“The DIVIDE” by Matt Tabbi = American Injustice in the Age of the Wealth Gap.’

The Justice Gap = America’s unequal administration of justice to rich and poor

Wealth-Income disparities grow ever wider = Disparities by cops and prosecutors grow

“The Divide” = Unequal wealth = Unequal criminal justice.

POOR = “Poverty goes up; Crime goes down; Prison population doubles.”

Rule of law has been subverted by corporate greed and institutionalized abuse of poor.

44% Reduction in Violent Crimes in America over the past 20 Years = Prison population doubled = skewing heavily black and poor = Poverty itself has been criminalized.

Epidemic of white-collar crime in financial sector = civil settlements = NO EXECUTIVES IN PRISON

Growing TBTF worry = 1st enunciated by Deputy Attorney General Eric Holder in 1990‘s under Clinton = Any aggressive prosecution of big banks could Destabilize Economy.

Wall Street under Obama-Holder = Near-total immunity of White-Collar criminals

EVEN Bush Prosecuted FAR MORE WHITE-COLLAR CRIMINALS

Police behave “like commercial fishermen, throwing nets over whole city blocks.” Some of the fish get prosecuted or ticketed for ever-pettier offenses = typically black and poor.

Nobody throws a similar fishnet over Wall Street firms = Produce a MASSIVE criminal yield. = Wall Street fish have BIG megaphone + much better lawyers.

Justice system’s newer kinds of inequalities = Driven by technology = Computers encourage BANKS to operate with UNSTOPPABLE AUTOMATED FRAUD.


So long as VICTIMS are powerless there won’t be much of a legal or political reckoning

Personal attention and wielding power and control over your life = A luxury for the FEW

Grotesquely unequal application of American justice = Between the too-big-to-jail Wall Street elite and the too-poor-to-fight minority underclass.

“The cleaving of the country into two completely different states—one a small archipelago of hyperacquisitive untouchables, the other a vast ghetto of expendables with only theoretical rights….is a terrible story, and a crazy one.””

— Matt Taibbi

“If we’ve learned anything from the recent mortgage crisis it’s that at some point, these schemes will unravel and taxpayers could be left holding the bag.”

— Cyrus Vance Jr., NY County District Attorney 1st Bank prosecution since 2008 against a small Chinatown bank guilty of little more than not detecting early enough its non-deadbeat loan clients underreporting their incomes on mortgage applications.

“Everyone got what they wanted from the prosecution. The city got to say it was being tough on financial crime. The press got to run a thrilling picture of harsh justice. Mr. Vance got a line to add to his résumé. The only losers were the public, who had no idea that the real culprits for the financial crisis were being set free, while the bank on trial had nothing to do with the losses that had been suffered by almost every ordinary American in the crash.”

— Tabbi as 19 defendants chained together for their perp-walk through the courtroom

HOLDER = Prosecutorial doctrine that calls for weighing TBTF “collateral consequences” = “Prosecutors may take into account the possibly substantial consequences to a corporation’s officers, directors, employees, and shareholders.”

— HOLDER in 1999 Justice Department memo

Holder Expanded that in 2009 = BIG bankers are so important to US economy = TOO BIG TO JAIL (FAIL or SURVIVE) = hypothetical future prosecution = The touchstone becomes not the law but the impact on financial markets. = Holder lets managers of massive fraud off the hook.

Holder = Social-class loyalty and legal clubbiness have affected Holder and his criminal division chief, Lanny Breuer. Covington and Burling, the revolving-door Washington law firm where Holder and Breuer worked between stints in government, was the top corporate defense firm used by virtually all the banks involved in major fraud cases. This elitist fraternity makes a semantic and legal distinction, without a real difference, between what it sees as “breaking the law” (white-collar crime, meriting fines) and “committing a crime” (petty crime, requiring prosecution). “They just can’t see certain behavior as criminal.”

Holder lets Libor Price-Fixing + Derivatives Fraud + Automated FRONT RUNNING + Mortgage Fraud + ROBO-FRAUDCLOSURES = RUN WILD and un-prosecuted + Countrywide + $4 billion bank swindle in Barclays’s buyout of Lehman Brothers = Large banks and their Executives essentially immune from prosecutions.

Holder and Co. were cowardly reluctant to take on megabanks and their armies of lawyers for fear of losing and hurting their legal success record.

CONTRAST = Routine police and prosecutorial overreach against minority and immigrant populations = Routinely stopped, fined and marginalized with a relentlessness out of proportion compared to a dignified or free life. = welfare applicants subjected to intrusive, humiliating searches of their homes, investigators poking into their closets, their dresser drawers, their underwear = Jail terms for those who lie about a boyfriend still living at home + Jail for receiving more welfare benefit caused by State mistake.

