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On Contact: Business secrets of drug dealers

On the show, Chris Hedges discusses the business secrets of drug-dealing with investigative journalist Matt Taibbi.

No one knows exactly how big the underground or illegal economy is in the United States, but most estimates say it's huge, 11%, maybe 12% of the US' Gross Domestic Product (GDP), that's well over $2 trillion. The underground economy, designed to avoid taxation and government oversight, has its own set of rules, one of them being that it deals exclusively in cash. The 2008 global financial meltdown and the economic fallout from the pandemic have, by most estimates, seen an expansion of the illegal economy, where people make an off-the-books living. The IRS estimates it lost $441 billion in taxes between 2011 and 2013 due to unreported wages. There is a cost to flying under the radar. Not only are those that work in the underground economy bereft of benefits, health insurance and worker’s compensation, but they have no legal recourse when they are cheated or exploited. Disputes are often settled with violence. Matt Taibbi, in his new book The Business Secrets of Drug Dealing, which he describes as “an almost true account,” chronicles the life of a successful coast-to-coast black drug dealer in Donald Trump’s America. The book examines the shadowy world of drug dealing, estimated to be a $100-billion-a-year industry in the United States, and lays out its peculiar subculture and peculiar rules for survival and success.

Matt Taibbi's new book The Business Secrets of Drug Dealing.

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CH: Welcome to On Contact.  Today, we speak with the author, Matt Taibbi, about his book “The Business Secrets of Drug Dealing”.

MT: What’s interesting about this story is that he sees all that in the underground world, in the drug dealing world, but he also sees it when, you know, the drug dealing world starts trying to go straight when for instance marijuana gets legalized in California.  For him, you know, lobbying the state government in California to make sure a law allows him to deal is no different at all from giving a gift of, you know, a certain amount of cash to a the reigning drug dealer in the area so that you--he allows you to operate on his territory.  It’s exactly the same thing.

CH: No one knows exactly how big the underground or illegal economy is in the United States, but most estimates say it is huge, 11% or 12% of the U.S. Gross Domestic Product, or GDP, meaning it is well over $2,000,000,000,000.  The underground economy, which is designed to avoid taxation and government oversight, has its own set of rules, one of them being that it deals exclusively in cash.  The 2008 global financial meltdown, and the economic fallout from the pandemic have, by most estimates, seen the illegal economy where people make a living off the books expand.  The IRS estimates it lost $441,000,000,000 in taxes between 2011 and 2013 due to unreported wages.  There is a cost to flying under the radar, however.  Not only for those that work in the underground economy bereft of benefits, health insurance, and workers compensation, but those who have no legal recourse when they are cheated or exploited.  Disputes are often settled with violence.  Matt Taibbi and his new book, “The Business Secrets of Drug Dealing” which he describes as “An Almost True Account”, chronicles the life of a successful coast-to-coast Black drug dealer in Donald Trump’s America.  The book examines the shadow world of drug dealing estimated to be a $100,000,000 a year business in the United States, and lays out its peculiar subculture and peculiar rules for survival and success.  Joining me to discuss his book is Matt Taibbi.  So Matt, I’ve read…

MT: Hi, Chris.

CH: …I think all of your books except your first one which you told me not to read.

MT: Thank you for not doing that.

CH: And so I never thought I would read a Matt Taibbi book extolling capitalism.  So I--I’m going to ask you why you wrote it, although I’m going to guess, like any newspaper reporter, you wrote it because it’s a good story.

MT: Yeah.

CH: But anyway, why did you write it?

MT: Well, yeah.  I mean, you just got it.  So this was--this grew out of--this book grew of a thing that happened to me in my personal life where I had a relationship with somebody let’s just say at another capacity professionally.  And I’ve known this person for a long time.  We were friends to the point where I would--I would have been surprised to hear of anything, even mildly surprising going on in his--in his personal life.  And he came out to me one day after a meal and just told me flat out, “Oh, by the way, I’m a marijuana drug kingpin and I have been for my whole life.”  And he starts telling me this crazy story about how he has this double life that he’s upholding while he’s also had his professional profile.  And it’s a fascinating story and we immediately started thinking about well, how can we tell this without getting him in trouble because the key part of the story is that he never--he never gets caught, so it--it’s unlike a lot of true crime stories and that it doesn’t end with the person in jail.  So we sort of cooked up this thing that’s like a quasi-fictional treatment of things that really happened.  And I was--it was fascinating.  It was really fun and just as from a writing standpoint, I think--I think it was a really, really fun thing to do.

