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Mailbag: Mainstream Punditry, the Financial Crisis and the Tea Party

POSTED:

Readers, there almost wasn't a mailbag today -- had there been a loaded weapon in my home during yesterday's football games, you'd be reading a classic "Comma Self" headline this morning, as in, "Rolling Stone Writer Kills Nine, Shoots Cat, Self."

However, I chose sedatives over weaponry yesterday, and so here goes. A general announcement: I'm going to start deducting points from readers who send in questions like, "When are you going to start writing about solutions instead of just bitching all the time?" I'll get into this more at some later date, but can you imagine what a book-length version of me "writing about solutions" would be like? I almost can't imagine something I'd be less excited to read.

I'm not going to say this job is demanding in the same way digging ditches or performing surgeries is demanding, but there's a degree of difficulty involved just in coming to some complicated social subject/issue blind and then quickly describing on paper how it all works and all the different ways we should all be depressed to the point of suicide by it. It's taken me 20 years to learn how to do this particular thing well. And when you come along and blithely describe it as "just bitching," that hurts! This is my life's work! My vocation! And you want me to give it all up to "write about solutions?" I would suck at that.

Plus, isn't the solutions part what we have people like Bernie Sanders and Elizabeth Warren for?

Anyway, on to the mailbag:

Matt,
Brent Musburger just said, "This is for all the Tostitos" before the game winning kick of an NCAA Football National Championship.  Considering his past gaffes (A.J. Hawk's girlfriend-turned-fiancee, etc.) has he just cemented himself as the worst sports broadcaster of all time? I can't even
imagine *Joe Buck* being that tacky.

Michael Scheimer, Boulder, CO

Michael,

I was watching that live and nearly horked up a piece of General Tso's chicken. The pregnant silence after he delivered that line was so deafening, even through the TV broadcast, it was hilarious. I have to imagine he was paid an enormous sum of money for that little "ad-lib," and for Brent's sake I can only hope that it was a lot of money, because otherwise that was, you're right, about the lamest broadcasting call of our generation.

Matt,

I've noticed you've been appearing more and more on various media outlets -- primarily MSNBC.  I'm am not trying to be snarky or imply anything but I'm wondering if you feel that appearing as a TV pundit has any impact on your writing and or, well, being...going from technical "outsider" to "insider."


The question arises from my observing Joan Walsh of
Salon following  a similar trajectory.  Noticing Ms. Walsh's interaction with  Chris Matthews -- of whom I'm not a particular fan in most cases -- I've  wondered whether she is tempering her opinions or holding her tongue because of  the venue and his power, and I've wondered whether that also has an effect on  Salon's editorial policy.  So, do you think as more and more independent  journalists are folded in the loving arms of the "mainstream media," that TV  punditry is "corrupting" of independent thought?  Or that the platform is  worth the compromises?


Congratulations on your ongoing body of work -- you're our Mencken at the very least, and embody what "journalism" can and ought to be in this culture of belief.

Sincerely,
Curtis

Matt, 

With your instincts and your intolerance for bullshit, how can you stand being in the punditry?  I see you bantering opposite some of the great bloviating non-thinkers of our time, dispensing the same talking points on show after show.  Doesn't this artifice, and the commodification of your (often half-assed) ideas, make you want to jump out of your skin?  In Russia, and in the years just after your return, you relentlessly bludgeoned other journalists, often for selling themselves.  Do you ever feel like a hypocrite?

Sincerely,

Karen

Curtis/Karen,

You know, there was a time in my life when I squirmed through basically harmless marketing processes like TV and radio appearances (I was a complete tool especially about having my picture taken) and was generally a Difficult Personality who tried to insist upon his right to communicate with the world entirely through dense 8,000 word features. Now I'm more Zen about the whole thing, and in fact pretty embarrassed about what a dick I used to be over this stuff.

As for my earlier bludgeoning of journalists (and I'm pretty sure I'm still doing that -- didn't I spent like half of last year, and half a book chapter, whaling on people like David Brooks and Megan McArdle?), the problem I had/have with some people in this business was never that they were making money, but that they were lying and/or turning their faces inside out make money. I also consistently pointed out that if you're determined to shade the truth and obfuscate for a living, there are far more profitable businesses to be pursuing than journalism -- so my usual take on those who do that in our business is that these are people who are not only poor journalists, but not even smart enough to know how to sell out effectively.

I don't think I've ever changed my mind about things in order to make more money -- I can't see how something like Griftopia fits into that thesis -- but if any of you spot something suspicious along those lines, please let me know. But I'm pretty sure appearing on Countdown With Keith Olbermann  to pimp my books and articles doesn't qualify. I guess if I really, really put my mind to it, I could find a way to feel guilty about participating in the commercial media system, but should I? I'm seriously asking. I kind of doubt it.

Matt,

You have a somewhat positive spin on the sincerity of the Tea Party, yet the movement has been funded/controlled by the Kochs and their ilk.  Do you reckon they've created a "monster" they can't
possibly control in the long run?
Lars Balker Rasmussen     

Lars,
I have to admit to being a little confused about the whole Tea Party phenomenon. In the year-plus I've been covering Tea Partiers, 99% of them are completely disingenuous goons -- Rush/Hannity fans and Bush Republicans who've crudely reinvented themselves as "constitutionalists" and appropriated Ron Paul's small-government rhetoric in order to disguise their basically unchanging political belief system, which almost exclusively involves hating liberals and leftists and Democrats, and immigrants and nonwhite "water drinkers," no matter what they do. I see the Tea Party mainly as a vehicle for the Republican Party to corral public anger and turn it against Democrats, and also to aid the campaign contributors of both parties in continuing to deregulate the economy and keep certain subsidies in place, and most Tea Partiers are I think willing participants in this scheme.

