I managed to track down a copy of “The Divide” written by Matt Taibbi and published by Scribe Publications earlier this year.
This book really offers an insight into where Australia is going, as we have set our agenda to following the USA down a similar path to disaster.
Over the last two decades, America has been falling deeper and deeper into a statistical mystery (possibly rubbing off into our own ABS!). As poverty has gone up, crime rates have come down, but the prison population has doubled (I think OZ is following suit). Certainly our local regional prison in Albany is currently about 60%-70% over its design capacity at the last count.
Meanwhile fraud by the rich wipes out 40% of the world’s wealth – yet the rich get massively richer and no one has gone to jail!
In search of a solution, journalist Matt Taibbi discovered the Divide, the seam in American life where two troubling trends – growing wealth-inequality & mass incarceration – come together. Basic rights are now determined by wealth or poverty, allowing the hyper-wealthy to go unpunished, whilst poverty itself has been turned into a crime!
In his book “The Divide”, Taibbi takes us on a galvanising journey through both sides of the American justice system and uncovers the startling looting that preceded the financial collapse as well as the story of a whistle-blower who got in the way of the largest banks in America, only to find herself in the crosshairs. On the other side of the Divide, he shows how the newly punitive welfare system treats its beneficiaries as thieves, whilst stop-and-frisk practices have led to people being arrested for simply standing outside their own homes having a quiet smoke in the evening!
Taibbi lays bare America’s perverse new standard of justice – a system that devours the lives of the poor, turns a blind eye to the destructive crimes of the wealthy, and implicates us all. We in Australia are implicated by association, as we often blindly go “wham, bam with Uncle Sam!”
The book focuses on the banking and financial structures that have risen into a position where the large private banking cartel in the US & its connection with the UK banking cartel have completely corrupted the financial system, after the Clinton administration removed the Glass-Steagall Act from their legislation, which formerly had some semblance of stabilising the banking fraternity. [Glass-Steagall was introduced by the Roosveldt government to re-generate the US economy after the depression of the 1930’s].
He demonstrates how the derivatives market sponsored the massive real estate bubble that then led to the US government bailing out all the private banks who were “too big to fail” to the tune of about $3 – $4 trillion dollars; these banks then manipulated these “bank guarantees” to make further in-roads using methods that should have resulted in their owners and directors all going to jail for at least 200 years, instead they were simply given some small fines of a few million here and there (& probably the fines were paid from the money they were given by the government!)
It seems like our own financial system is closely aligned with the way the US & UK operates and we should be not supporting and giving any guarantees to all those banks that are supposed to be “too big to fail”. Even in the UK they are trying to re-institute Glass-Steagall, but so far without success. The US should have simply nationalised the banks along the lines of our old “peoples bank” Commonwealth Bank of Australia, or the existing Peoples Bank of China.
The Chinese government banking people, I understand, are at present financing a huge 633-unit high rise building project in Melbourne, I suspect to chew up quite a few millions of their US dollars that they currently hold and want to get rid of in quite a smart way to help their domestic pension funds. In the meantime the BRICS international finance group have been launching its own path into the future in global finance [BRICS is the “cooperative” financial model of Brazil, Russia, India, China, South Africa] with an Asian Infrastructure Bank. This has been set up to promote infrastructure and development in areas of the world previously being raped and pillaged by the “western democracies”.
When I’ve spoken to Asian business men they see the US as a “dying corpse” and that Australia is the pot of gold at the end of the rainbow.
See if you can lay hands on a copy of The Divide and I’m sure it will give some food for thought on the Renegade Economists program, broadcast on 3CR, Melbourne. This book is a devastating account of the inequality in America’s justice, immigration and social-service systems; it’s probably what Abbott & Hockey picked up last time they were over in the USA, so that they could frame their new policy programs!
Image – Molly Crabapple