CH: Yeah.  There’s actually some good points in here which I want to pick out.  So I have to just--at the beginning, you write, “Most dealers, no joke, learn their jobs from movies.  They watch and re-watch Paid in Full or Blow or The Wire or New Jack City half-dozen other films.”  And--yeah.  But does it--you know, most work correspondence for the first 24 hours think they learn their job from movies until they get shot at.

MT: That’s true.  That’s true.  That’s true.

CH: So I’m wondering--I watched The Wire, I, you know--I--you taught with me in the prison in East Jersey State.  But--so I’ve taught a lot of drug dealers but they don’t--this guy just dealt weed, which I think is a whole different animal because the stories that I heard about people who were dealing hard drugs was really different and really dangerous.  There was a whole set of gangs or groups of people who exclusively preyed on drug dealers, although he talks about that in the book.  They know he has money, they know he has drugs.  But in a depressed urban environment and he lived in Short Hills of all places.

MT: Well, he lived in both.  I mean I think that was--that was key.

CH: Both.  But he--but he not--he was in that world, in a different kind of world.  But I watched The Wire, it didn’t--I--it didn’t work for me.  I just was kind of like the Black godfather.  It just didn’t work for me.  And I’m wondering, I mean, is that--I just want to start with that fictional representation of the drug dealer.  I haven’t seen it in those movies.  That’s what I get for only watching Jean Cocteau films.  But how much does the movie portrayal--I mean, after writing this book, how much does it actually reflect do you think the industry itself?

MT: Well, I think--I’ve watched a lot of those movies.  I actually really enjoyed those movies, so does this character who was an interesting guy.  I mean, he’s--the character’s name in the book is Huey Carmichael, which is I think a reflection of--he’s very political.  He chose that name for the--for the book.  And he grew up sort of half in the--in the projects and half in a--in a sort of tony suburb where he was very well-educated, very well-read.  And he approached, you know, becoming a drug dealer in a different way that a normal person would like growing up in the projects.  Most people don’t go into it voluntarily like, you know, they had--this guy had other options.  And he sort of chose this life and he entered into it with the idea that I’m going to study this.  I’m going to make my own rules.  I’m going to figure out a way to do this that I--in such a way that I don’t get caught.  So it was very different from the normal kid who, you know, ends up in the street to get--and he has to make $10 that week to, you know, to pay the bills.  This was different.  And then he went to it voluntarily and then kind of gets sucked into it a little further when his friends found out he was making money.  But the--I would say the movie that comes closest to his experience is the--is the first one “Paid in Full” that you mentioned, which is kind of about a character very like this who was hyper cautious and doesn’t do the flashy drug dealer thing, like maintains a sort of inconspicuous exterior.

CH: So all of the successful drug dealers--and I’ve taught a couple in prison, I mean, big drug dealers, but they were dealing hard stuff, they never wore the flashy stuff.  They followed precisely that kind of rule.  I would say there is a common denominator between this character and the ones that come from poor communities, and that is envy.  So his father lives in Short Hills or, you know, I don’t know if it’s really Short Hills, but lives in a wealthy area of New Jersey.  He’s going back and forth.  And he sees all--what all these rich kids have, and even sees what his father has.  I think he talks about some brand of sweater I’ve never heard of that his father…

MT: Yeah, Coogan.  Yeah, exactly.

CH: Well, there you go.

MT: Yeah, I forgot what it is.  Yeah.

CH: That’s right.  But it’s not a Brooks Brothers.  I don’t know what it is.  So--but he--but he starts, you know, being able to buy the same kind of expensive sweater that his father and then his father, at one point, offers him $6,000--or match $6,000 for a car and he has so much money, goes out and buys a nicer version of his father’s car.  But that is also true in poor neighborhoods.  Suddenly, you’re, you know, have a closet of full sneakers that don’t have a mark on them.  You are buying--if you’re stupid, you’re going out, I think a Charger was the car, I always used to hear they had.  But it is that allure of money and that, you know, consumer society, that kind of presentation, having expensive clothing, expensive things, so that was a common denominator [INDISTINCT]