But I have met a few, like this Chris Littleton fellow in Ohio, who seemed deadly focused on the spending issue, and on some legitimate concerns about expanded government power even when it's the result of Republican legislation (i.e. No Child Left Behind depriving local public schools of autonomy with regard to curricula), and they seemed sincere in that at least. I did not have the same experience with Tea Party leaders in Kentucky, in Nevada, in New York, or other states, where I mostly heard a lot of preposterous Beck-fueled hysteria about how Obama is converting America into a Soviet territory and the health-care program is the first step on the road to government re-education camps (I really heard that one in Nevada). But some key Tea Partiers in John Boehner's home state are insisting that they will not become tools of the Republican Party, and the deadline for them to show their sincerity there is sometime around this spring. If Boehner raises the debt ceiling and the Tea Party doesn't call for his ouster, we'll know something's up. The Republicans meanwhile are going to have to continue to fight to keep the Tea Partiers steamed in the right direction -- and though they may fail in a few places, my guess is that over the long haul they'll be successful in rousing most of the mob against Death Panels and Black Panthers and the like, and keeping them away from the issues of Republican spending habits and/or crappy governance.

Matt,

I'm about halfway into Griftopia and enjoying it about as much as one can enjoy such a disappointing story. I started reading just after seeing Charles Ferguson's Inside Job and wondered about your take on it and some of the other perspectives on the crisis. Wall Street 2? Capitalism: A Love Story?

Jesse

Jesse,

Believe it or not, I haven't seen Inside Job yet, although I hear I should. Honestly, my wife and I haven't been to any movies at all in the last months -- I usually see every Coen Brothers movie right away, and we haven't even seen True Grit yet. As for Capitalism: A Love Story, I liked it. I think Moore's movies on the whole are very effective in boiling complicated social issues down to their core outrage/absurdity. The bit about the overworked airline pilot in that movie I thought was especially effective, and I also really liked the Wallace Shawn scenes. Actually I can't think of a Wallace Shawn movie I haven't liked.

Matt,

I can't believe what I just read.  Jamie Dimon talking about how serious the looming epidemic of municipal bankruptcies is.   

Ummm... JP Morgan is directly responsible for two very notable ones, JAMIE.  The Jefferson County sewer fiasco and the Chicago parking meter swindle.

Where did he find the balls that big to come out and nonchalantly issue advisories about a "terrible" crisis for which his bank is heavily responsible?

...Wow.
Kyle,

Kyle,

Don't forget Denver and a host of school districts in Pennsylvania and Los Angeles County, among many, many others.

I bet that we're going to find out that the corruption in the municipal debt sector has been greater than is currently believed. The whole auction-rate bond world is set up in a way that makes corruption on the part of the banks almost an inevitability -- it's a paradise for churning and fee-gouging, with a setup not to unlike the option-ARM mortgage deals. Just like option-ARMs, municipalities take more upfront cash in exchange for the variable risk of higher potential future rates; municipalities who sign up pay relatively low interest rates to borrow money through bond auctions, but the catch is that they have to hold auctions for that same bond repeatedly, and if any of those auctions fail, the borrower suddenly has to pay fantastic penalty rates. To give just one of hundreds/thousands of examples, the auction for a bond for Lynchburg, Virginia failed a few years back and in just a week the interest rate jumped from just above 4% to 15%. On that same day three years ago, 29 other auctions failed, leaving the bonds with penalty rates of 12%-18%. Imagine dozens of cities suddenly looking at paying three and four times their usual bill for debt service, and you can imagine how these budget crises develop.

This is how banks make their money in the credit world: you offer lots of cheap cash, but you sign the borrowers up to lengthy contracts full of loopholes and catches, and they slip into any one of them, suddenly they're paying fees and penalty rates through the wazz. We've all been there with credit cards, and that's actually our money, and we're playing close attention to every figure in every bill. Muni scams on the other hand involve taxpayer money, cared for by public officials who may or may not have reached office with the help of the lending bank in question. It's almost impossible to imagine an easier method of stealing: it's like breaking and entering into a house whose owners leave the door open along with a note explaining that they won't be back for four years.

The municipal debt business used to be maybe the most boring sector of the whole financial services industry. Municipalities borrowed money at low fixed rates over long terms, then paid the money back on time, end of story. It wasn't until the banks started cooking up these crazy variable-risk instruments and teaming up with corrupt politicians to get taxpayers to sign their futures away on them that these debt problems began spiraling out of control. I think a lot of these auction-rate deals and interest-rate swap deals should be declared illegitimate, certainly when there's a pay-for-play issue (which was the case in Jefferson County and other arenas), if the banks at any time committed fraud during their service of these deals (particularly on the auction-rate side; more on that some other time), and if other predatory tactics were used.

Doubt that will happen, though. I imagine instead we'll see federal and state bailouts of the more troubled regions, with much of the money going to pay off debts to bondholders and/or banks.

Submit your questions to asktaibbi@rollingstone.com

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Matt Taibbi

Matt Taibbi is a contributing editor for Rolling Stone. He’s the author of five books and a winner of the National Magazine Award for commentary. Please direct all media requests to taibbimedia@yahoo.com.

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