'While mortgage scams go unpunished no surprise that people in places like Ferguson are getting angry'
“If you had a militarized police presence swarming in the lower Manhattan in all the places where capitalism works and every investment banker was stopped every ten minutes on his way to work and have his briefcase inspected, they would be a revolt in a second,” Taibbi told RT's Max Keiser on his show, the Keiser Report.
RT:It seems that financial scandals created enormous dislocations in society. And now we are seeing the result in places like Ferguson.
Matt Taibbi: Absolutely. Writing about this for years, in a way poor black communities in places like Ferguson, they were the marks in the entire subprime mortgage scam, and I realized how it worked. Going back to the Bush years and we start talking about an ownership society, this wasn’t banks doing it for altruistic reasons, this was all about money. What they are really doing is they were creating millions and millions of subprime loans, and then they were mismarking them essentially and selling them to investors around the world – hedge funds, pension funds, foreign trade unions. But the whole thing depended upon creating millions and millions of loans and somebody had to sign their names on the dotted line.
RT:Now it seems that this eruption of violence isn’t coming from nowhere, i.e. Ferguson was a predictable result of what happens when you disenfranchise people, right?
MT: These people were disenfranchised in several different ways throughout this process. Number one: they were some sort of accidental victims of the larger scam. We just needed somebody to sign all these loans and who is better to do it; we will just go to neighborhoods and make all these people take free loans. It is like these crime movies where the drug dealer ends up with free turkeys on Thanksgiving. They are going to these neighborhoods saying “Do you want a free house?” basically. Its American gangsters. They would knock at the door saying “Interested in a loan? You won’t pay anything for two years, you even can get refinance, or you will be living in the south for years and take some cash out of your house”. It sounds all altruistic but in reality what are they are doing is that they are just creating lots of paper that they can chop up, turn it into collateralized debt obligations, invest in banks, and then they would resell it somewhere else and some sucker would buy it.
That happens and these people get into bad loans – that was one negative consequence of it. Then when the markets collapsed, a lot of these people were foreclosed upon with essentially bogus paperwork, and you have this mass perjury effort where you had robber signing scandals, where all the biggest banks in the world were essentially creating chains of title and other illegal documents. They were just inventing them, they were committing frauds in every community everywhere in America, and there has been no criminal penalty for any of that. They just wrote a check to make that go away.
RT:In your books you have been attacking the center of this problem, which is the corrupt culture in big money banks, and there is no attempt to introduce penalties, so it just grows. So you are trying to bring this idea to a greater public, right?
MT: Think about it, if you had a militarized police presence swarming in the lower Manhattan in all the places where capitalism works and every investment banker was stopped every ten minutes on his way to work and have his briefcase inspected, they would be a revolt in a second. Of course there would be violence; they would like to take it somewhere else with all this stuff. In reality they are only doing that in urban centers where they have an incredible police presence in all these places, and it is extremely minor crimes that are being policed so heavily. Meanwhile, these incredibly consequential national-international scams were going totally unpunished. Even if people don’t know the specifics of why that is happening, they can still feel it, people feel that investor bankers are getting away with no penalties or they are writing a check for it to go away. Of course they are going to be angry.
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