I get the sense that Matt Taibbi is hitting his stride now, and is starting to become the major writer of the Obama era from the WTF side of the telling. I have been reading him for some time now, and he just keeps getting better and better. Going back to around the '04 campaign and forward, he seemed amused by the insane quality of American campaigning, and if you've read 'Spanking The Donkey' you know it falls into the Thompsonesque style of covering politics-- splat out insightful but not aspiring of actual policy influence. I don't know that Matt had done ludes or bennies while writing STP, but I wouldn't blame him if it was necessary.
So if you missed it, read Taibbi's latest, The president has packed his economic team with Wall Street insiders intent on turning the bailout into an all-out giveaway; and then you can read a post by Tim Fernholz over at TAPPED, The Errors of Matt Taibbi; and then, what is an eviscerating come back by Taibbi aimed toward Fernholz, On Obama's Sellout.
Felix Salmon nails the back-and-forth drama:
Fernholz's game of gotcha comes up with precious little of real substance.
...it's worth cross-checking everything that Fernholz says against what Taibbi actually writes, because often Taibbi simply doesn't say what Fernholz implies that he says.
...Fernholz is basically saying that Taibbi is right, and that not only is he right but that he will now and henceforth utterly overshadow anyone else who's criticizing the Obama administration from the left. At the same time, however, despite Taibbi's astonishing ability to encapsulate and personify the entire group of people who criticize the administration, he's not even going to manage to "make a dent", because he's not going about his job in an evenhanded J-school manner.
Personally, I love it that Taibbi exists, and I'm impressed that his 6,500-word screed (into which a great deal of work clearly went) in fact has very little in the way of factual errors, let alone "lies". Yes, Taibbi is polemical and one-sided, and he exaggerates his thesis, and he's entertaining; I daresay he's learned a lot from watching Fox News. And no, I would never want to live in a world where everybody wrote like that. But Taibbi is one of a kind, and we can enjoy him and learn from him as such. He might not end up changing policy in Washington. But he's doing a much better job of making the policy debate relevant to Rolling Stone's readership than anything Tim Fernholz has ever done.
Taibbi concludes with the same take obvious take on Fernholz as what Salmon wrote:
...The Prospect writer argues that "the problems Taibbi tries to describe aren't some ridiculous cabal" but instead "come from group-think and structural influences." Correct me if I'm wrong, but this was exactly the point of the article.Then the basic disagreement that Fernholz has with Taibbi is stylistic, and that's all he's got. Whatever.
Taibbi is going to be very influential on our side. He certainly comes across to me, as someone that has been skeptical that Obama was ever any different than Clinton, as speaking the truth. I took a lot of shit from others in the progressive blogosphere during the '08 for not drinking Obama's hopeaid, and like Digby, I find it exciting to see a voice like Taibbi's emerge on our side with a big platform with a loudspeaker. In fact, its good to see that Markos is now calling idiocy. As Barry Ritholtz says in the comments on Taibbi that "he seems to capture the Zeitgeist of the moment perfectly... The best way to enjoy Taibbi is to think of it as the culmination of frustration by the public..." and since he alone seems to be occupying this massive space of un-done journalism, I'll reiterate the opening, in agreement with a comment from the Reuters link, that "Taibbi's highly entertaining abrasive style is much more policy minded than it seems. He is, for my money, already THE reporter of the Obama era."
I'll give one substantive example in all this back and forth from above to make the case, when Taibbi responds to this "irritating" passage of Fernholz:
"Neil Barofsky, the inspector general charged with overseeing TARP, estimates that the total cost of the Wall Street bailouts could eventually reach $23.7 trillion." It could, if every single loan guaranteed by the Federal government failed at once and all of the assets bought with those loans were destroyed -- and many of those loans are to homeowners, including low-income homeowners, through Fannie Mae and Freddie Mac, or to small businesses. Some of that money went to Chrysler and GM in what was primarily a job saving move. TARP's actual outlays are only $518 billion (still nothing to sneeze at), including foreclosure relief for homeowners. More money has been actually allocated so far on fiscal stimulus, including funds to reinforce the social safety net, than on the bank bailouts.
That:First of all, Barofsky did use that number, so let's get that out of the way -- there's no factual issue with the passage I wrote. The Prospect writer wants to take issue with Barofsky's number and imply that the use of it is misleading. Obviously Barofsky's number is a worst-case scenario. But let's cut the bullshit about the bailouts being intended to help ordinary homeowners and save auto workers. We could have paid off every subprime mortgage in America for about $1.4 trillion and instead shelled out at least ten times that to Wall Street, primarily to pay off derivative bets made by bankers on those assets.
