equivalent of a hostile takeover of key areas of its commercial life by investment banking houses, while regulators and members of Congress abdicated their responsibilities either because they were influenced by campaign cash or because they believed the fairy tale that unsupervised markets always work best. The result, Taibbi asserts, was a thieves’ paradise — Griftopia.

A contributing editor for Rolling Stone magazine, Taibbi is best known for the metaphor he hurled like a grenade at the Wall Street goliath Goldman Sachs, calling it “a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.” He amplifies that characterization here, pointing out that Goldman managed to collect billions of dollars in taxpayer bailout funds that were paid to American International Group (A.I.G.).

Taibbi persuasively dismisses the argument that the financial crisis was caused by poor people with a taste for real estate, delineating how Wall Street eagerly handed out mortgages to anyone with a pulse, and then used the home loans as the material for a far more lucrative enterprise — the exotic investments known as derivatives. The derivatives market depended upon a steady supply of mortgages. But when too many of the bets went bad, Wall Street persuaded the Treasury to construct bailouts that Taibbi describes as a “labyrinthine financial sewage system designed to stick us all with the raw waste and pump clean water back to Wall Street.”

Full NYT review is here;  See our previous book excerpt here.

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Source:
Thieves’ Paradise
PETER S. GOODMAN
NYTBR, December 24, 2010  
http://www.nytimes.com/2010/12/26/books/review/Goodman-t.html