Bill Moyers: The Plutocracy Will Go to Extremes to Keep the 1% in Control
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MATT TAIBBI: Well, the very, very top people won't talk to me. You know, I don't have access to the same people that Chrystia maybe talks to. But I do talk to a lot of people who work on Wall Street. In fact I got started down the road of this whole topic, you know, after I wrote a couple of articles. And then suddenly on this there was this outpouring of people from Wall Street who suddenly wanted to talk to me because they were upset about the direction that the financial services industry was taking.
So I'm hearing a lot from people sort of from the middle on down on Wall Street. And what they're really upset about is corruption. Is this merging of state and private power, where the losers don't lose anymore. I think the people who get really upset are small hedge funds, small banks. And they see companies like, you know, Citigroup and Goldman Sachs and J.P. Morgan Chase make mistake after mistake. And they get rewarded for it what with bailouts and even greater market share than they had before.
And so, you know, my analysis is informed by those people. And I think, you know, I think Chrystia and I agree about a lot of things about, particularly about the growing divide and how extreme it's become. My analysis just might be a little bit angrier just because the, you know, from the point of view that I'm particularly looking at is the corruption and the use of force and state power to keep divide where it is and increase it.
BILL MOYERS: You both have pointed out that we tend to talk as if Wall Street and the plutocracy were a monolith. But it's not. Do you think there is a civil war within the one percent?
MATT TAIBBI: There is absolutely a schism developing in this community. Think about it just on one level, on the level of banking, right? If you have these too big to fail banks, everybody in the world knows that nobody's going to l allow the very biggest commercial banks to go out of business. It will never happen. 2008 proved it, that if they ever get in trouble the government will come in and rescue them. So what does that mean for those banks?
It means that it allows them to borrow money more cheaply because anybody who lends them money knows they're always going to get paid off. The government if, in the worst case scenario, they're going to get paid off. So this gives them an inherent financial advantage over the small, regional commercial bank, which does not have that implied government guarantee. And so those people are furious.
They're furious that they have to compete against these gigantic monoliths that have the implicit backing of the U.S. government. Then there's the other problem of corruption. I mean, I hear all the time from hedge funds you know, these smaller guys who believe that some of the big investment banks are selling them out to even bigger hedge funds, that are, you know, giving away information about their positions to even bigger clients so that somebody else can trade against them.
Or maybe the banks themselves are front running their positions and trading against their own clients. There's this schism developing between the smaller guy the medium size financial player and the very, very big too big to fail companies that are perceived as getting a break, and getting the backing of the government. And also are perceived as getting away with stuff that they wouldn't get away with.