The Divide: American Injustice in the Age of the Wealth Gap
This is a work of nonfiction. Some names and identifying details have been changed.
Copyright © 2014 by Matt Taibbi
Illustrations copyright © 2014 by Molly Crabapple
All rights reserved.
Published in the United States by Spiegel & Grau, an imprint of Random House, a division of Random House LLC, a Penguin Random House Company, New York.
SPIEGEL & GRAU and the HOUSE colophon are registered trademarks of Random House LLC.
Library of Congress Cataloging-in-Publication Data
Taibbi, Matt.
The divide : American injustice in the age of the wealth gap / Matt Taibbi.
pages cm
ISBN 978-0-8129-9342-4
eBook ISBN 978-0-679-64546-7
1. Social justice—United States. 2. Income distribution—United States. 3. Rich
people—United States. 4. Poor—United States. I. Title.
HM671.T35 2014
303.3′72—dc23
2013024907
www.spiegelandgrau.com
Jacket art direction: Greg Mollica
Jacket illustration: Molly Crabapple
Jacket design: Thomas Ng
v3.1
For Max
Cover
Title Page
Copyright
Dedication
Epigraph
INTRODUCTION
CHAPTER 1.
UNINTENDED CONSEQUENCES
CHAPTER 2.
FRISK AND STOP
CHAPTER 3.
THE MAN WHO COULDN’T STAND UP
CHAPTER 4.
THE GREATEST BANK ROBBERY YOU NEVER HEARD OF
CHAPTER 5.
BORDER TROUBLE, PART 1
CHAPTER 6.
BORDER TROUBLE, PART 2
CHAPTER 7.
LITTLE FRAUDS
CHAPTER 8.
BIG FRAUDS
CHAPTER 9.
COLLATERAL CONSEQUENCES
ACKNOWLEDGMENTS
About the Author
Other Books by This Author
Fairness is what justice really is.
—Potter Stewart
Over the course of the last twenty years or so, America has been falling deeper and deeper into a bizarre statistical mystery.
Take in the following three pieces of information, and see if you can make them fit together.
First, violent crime has been dropping precipitously for nearly two decades. At its peak in 1991, according to FBI data, there were 758 violent crimes per 100,000 people. By 2010 that number had plunged to 425 crimes per 100,000, a drop of more than 44 percent.
The decrease covered all varieties of serious crime, from murder to assault to rape to armed robbery. The graphs depicting the decline show a long, steady downswing, one that doesn’t jump from year to year but consistently slumps from year to year.
Second: although poverty rates largely declined during the 1990s, offering at least one possible explanation for the drop in violent crime, poverty rates rose sharply during the 2000s. At the start of that decade, poverty levels hovered just above 10 percent. By 2008 they were up to 13.2 percent. By 2009 the number was 14.3 percent. By 2010, 15.3 percent.
All this squares with what most people who lived in Middle America knew, and know, instinctively. Despite what we’re being told about a post-2008 recovery, despite what the rising stock market seems to indicate, the economy is mostly worse, real incomes are mostly declining, and money is mostly scarcer.
But throughout all this time, violent crime has gone down. It continues to decline today. Counterintuitively, more poverty has not created more crime.
The third piece of information that makes no sense is that during this same period of time, the prison population in America has exploded. In 1991 there were about one million Americans behind bars. By 2012 the number was over 2.2 million, a more than 100 percent increase.
Our prison population, in fact, is now the biggest in the history of human civilization. There are more people in the United States either on parole or in jail today (around 6 million total) than there ever were at any time in Stalin’s gulags. For what it’s worth, there are also more black men in jail right now than there were in slavery at its peak.
See if this syllogism works, then.
Poverty goes up;
Crime goes down;
Prison population doubles.
It doesn’t fit, unless some sort of alternative explanation comes into play. Maybe all those new nonviolent prisoners fit into some new national policy imperative. Maybe they all broke some new set of unwritten societal rules. But what?
While on a visit to San Diego to do research for this book, I heard a crazy story.
The subject was the city’s P100 program, under which anyone who applied for welfare could have his or her home searched preemptively by the state. Ostensibly, authorities were looking for evidence that the applicant had a secret job or a boyfriend who could pay bills, or was just generally lying about something in order to cheat the taxpayer out of that miserable few hundred bucks a month.
One Vietnamese woman, a refugee and a rape victim who had only recently come to America, applied for welfare in San Diego. An inspector came to her door, barged in, and began rifling through her belongings. At one point, he reached into her underwear drawer and began sifting around. Sneering, he used the tip of the pencil eraser to pull out a pair of sexy panties and looked at her accusingly. If she didn’t have a boyfriend, what did she need these for?
That image, of a welfare inspector sneeringly holding up panties with a pencil end, expresses all sorts of things at once. The main thing is contempt. The implication is that someone broke enough to ask the taxpayer for a handout shouldn’t have sex, much less sexy panties.