MT: Yeah.  I think there’s a--there’s a couple of things going on with the--with this character.  I think there’s an edible and kind of situation going on where he and his father clashed a little bit.  And this was a way to compete with his old man with whom he had some resentments.  There’s also I think a racial thing going on where, you know, he was going to school in a neighborhood full of kind of rich, white kids who, you know, were handed things like sports cars when they turned 15 and 16.  And, you know, he was African-American growing up in those neighborhoods and he wanted the same stuff.  But he, you know, he couldn’t.  His father was more middle-class.  He, you know, basically worked at a, you know, as a Real Estate Agent.  And, you know, so he--in order to get those things, he had to actually pay for them himself at that age and so he was very highly motivated to do that.  So there’s a lot of those factors that worked, but absolutely the envy end, look, you talked about this being American consumer society, he’s exactly in that mode, like that--his whole value system is based on, you know, sort of America’s ideals of what makes us a successful person.  Well, stuff, money, right?  Like that’s what’s you got to get, that’s how you--that’s how you count winners and losers and that’s how he thinks for sure.

CH: There’s some rules that he lays down and I would say that many of those rules are not just for people who deal drugs but anybody who wants to stay below the radar.  He talks about phones.  But just to throw a little anecdote out, I was after--the Head of the New York Bloods, his name was O. G. Mack, his real name was Omar Portee.  He was released.  I went up to the South Bronx when I was first hired by the Times to find him.  And I had talk with the gang unit and they wanted to put a locator on me because they were also looking for him.  And as soon as they proposed putting a locator on me, I never used the phone again because I knew damn well that--I mean I would go up there and actually leave him notes in his brother-in-law’s apartment.  But that’s actually key.  I mean the whole notion of cutting yourself off from surveillance, he said, “Phone tapping is the most basic technic cops use.  What they’re not on is encryption.  I haven’t used phones since Obama’s first term.”  I thought that was kind of interesting.

MT: Yeah, he has a very low opinion of the investigative capabilities of most police officers and essentially what he says is that, you know, minus the technology, there’s not a whole lot to most modern cops, at least at the level he was dealing with.  So if you avoid that stuff, they, you know, they have to rely on sources and, you know, it’s some similar journalism most of the people who were in the policing business are pretty mediocre at what they do.  They’re not going to be able to figure it out especially if you stay on the move.  So that’s one of his rules, you know, staying off the phones, staying encrypted.  And then I think he has some others that I think are really important like always at the square job which is, I think, really interesting because among other things, it plays on the racism angle, it’s--that’s a big theme in this book is using the racism of the law enforcement apparatus against them, right?  So if a police officer sees a, you know, a Black man dressed a waiter from Applebee’s who has a real job, they tend just to assume that this guy’s not up to anything and he used that to his advantage.

CH: Well, he talks about conforming to racial stereotypes as a way to survive.  But let’s talk about--let’s talk about policing when we come back.  When we come back, we’ll continue our conversation about the underground world of drug dealing with the author and journalist, Matt Taibbi.

CH: Welcome back to On Contact.  We continue our conversation about the underground world of drug dealing and the illegal economy with the author and journalist Matt Taibbi.  So before the break, we were talking about the, really, bankruptcy of policing which you wrote about in your book, on your very fine book, on Eric Garner.

MT: “I Can’t Breathe.”  Yeah.  Uh-hmm.

CH: “I Can’t Breathe.”  And also to a little extent, “Divide.”  But it really comes down to snitching.  And I just want to throw it out there that every time there’s a prison revolt, the first people who get killed are the snitches.

MT: Absolutely.

CH: In any prison, anywhere in the world.  Soldier needs and writes about it with some joy.  But that really--I mean, so many of the students that I teach in the prison are in there because of somebody who snitched or somebody who is working as a police informant.  And a lot of these people have issues of their own with law enforcement, including drug issues, one of the favorite things is picking up drug addicts and saying, “You want to go to the county and be dope sick for a week or you want to help us out?”  But talk about that because it is an important point, so it’s electronic surveillance including monitoring social media, which a lot of people don’t know.  Especially if you come out of a prison there, Department of Corrections have whole units waiting for you to put up something stupid of Facebook.  We were just talking about Hunter Biden before, waiting for you to post something so that they can just come get you.  But I want to talk about snitching because that has become really the pillar, in many ways, of law enforcement.  Because I think it is a correct assessment that they do very little, actual investigations into crime as poor people in these neighborhoods will tell you, they don’t actually investigate the real crime.