MORAL HAZARD = Swindlers know Middle Class will Cover their Risky Crimes = Punishable by a small Percentage Fine = Big incentives to commit more crimes.

MORAL HAZARD = Lowest socioeconomic classes live in something akin to a police state = Great concerned for the moral health of our society. = Assistance claims are investigated at the mercy of officers who barge into their homes and pore over their toothbrushes and underwear.

NY Federal Reserve President William Dudley Speech chilled Wall Street saying he feared that the tax dodging, money laundering, mortgage fraud and trampling on homeowners by America’s big banks might reflect not just a few bad actors but ethical flaws deep in the fabric of Wall Street.

Holder (2010) said that “mortgage-fraud crimes have reached crisis proportions.” He did nothing = Holder’s department has made Wall Street crime its lowest priority closing 747 mortgage-fraud cases with little or no investigation.

Taibbi offers the searing indictment that America’s wealth gap has corrupted the nation’s system of justice, fostering a “legal schizophrenia” that harshly prosecutes the poor but practices selective leniency on Wall Street. After “the greatest crime wave in a generation,” the Obama administration’s failure to jail top bankers, Taibbi contends, shows that the United States now lives by a hypocritical double standard — “letting major systemic offenders walk, bypassing the opportunity for important symbolic prosecutions and instead . . . putting the smallest of small fry on the rack for negligible offenses.”

How can it be, he asks, that a street drifter serves 40 days in jail after cops find half a reefer in his pocket, but not a single executive of HSBC faces criminal charges after the bank “admitted to laundering billions of dollars for drug cartels in Mexico and Colombia, washing money for terrorist-connected organizations in the Middle East, allowing rogue states under formal sanctions by the U.S. government to move money freely by the tens of billions through its American subsidiary, [and] letting Russian mobsters wash money on a grand scale”?

Taibbi says “every day on Wall Street, money is stolen, embezzled, burgled, and robbed. But the mechanisms of these thefts are often so arcane and idiosyncratic that they don’t fit neatly into the criminal code, which is written for the dumb crimes committed by common stick-up artists and pickpockets.”

21 biggest mortgage-frauds = Companies paid $26 billion in Fines to GOV on $TRILLIONS IN DAMAGES + “not a single individual was charged in any of those cases. Not a single individual had to pay so much as a dime of his own money in damages. Not one home was searched.”

This Justice Divide is shocking and powerful = unethical and criminal behavior = A dystopia of making and bending the law to match the Financially Powerful.

“The rich have always gotten breaks and the poor have always had to swim upstream. The new truth is infinitely darker and more twisted….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.”

— Matt Taibbi

The last days of the USSR = Massive hypocrisy that people thought about and the “whole country woke up from a dream, and the system fell apart in a matter of months.”

DIVIDE = A sense “that the deal is rotten” = Americans have turned our backs on our ideals. = Rights are inalienable and inherent from birth “we’ve developed a high tolerance for conditional rights and conditional citizenship. And the one condition, it turns out, is money. If you have a lot of it, the legal road you get to travel is well lit and beautifully maintained. If you don’t, it’s a dark alley and most Americans would be shocked to find out what’s at the end of it.”

Two distinct, and separated, worlds = Wall Street financial crisis: “a Ponzi scheme” TBFF + TBTJail = Holder invented that Scam = Tarp + FED Reserves $20+ Trillion Bailouts = NOT victimless CRIMES = 100‘s of Millions of Americans Suffered losses.

Taibbi effectively indicts Bank executives = A cadre of Multinational insiders from Banks and Hedge Funds and Insurance

Taibbi finds on the other side = overlapping matrix of police initiatives, immigration laws and an “Obama-era initiative bearing the Bush-Orwellian catch-phrase ‘Secure Communities'” has made going to work or applying for assistance a source of persecution and anxiety. = Stories that will keep you up at night. = Worse is a growing legal framework by which the underclass is effectively criminalized. = It makes any HUMAN ANGRY.

“The Divide” is not just a report from the new America; it is advocacy journalism at its finest, an attempt to stir us up. “Just trying to do the right thing,” Taibbi writes,

“Low-class people do low-class things.” = reflexive dismissal of modest means

“Obstructing pedestrian traffic” on a sidewalk with zero traffic at 1:00 a.m. in Bedford-Stuyvesant = A 35-year-old black man is arrested after being similarly harassed by the cops countless times before. The man refuses to provide ID and accepts a summons, and is consequently brought into court for a $100 fine he cannot pay. The man refuses to pay the fine.

Only after repeated refusals to pay the fine does the judge ask the arresting officer whether he saw any other people on the sidewalk. ANSWER: NO! Then the judge sighs. “Not guilty.” Why are White people never arrested for obstructing pedestrian traffic? ANSWER: “Low-class people do low-class things.”

CONCEPT = Money can accomplish anything = Even Good things is SCARY!