The other thing here is an idea that being that poor means you should naturally give up any ideas you might have about privacy or dignity. The welfare applicant is less of a person for being financially dependent (and a generally unwelcome immigrant from a poor country to boot), so she naturally has fewer rights.
No matter how offensive the image is, it has a weird logic that’s irresistible to many if not most Americans. Even if we don’t agree with it, we all get it.
And that’s the interesting part, the part where we all get it. More and more often, we all make silent calculations about who is entitled to what rights, and who is not. It’s not as simple as saying everyone is the same under the law anymore. We all know there’s another layer to it now.
As a very young man, I studied the Russian language in Leningrad, in the waning days of the Soviet empire. One of the first things I noticed about that dysfunctional wreck of a lunatic country was that it had two sets of laws, one written and one unwritten. The written laws were meaningless, unless you violated one of the unwritten laws, at which point they became all-important.
So, for instance, possessing dollars or any kind of hard currency was technically forbidden, yet I never met a Soviet citizen who didn’t have them. The state just happened to be very selective about enforcing its anticommerce laws. So the teenage farsovshik (black market trader) who sold rabbit hats in exchange for blue jeans outside my dorm could be arrested for having three dollars in his pocket, but a city official could openly walk down Nevsky Avenue with a brand-new Savile Row suit on his back, and nothing would happen.
Everyone understood this hypocrisy implicitly, almost at a cellular level, far beneath thought. For a Russian in Soviet times, navigating every moment of citizenship involved countless silent calculations of this type. But the instant people were permitted to think about all
this and question the unwritten rules out loud, it was like the whole country woke up from a dream, and the system fell apart in a matter of months. That happened before my eyes in 1990 and 1991, and I never forgot it.
Now I feel like I’m living that process in reverse, watching my own country fall into a delusion in the same way the Soviets once woke up from one. People are beginning to become disturbingly comfortable with a kind of official hypocrisy. Bizarrely, for instance, we’ve become numb to the idea that rights aren’t absolute but are enjoyed on a kind of sliding scale.
To be extreme about it, on the far end—like, say, in the villages of Pakistan or Afghanistan—we now view some people as having no rights at all. They can be assassinated or detained indefinitely outside any sort of legal framework, from the Geneva conventions on down.
Even here at home, that concept is growing. After the Boston marathon bombings, there was briefly a controversy where we wondered aloud whether the Chechen suspects would be read Miranda rights upon capture. No matter how angry you were about those bombings—and as a Boston native, I wanted whoever was responsible thrown in the deepest hole we have—it was a fascinating moment in our history. It was the first time when we actually weren’t sure if an American criminal suspect would get full access to due process of law. Even on television, the blow-dried talking heads didn’t know the answer. We had to think about it.
Of course, on the other end of the spectrum are the titans of business, the top executives at companies like Goldman and Chase and GlaxoSmithKline, men and women who essentially as a matter of policy now will never see the inside of a courtroom, almost no matter what crimes they may have committed in the course of their business. This is obviously an outrage, and the few Americans who paid close attention to news stories like the deferred prosecution of HSBC for laundering drug money, or the nonprosecution of the Swiss bank UBS for fixing interest rates, were beside themselves with anger over the unfairness of it all.
But the truly dark thing about those stories is that somewhere far beneath the intellect, on a gut level, those who were paying attention understood why those stories panned out the way they did. Just as we very quickly learned to accept the idea that America now tortures and assassinates certain foreigners (and perhaps the odd American or three) as a matter of routine, and have stopped marching on Washington to protest the fact that these things are done in our names, we’ve also learned to accept the implicit idea that some people have simply more rights than others. Some people go to jail, and others just don’t. And we all get it.
I was originally attracted to this subject because, having spent years covering white-collar corruption for Rolling Stone, I was interested in the phenomenon of high-powered white-collar criminals completely avoiding individual punishment for what appeared to be very serious crimes. It’s become a cliché by now, but since 2008, no high-ranking executive from any financial institution has gone to jail, not one, for any of the systemic crimes that wiped out 40 percent of the world’s wealth. Even now, after JPMorgan Chase agreed to a settlement north of $13 billion for a variety of offenses and the financial press threw itself up in arms over the government’s supposedly aggressive new approach to regulating Wall Street, the basic principle held true: Nobody went to jail. Not one person.
Why was that? I quickly realized that it was impossible to answer that question without simultaneously looking at the question of who does go to jail in this country, and why. This was especially true when the numbers were so stark, zero-to-a-few on one hand, millions on the other.
Finding the answer to some of this turns out to be easy, just simple math. Big companies have big lawyers, most street criminals do not, and prosecutors dread waging long wars against bottomless-pocketed megabanks when they can score win after easy win against common drug dealers, car thieves, and the like. After winning enough of these blowout victories, the justice bureaucracy starts drifting inexorably toward the no-sweat ten-second convictions and away from the expensive years-long battles of courtroom attrition.
