In 2008 I was 18 years old and a senior in high school. During that year I was chasing girls, shaving for the first time, lifting weights, getting ready for college, and trying to endure my last bout of public education. Life was good and I had no idea what was going on in the world around me. Besides randy teenagers, most people were aware of the financial crisis that was taking place in 2008. This collapse in our economy was arguably the second worst financial disaster in United States history-second only to the Great Depression. In only a year, this financial crisis wiped out 40% of the WORLD’S wealth which equated to trillions of dollars of loss. Huge banks like Lehman Brothers imploded while lucky others like Bank of America and Chase were bailed out by the government. What caused the Great Recession? This question was explained to me in the amazing book, The Divide: American Injustice in the Age of the Wealth Gap by Matt Taibbi. Go read this book! This is one of the top 5 books I have ever read and honestly it has changed my perspective on the world. With that said, the book contrasts the Financial Crisis of 2008 with the current state of how the poor are treated in America. The juxtaposition of stories about the rich and poor classes is eyeopening in respect to the unfairness of the current judicial system. This blog post only scratches the surface of this books details, points, and moving anecdotes.
The 2008 Financial Crisis was first and foremost caused by illegal activity on Wall Street. Leading up to the crisis, major banks and lending agencies were addicted to subprime mortgages. A subprime mortgage is a home loan for individuals who have bad credit, have little to no down-payment, and limited knowledge of interest rates. The banks specifically targeted poor individuals to take on these high interest loans even though their financial history was dismal and their likelihood of paying the loan was extremely suspect. These loans were obviously a disaster waiting to happen but the real kicker is that the banks bundled these as secure AAA investments for other institutions (including the government) to invest in. This toxic combination lead to a housing market collapse and subsequent banking collapse because these institutions were leveraged based largely on the subprime mortgages. In the end, these fraudulent practices by America’s leading institutions destroyed countless pensions, wiped out retirement savings, and initiated the loss of hundreds of thousands of jobs over the next five years. What was the punishment for the people who caused this collapse? NONE! No single person was brought to trial or prosecuted. Banks were fined but none were forced to admit that they did anything wrong. Added to that, the banks’ fines amounted to such small amounts that they recouped their losses in a matter of weeks.
This total lack of justice for the ultra wealthy has become the norm in America. There is a ridiculous amount of evidence against bank executives which is not being pursued by the justice department. This is contrasted in the book by the ridiculous police methods being enforced on poor individuals. New York has search and seizure laws that essentially allow police to detain anyone (almost always blacks) for no reason at all. The nation as a whole has laws that don’t allow immigrants any due process of law and the right to hold these individuals indefinitely. Welfare recipients have forced home searches where officials can rummage through all their belongings to ensure they are actually poor enough to receive benefits. If you are an immigrant or poor, the American justice system looks much different then if you are a rich bank executive on Wall Street. Of course we all know this to some degree but the author’s point is that our country’s justice system has to be in a vacuum; treating rich and poor alike. We roll over and let the ultra-rich get away with crime while systematically imprisoning more people (mainly poor) then any other country in the world. This injustice needs to be addressed and we need to at least try to change the system for the better. Again, this book is a must read and goes into these topics in much greater detail. America is currently an oligarchy that is run by very wealthy individuals and institutions. Does this mean we should role over and take it? No. It means we need to be aware of the injustices of the system so we can slowly bring back the balance of equality. Success doesn’t come over night but the sum of small efforts overtime can make America a great place no matter how much is in your wallet, no matter where you live, and no matter what you look like in the mirror.