MT: Right.  So the old-school method of, like, pounding the pavement, walking a beat, getting sources, you know, you--there’s always somebody you can talk to when something bad happens.  You know, that method’s kind of out the door.  And again, this character, this Huey character, he has--he has tremendous contempt for police because it’s exactly, as you say, without the technology and without snitches, they don’t really have anything.  They just use this brute force method of doing the job which is, “Let’s listen to everything and watching everything that we can electronically.”  And then let’s pick up everybody that we can pick up for whatever, and lean on them to give up everybody that they can.  As you mentioned, you know, in the drug game, there’s an easy way to get information out of people, just throw them in the hole and wait for them to get sick.  And then, you know, you’re going to get everybody from that person pretty quick.  So that’s a major factor with this character, and you see actually, it’s very interesting because he has a whole network of people that he deals with.  They’re all different in their--in their--in different ways.  But they’re liabilities theoretically.  And he has an eye out for all of them, like, which one of these people might end up giving me up?  And he does actually have somebody who, you know, who ends up sort of betraying him, a relative in the end.  And, you know, it’s--well, there’s a couple of people who end up betraying him, and it’s not simple, it’s not an easy thing to keep a watch for this, because people can get in trouble for anything in this country.  And that’s what a lot of people don’t understand about policing, which is they can come up with a pretext for arresting you for almost anything and using those pretexts, they can then lean on that person to get all kinds of stuff.

CH: All right.  Let’s draw the racial divide because that’s true if you’re poor and black, it’s not true in Princeton or Short Hills where you get really good drugs.  I mean, the use of drugs at--you know, in quantities and quality dwarfs anything in the inner city, but I think that’s where you see the kind of racial divide.  Nobody--these police are not knocking down the doors of Princeton University dorm rooms at 2:00 in the morning with long barreled weapons and Kevlar--wearing Kevlar vests for a non-violent drug warrant or--because there are drugs.  These--this activity takes place only in certain locations.  And I think one of the beauties of the book is that he’s--as a young man, is travelling, his mother lives in a poor neighborhood, he’s travelling between and watching exactly how drug laws work in the United States.

MT: Yeah, it’s amazing.  One of the funniest scenes in the book for me is there’s a scene where he’s hanging out with a bunch of white kids in the--in the rich neighborhood, and I forget what it was that they had just sold, but, you know, one of the kids just grabs it and throws it in his mouth without even thinking about it.  And he has this comment that, like, you know, white kids are amazing, they just--you know, the--they’ll eat--they take drugs, man, like, they’ll swallow anything without a thought.  And he’s sort of impressed by, you know, the sheer depravity of their drug habits, which is like sort of different from what he’s encountering in the other neighborhood where mostly people are either addicted or whatever it is, right?  But no, none of those kids ever get in trouble.  And it’s a--it’s a very, very different kind of a thing.  And this is one of the reasons why he has a key rule in the book, which is always stay behind the white guy.  He--throughout his life, has white partners who always end up being kind of the front man for his operation.  And this is one of the things that keeps him out of trouble always.

CH: All right.  Let’s talk about the caravans since we’re talking about…

MT: That’s great.

CH: That was kind of hilarious.  He puts up--he puts up the kind of raddiest guy with the longest treads.  And I’ll let you explain it.  Go ahead.

MT: Yeah, yeah, so he has a whole system for--how do you--how do you drive a shipment across the country?  It’s four cars, I won’t go into all of it, but what the--but the basic principle is there’s a car in the back that’s kind of watching everything.  The first car is--basically what they’re doing is they’re trying to get the person who is the biggest cop magnet they can find.  You know, somebody with long dreads, the car itself has to look bad, you know, he has to look like a caricature of a drug--a drug-dealing person or a criminal.  And what they want is they want the police to pull that car over, and they will, because that’s what cops do, right?  The do--Driving While Black thing is a real thing.  But the real--the drugs will be in the third car.  They’ll be in the trunk of the third car somewhere.  And the whole idea is to use, again, this sort of racism as a decoy, and, you know, he shows examples of how this--how this works a couple of times in the book.  Mostly it goes right, a couple of times it goes wrong because people don’t follow the rules.  But it’s, you know, it’s a very effective strategy.