Unquestionably, however, something else is at work, something that cuts deeper into the American psyche. We have a profound hatred of the weak and the poor, and a corresponding groveling terror before the rich and successful, and we’re building a bureaucracy to match those feelings.
Buried in our hatred of the dependent, in Mitt Romney’s lambasting of the 47 percent, in the water carrier’s contempt for the water drinker, is a huge national psychological imperative. Many of our national controversies are on some level debates about just exactly how much we should put up with from the “nonproducing” citizenry. Even the George Zimmerman trial devolved into a kind of national discussion over whether Trayvon Martin was the kind of person who had the right to walk down the street unmolested, or whether he was a member of a nuisance class, a few pegs down on that sliding scale of rights, who should have submitted to … well, whatever it was that happened.
The weird thing is that the common justification for the discrepancy in prison statistics—the glaring percentage of incarcerated people who are either poor, nonwhite, or both—is that the ghetto denizens are the people who commit the crimes, that their neighborhoods are where the crime is at.
And the common justification for the failure to prosecute executives in corrupt corporations for any crimes that they might commit is that their offenses aren’t really crimes per se but mere ethical violations, morally unfortunate acts not punishable by law. President Obama himself would hint at this in an infamous 60 Minutes interview.
But in practice, as I would find out in a years-long journey through the American justice system, things turn out to be completely different.
Yes, there’s a lot of violent crime in poor neighborhoods. And yes, that’s where most of your gun violence happens.
But for most of the poor people who are being sent away, whether it’s for a day or for ten years, their prison lives begin when they’re jailed for the most minor offenses imaginable. Can you imagine spending a night in jail for possessing a pink Hi-Liter marker? For rolling a tobacco cigarette? How about for going to the corner store to buy ketchup without bringing an ID?
They are sent away because they do the same things rich people do at some time in their lives, usually as teenagers—get drunk and fall down, use drugs, take a leak in an alley, take a shortcut through someone’s yard, fall asleep in a subway car, scream at a boyfriend or girlfriend, hop a fence. Only when they do these things, they’re surrounded by a thousand police, watching their every move.
Meanwhile the supposedly minor violations that aren’t worth throwing bankers in jail for—they turn out to be not so minor. When an employee at the aforementioned British banking giant HSBC—whose executives were ultimately handed a no-jail settlement for the biggest money-laundering case in the history of banking—started looking into how people on terrorist or criminal watch lists opened accounts at his company, he found something odd. In many cases, commas or periods were being surreptitiously added to names, so that they would elude the bank’s computer screening systems.
“That’s something that could only have been done on purpose, by a bank employee,” he said.
What deserves a bigger punishment—someone with a college education who knowingly helps a gangster or a terrorist open a bank account? Or a high school dropout who falls asleep on the F train?
The new America says it’s the latter. It’s come around to that point of view at the end of a long evolutionary process, in which the rule of law has slowly been replaced by giant idiosyncratic bureaucracies that are designed to criminalize failure, poverty, and weakness on the one hand, and to immunize strength, wealth, and success on the other.
We still have real jury trials, honest judges, and free elections, all the superficial characteristics of a functional, free democracy. But underneath that surface is a florid and malevolent bureaucracy that mostly (not absolutely, but mostly) keeps the rich and the poor separate through thousands of tiny, scarcely visible inequities.
For instance, while the trials may be free and fair, unfair calculations are clearly involved in who gets indicted for crimes, and who does not. Or: Which defendant gets put in jail, and which one gets away with a fine? Which offender ends up with a criminal record, and which one gets to settle with the state without admitting wrongdoing? Which thief will pay restitution out of his own pocket, and which one will be allowed to have the company he works for pay the tab? Which neighborhoods have thousands of police roaming the streets, and which ones don’t have any at all?
This is where the new despotism is hidden, in these thousands of arbitrary decisions that surround our otherwise transparent system of real jury trials and carefully enumerated suspects’ rights. This vast extrademocratic mechanism, it turns out, is made up of injustices big and small, from sweeping national concepts like Eric Holder’s Collateral Consequences plan, granting situational leniency to “systemically important” companies, to smaller, more localized outrages like New York City prosecutors subverting speedy trial rules in order to extract guilty pleas from poor defendants who can’t make bail.
Most people understand this on some level, but they don’t really know how bad it has gotten, because they live entirely on one side of the equation. If you grew up well off, you probably don’t know how easy it is for poor people to end up in jail, often for the same dumb things you yourself did as a kid.
And if you’re broke and have limited experience in the world, you probably have no idea of the sheer scale of the awesome criminal capers that the powerful and politically connected can get away with, right under the noses of the rich-people police.