Tea Party and the Right  
comments_image Comments

Matt Taibbi on Deluded Tea Partiers, Ayn Rand and How the U.S. Is Like the Soviet Union

Every country has scam artists, but only in a dying country are they part of the power structure.

Continued from previous page

 
 
Share

It’s the same mindset, whether it was the guys at companies like Countrywide who were pushing people into bad loans when they qualified for good ones, or the banks who were immediately taking these loans and selling them off to pension funds and insurance companies knowing that they were going to explode, or the hedge fund guys who were intentionally creating masses of crappy loans to dump off on other people, or the ratings agencies who were rating stuff that they knew was crap. Then at the very top you had companies like Goldman Sachs and Deutsche Bank that were basically getting the taxpayer to buy this stuff through the bailouts, knowing that it was severely over-valued. It was the “let’s get what all we can right now before it all blows up” mindset that you see in a third world country.

MA: You say that there’s another half -- the outsourcing through foreign sovereign wealth funds. What are these funds, and how are they connected to all of this?

MT: This is an ancillary part of the story. A sovereign wealth fund is basically like a giant hedge fund that is government owned, and they’re particularly popular in the oil producing countries of the Middle East. You have a country like Saudi Arabia or the United Arab Emirates, for instance, that gets a lot of revenue from oil, and they put the excess cash in this giant fund that looks for investment opportunities around the world to grow itself bigger. My friend who works at one of these foreign funds called me and said, “I was in a meeting, and a bunch of guys from an American investment bank showed up with a slide projector and tried to sell me and my bosses the Pennsylvania Turnpike. They sat down, showed us all these pictures and said, ‘look the toll booths are in good shape the roads are paved and you should buy this thing.’” And they did try. The State of Pennsylvania shopped the Pennsylvania Turnpike for a period of time. They ended up not doing that deal, but there are cities and states all around the country that are doing these deals.

MA: So they are selling parts of the highways? What else?

MT: In Chicago, it’s the parking meters. They sold 75 years worth of parking meter revenue for the City of Chicago. The Abu Dhabi Investment Authority is at least a 26 percent owner in the Chicago parking meters now. Now there are no parking holidays in the city of Chicago. You have to pay meters on Lincoln’s birthday, on Christmas, Thanksgiving. If you’re an alderman and you want to have a street fair or something like that, you basically have to pay an exorbitant fee to the investors in order to have the right to hold a fair in your own neighborhoods. That’s happening all over the country. There are dozens of these deals going through.

MA: You’re very critical of Barack Obama’s handling of the financial system. You seem to think he doesn’t even measure up to Bill Clinton.

MT: I liked Barack Obama a lot during the campaign. I was very impressed by his intelligence. I thought his heart is really in the right place. He seemed like a good person. And he had this [great] effect on people. There tends to be this anti-intellectual vibe in American politics, and he had the opposite impact on voters; when he spoke to them, he convinced them to think about things a little bit, which is a rare talent in American politics. But he brought in a lot of guys from Wall Street to run his economic policy, like Bob Rubin, who was Clinton’s treasury secretary and one of the key figures of the financial collapse. He brought Rubin back in. They worked very hard to preserve the anti-trust exemption for the insurance industry in the health insurance bill. These companies have built-in subsidies that use the government to protect them from market forces, which was a key thing in the health insurance bill, this anti-trust exemption. So it was very disappointing.