Taibbi and Prins: Occupying Wall Street Before it Was Cool?

Tuesday, October 18, 2011

Wall Street charging bull (puzzlemepuzzle/flickr)

Welcome to Politics Bites, where every afternoon at It's A Free Country, we bring you the unmissable quotes from the morning's political conversations on WNYC. Today on the Brian Lehrer Show, senior fellow at Demos, former investment banker, and author of the new novel Black Tuesday, Nomi Prins joined Matt Taibbi, contributing editor for Rolling Stone and author of Griftopia: A Story of Bankers, Politicians, and the Most Audacious Power Grab in American History, in a conversation about past economic crashes and the current protests.

True crime and 1929

Matt Taibbi has noticed some similarities between basic theft and the way major financial institutions operated leading up to the 2008 financial crisis. That's why he dubs his exposé Griftopia a "true crime" account, one that should perhaps share a shelf with In Cold Blood and Helter Skelter

Crime, theft—was that really the business of lending institutions? Nomi Prins agreed with Taibbi: If you're going by the dictionary definition of "theft", that's what banks were doing, complete with motive, undue influence on the rules of the game, and an ultimate prerogative to pillage. Prins said it was identical to what was going on in the lead-up to the Great Depression.

[Banks are] continuing to overvalue awful assets that they created into the 2008 beginning of the current crash we have, and they're being given a free pass by the Federal Reserve, the government, and everything else, which is exactly what happened in 1929.

Mortgage securities: The "lemons" of the banking industry

How that's "theft" is still difficult for most people to accept or understand. One caller requested a more simple way to explain to his parents just what the banks did wrong, one that avoided the complicated jargon of securities and mortgage bundling, and got at the heart of why their practices constituted criminal actions. (Chalk it up to early prep work for the Thanksgiving table political argument.)

Nomi Prins told the caller to think of the banks as car dealers who built cars out of defective parts, waxed them, and sold them to customers with the admonishment not to look under the hood. That's what happened with bad mortgages made to people who probably weren't going to be able to pay them back; those defective parts were bundled together and made to look a lot more attractive to investors than they really were.

Matt Taibbi explained:

[Banks] were giving mortgages to anyone with a pulse because they knew they weren't going to hold those loans. They were going to put them into securities, bully rating agencies into giving them triple A ratings, then they were going to sell them off to trade unions in Holland or the pension fund of California as triple A rated securities.

But they were lemons, to continue the car analogy. A big reason banks were able to sell these securities, Taibbi said, was that they purposely excluded vital information about mortgage holders from investors.

[Banks] would only include in the prospectuses things like useless information: What state the application took place in, how old the people were. Whether or not person had a job, whether or not they were a citizen, their proof of employment—all these things were intentionally concealed from future investors in these securities...That's not just fancy economics, that's outright thievery and crime.

Sympathy for the occupied?

The conversation inevitably turned to the Occupy Wall Street protests; Brian Lehrer observed that Prins and Taibbi had been "occupying Wall Street before it was cool".

Lehrer asked if it was paradoxical for protesters to demand a healthier economy while at the same time hoping to topple the nation's largest financial institutions. Matt Taibbi said it wasn't paradoxical at all; that was evidenced by those who actually work on Wall Street but still want to see the biggest banks busted. According to Taibbi, such people do exist.

Occupy Wall Street has a lot of sympathizers on Wall Street who want to end corruption because they think it will increase their wealth. They want to get this commingling of government and Wall Street ended, and they want to break up the too-big-to-fail banks because they think it will help the economy.


More in:

Comments [24]

The Outlier from Earth

What is the demand? Nothing short of DEMOCRACY.
What is the action? Building a society that values each human being through an exemplar community that puts a premium on DEMOCRACY.
What is the Problem? The crony capitalism of Wall Street is corrupting the democracy of the United States of America.
The demand is reasonable. The complaint is valid, and the methodology is peaceful.

Oct. 18 2011 07:33 PM

@Edward from NJ

Genuine note taken.

BL still missed the early opportunity and continues to be dismissive beyond being a rounded interviewer... IMHO.


Oct. 18 2011 11:27 AM

I want to respond to the refrain
"the protesters have no clear purpose".

They are representing a mass situation -- by definition a distinct demand or issue makes no sense here.

I think their purpose is to keep the occupation in place.
That's the other refrain: "they aren't well organized". They are still there, I think that shows genius organizing skills and strengths.

Oct. 18 2011 11:21 AM
Edward from NJ


WNYC has been covering this story in earnest for 3 weeks. That's one week after it began. When it began, it was entirely unclear whether or not it would just fizzle out. This one week lag time is becoming increasingly irrelevant. Will you still be complaining about it if it's still going on in a month? Six months?

Feel free to complain about the tone. Personally, I think the tone is reflective of the guests. When you've got two guests who are strong advocates, it's good for the host to be on the skeptical side.

Regarding yesterday: just ignore Gary! Engaging with him never ends well. I've gotten into it with him in the past, and it's simply not worth it.

Oct. 18 2011 11:15 AM

John A-

I actually posted an apology for the hyperbole that got the psychotic, paranoid Zionists all fired-up when they tried to hijack the OWS discussion, yesterday.

I agreed with them; if nuts show-up espousing hate, OWS should denounce them immediately. Zero tolerance for this crap.