CH: Always rental cars, always, you know, try and rent a car of the plates of the state that you’re in.  I heard that in a prison.  They also would drive up from Delaware, that’s where they would go down to get their guns.  But they would--they would do a big loop and always come in through Philly because the police were at the border between Delaware and…

MT: Oh, interesting.

CH: Yeah.  But I shouldn’t expose that, I suppose.  “In this business, you never touch a gun if you don’t have to.  Never have one around, never show one to a girlfriend, never take one to a range or to the woods to fire off a few rounds.  It’s too much power.  It’ll lead you to use it somehow.  You’ll show off, try to intimidate someone, or settle a score.  Guns create problems.”  That’s very true.  It echoes everything that I heard.  They always had a gun within reach, but they never had a gun on them.  That was--and you can explain that.

MT: Yes, so he has a rule.  His rule is no guns, but keep shooters.  So, you know, he talks a lot about this sort of destructive influence of a gun in your personal life and your professional decision-making as a drug dealer.  But just like--just having one will lead you to make bad decisions.  And that this--you know, he describes in a scene which I think is really interesting early in his life when they had--they go to do an armed robbery in the middle of New Jersey which goes terribly wrong.  But, no.  But you have to have people in your orbit who do have guns because that’s the--ultimately, that’s the court system in this world, right?  There’s no, you know, arbitration court.  He can’t settle a dispute that way.  And, you know, a couple of times--he never ends up having to actually go there, but you have to have some people who are serious and who can inspire fear in people in order to make the whole thing work, once you get to a certain level.

CH: Well, that’s how the--any illegal economy works.  You have to have the enforcer because you can’t go to the police.  There’s a moment in the book where he’s buying a lot of weed from a guy named Kermit, is that right?  In Vancouver or off an island of an--in the Vietnamese mafia, he takes stuff on credit, he gets lost, and he just won’t go back.  He’s terrified to go back to Canada.  You know, the illegal economy…

MT: Hasn’t been back, actually.

CH: Hasn’t been back.  That’s probably a good idea.  He’s--I love the portrait of Kermit, by the way in the Vietnamese mafia.  It was really chilling.  And it was a guy like five feet tall or something?

MT: Right, exactly.  Yeah.

CH: But yes, they’re--that--and in any society that breaks down, I think you were in that transition from the Soviet Union in the years--the illegal economy flourishes with all of these rules because it does have its own code, which can be quiet, you know, quite dangerous or quite costly especially as you flourish within that illegal economy.  He writes, “I try to learn something from every experience but prison is designed to be an experience from which one learns nothing.  The most you can accomplish is to keep your humanity from going backwards and you have to fight hard to achieve that.”

MT: I think you’d agree with that, probably.  Yeah.

CH: He’s terrified of prison.  He’s terrified of going to prison.

MT: So he got--he got picked up on an--on a charge that didn’t have to do with his drug dealing early in his life.  So he did spend a little time inside.  It just didn’t have to do with his drug business.  So he did have that experience.  It did not--he was not the kind of person that did well in jail.  And it was Tallahassee, Florida.  And, you know, it was--it was experience that, you know, that kind of shaped his thinking going forward.  He was very young at the time.  And what’s interesting about this story is that he sees all that in the underground world, in the drug dealing world, but he also sees it, you know, drug dealing world starts trying to go straight when for instance marijuana gets legalized in California.  For him, you know, lobbying the state government in California to make sure a law allows him to deal is no different at all from giving a gift of, you know, a certain amount of cash to the reigning drug dealer in the area so that you--he allows you to operate on his territory.  It’s exactly the same thing and I think he correctly pegs that as just an outgrowth of the same kind of instincts that you would see in basically the unregulated capitalism of drug dealing.

CH: Well, we’ll just close by saying that he’s like a small business being pushed out by the big Sackler Farms as weed becomes legal.  That’s a part of the book in the end, he realizes that that he wasn’t that small, but compared to these big corporate entities, he can’t compete anymore because they buy up the weed growing farms and everything else and impose the rules.  We have to stop there.  That was author and journalist Matt Taibbi on his new book, “The Business Secrets of Drug Dealing.”

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