The writer notes that the total TARP outlay was only $518 billion, and implies that this is the entire outlay for the bailouts when in fact the TARP is just one small slice of the bailout package -- most of the bailout monies went out through little-known Fed programs like the TALF, the TLGP, the TIP, the PPI, and the Maiden Lanes. The number my friend Nomi Prins is using now for the bailouts is about $14 trillion in total outlays, and just as Barofsky pointed out, that number could rise. But to imply that the bailout outlay is not only comparable to the $700 billion stimulus but smaller than it is totally disingenuous.
The bailouts have been a massive boon to Wall Street, not so much to the rest of us (again, see Nomi's report on that). Most of the bailouts came in the form of very cheap money lent out to the same banks that caused the crisis, who then took that money and lent it out at market rates, pocketing the difference.
That's where all these billions in bonuses for the major banks are coming from this year. It's almost impossible to not make mountains of money when your cost of capital is next to nothing because you're borrowing your money from the government basically for free. Moreover we issued government guarantees for all the least responsible banks in the country -- so while you and I have to keep our same old shitty credit scores, all the people who leveraged themselves to the hilt and bet the farm on subprime mortgages that we ended up bailing out now get squeaky clean, brand-new AAA credit ratings to borrow from. The cost of credit for them plummeted thanks to these guarantees, while we're paying the same old rates to borrow our money.
This, again, is perfectly in line with the basic premise of the article. Geithner and Ben Bernanke continued a bailout policy that rewarded the very people who were most responsible for the crisis. The rest of the population did not see those same benefits. We can argue about the motives behind Obama's bailout decision, but the numbers are not really a factual issue.
We should thank Tim Fernholz. I hope Taibbi keeps on getting irritated; I certainly have been for some time now and as it keeps getting worse, I enjoy reading it laid out in this sort of pissed-off truth-teller populist-progressive perspective.
We've got a bunch on nonsensical dolts on the right trying to tell the nation how Obama has messed up, while few have taken the time and research, like Taibbi is doing, to put together the populist anger against what is going on from a progressive perspective.
Update [2009-12-12 23:14:37 by Jerome Armstrong]:
I see that Charles Lemos has commented on Taibbi's article, and and writes that: "Robert Rubin wasn't CEO at Citibank when Citi went in all on CDOs, Charles Prince was. To blame Rubin for Prince's failings undermines much of his argument."
The nit-picking about whether Robert Rubin is the boogie-man cabal-leader is really not that interesting to me. Throw that part out imo. Because its really aside from the core of what is deserving in Taibbi's writing (Like what I blockquote above). Yea, Taibbi is compelled to personalize the story a bit too much, and he even admits to such a Rubin error in his response, but those are just personal facts misplaced, not substantive critiques of Taibbi's assult of our political class assumptions that led the bailout decision-making over the past 16 months. Speaking as someone within the Democratic ranks, I don't think a circular firing squad is helpful, but listen: Huge mistakes have been made with the ongoing (yes ongoing) financial giveaway.
And I agree with the second point too, made by Charles:
This is not to suggest that much of Taibbi is saying isn't true but his premise that Obama wasn't beholden to Wall Street prior to winning the nomination is simply not true. If Obama "sold out," it happened long before he was elected to the Senate. His record in the Senate was a centrist one. He voted for the Bush-Cheney Energy policy. Progressive Punch ranked him as the 25th most liberal Senator. Obama outbundled Clinton on Wall Street and that's quite an accomplishment considering that Clinton represented NY in the Senate. Taibbi is not one to let facts get in the way of a good expletive-laden rant.Anyone that looked at the amount of money Obama was pulling in from financial interests could tell this; and as Ben Smith notes
, "...at the pivotal moment, Obama worked closely with Hank Paulson to support the bailout." Right, the argument that Obama was ever pure is untrue; but that just gets us back to square one again. Look at this bailout policy as its unfolded
. A massively unfair burden of debt to the middle-class taxpayer; an extremely benevolent bonus to mega financial corporations; and a severely damaging hit to the Democratic Party's brand as being a party of the people and not the elite. It was done wrong, and it needs to be spelled out how it is being done wrong
-- I don't give a damn how impolite either.
Update [2009-12-13 11:56:21 by Jerome Armstrong]: I have to just laugh at the irony of the arrows that are thrown my way whenever I point out something less-than-desirable regarding Obama. Throughout the '07 & '08 primary, while I was pointing out that Obama wasn't really that different than Clinton, it was about how wrong I was (too cynical to hope & believe); and now that it turns out, with nearly everyone seeing that's the case (especially in terms of Treasury & State), its about taking false umbrage that anyone would have expected Obama to govern any different. I'm consistently amazed at the mental gymnastics on display.