Oct. 18 2011 11:10 AM

John A -

For what...?

I might agree.

Oct. 18 2011 10:58 AM

The problem may be that the established left is probably the most threatened by the OWS movement. They have been the neutered status quo, completely asleep at the wheel for decades.

They have aided and abetted the current debacle by not forcing the the hard questions.

OWS is not playing by the usual "rules".

Oct. 18 2011 10:57 AM
John A.

dboy, You should've been blocked yesterday. Sorry for my humorlessness on this.

Oct. 18 2011 10:52 AM
Andrea from NY

It's not the OWS movement that lacks focus. It is the decades of corporate fraud that is diffused and all emcopassing.

Oct. 18 2011 10:50 AM

@John A.

hyperbole |hīˈpərbəlē|
exaggerated statements or claims not meant to be taken literally.

Oct. 18 2011 10:48 AM
The Truth from Becky

That is 100% untrue statement about the Compliance Departments!

Oct. 18 2011 10:48 AM
George from Westchester

Being all these securities were sold throughout the world how is it that the big entities (banks) haven't been sued by foreign interests (govts. etc...)? Especially in light of the fact that many of the actions were illegal.

Oct. 18 2011 10:47 AM

It is odd that Brian ignored the movement for so long and is now snarky and dismissive of it now that he's "forced" to cover it because it's too big to ignore.

The funny thing is it's a typical WNYC, Brian Leher Show topic - timely, local, political etc..

Why the resistance??

Oct. 18 2011 10:46 AM
Susan from nyc

I am in total agreement with OWS--they understand the utter corruption and moral bankruptcy of the system as constituted. What is needed to begin with is the following:

1. Eliminate ALL deductions (that means mortgage, charity, child, state and local tax, business loopholes, etc.) If Congress really thinks something is worth supporting, they will have to appropriate funds for it openly and defend the decision. After all, every deduction someone gets means everyone else pays more, since government must still be funded.
2. Institute a single, progressive income tax that covers ALL income--there is no reason to tax income one does not work for (i.e., capital gains) at a lower rate than income one puts in time and effort to earn. Set these rates to actually cover our obligations. Now that the Supreme Court has recognized corporations as persons with equal free speech rights, tax them at the same rates as persons.
3. Disallow any political contributions from non-constituents--representative government can only function if those in office actually represent those who elected them rather than those with deep pockets. Set representative pay and privileges at the mean for their constituents.

The current system breeds distrust and contempt, as our purported representatives ignore their constituents in favor of their corporate paymasters, obscuring their bought-and-paid-for favors with endless, incomprehensible layers of taxes and deductions. If the Democrats and Republicans can't (or won't) act in our interest, we will vote for a third party, one with a moral compass.

Oct. 18 2011 10:45 AM
Jayr from queens

Is there any empathy from the tea party towards the occupy wall street movement?

Oct. 18 2011 10:44 AM
Edward from NJ

Reinstating Glass-Steagall-style separations would be great for the people who work on Wall Street. It would be the equivalent of a jobs bill for the financial industry -- less consolidation means more jobs. It would be less good for the few traders who rely on the huge leverage that massive institutions allow, and the top executives who would preside over much smaller companies. Could the guests discuss this?

Oct. 18 2011 10:44 AM
John from NYC

The former PBS NOW show had reporting on the role of the Rating Agencies in this financial crisis

Oct. 18 2011 10:44 AM
John A.

"He didn't start covering OWL until about a week ago."
Try three weeks. Its right in the logs online.

Oct. 18 2011 10:43 AM

... Tim Geithner, Larry Summers et. al, too!!

Oct. 18 2011 10:41 AM

Susan from nyc -

Good question!!

Oct. 18 2011 10:40 AM

dboy is correct. This has not been Brian's best moment. He can't seem to handle something that doesn't have a list of demands, but I'm sure he knows that as soon as OWS lists anything, it'll give detractors something to shoot down, but maybe that's what he wants. I'd say that Brian needs a vacation, but I think he just got back from one. Maybe the whole show needs a shake up. It's unfortunate.

Oct. 18 2011 10:39 AM
Susan from nyc

Why isn't Lloyd Blankfein in prison, along with his entire cohort?

Oct. 18 2011 10:38 AM

jim Rogers -

Brian has been consistently dismissive of OWS since it's inception. He didn't start covering OWL until about a week ago. Just after Korporate Media™ "discovered" it.

Oct. 18 2011 10:36 AM
jim Rogers

Brian: You're the best BUT please stop tagging your next story as the "writers who occupied wall street before it was fashionable" It just belittles everybody (not your intention!) by making the current speaking out seem like a fad or something cool rather than it being something of substance; or that the writers were courageous and doing what they did on principle and the people in the park are just fashionistas.

Oct. 18 2011 10:25 AM

Leave a Comment

Email addresses are required but never displayed.

Get the WNYC Morning Brief in your inbox.
We'll send you our top 5 stories every day, plus breaking news and weather.


About It's A Free Country ®

Archive of It's A Free Country articles and posts. Visit the It's A Free Country Home Page for lots more.

Supported by

WNYC is supported by the Charles H. Revson Foundation: Because a great city needs an informed and engaged public.  Learn more at


Supported by