Matt Taibbi Ignores Advice on Story About Why Wall Street Isn’t in Jail

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Matt Taibbi, the populist scribe who wrote Goldman Sachs a Forrest Gumpian role into every bubble since 1929, wasn't about to take writing advice from some former Senate investigator. Taibbi begins his latest anti–Wall Street screed for Rolling Stone, investigating how the Feds are doing more to protect bankers than prosecute them, with this concise anecdote from this Senate source:

"Everything's fucked up, and nobody goes to jail," he said. "That's your whole story right there. Hell, you don't even have to write the rest of it. Just write that."

I put down my notebook. "Just that?"

"That's right," he said, signaling to the waitress for the check. "Everything's fucked up, and nobody goes to jail. You can end the piece right there."

This is Taibbi we're talking about, so naturally he takes another 6,753 words before we get to the end, with plenty of time for excellence in the art of insultry along the way. Fabulous Fab Tourre? "Goldman's outrageous Euro-douche." AIG exec Joe Cassano? "The nebbishy Patient Zero of the financial crisis." Lehman Brothers? "A raging tsunami of misdeeds."

Taibbi starts with a simple premise: "Not a single executive who ran the companies that cooked up and cashed in on the phony financial boom — an industrywide scam that involved the mass sale of mismarked, fraudulent mortgage-backed securities — has ever been convicted." And then goes on to explain why paltry multimillion settlements, like the ones paid by Goldman Sachs and Citigroup, aren't enough of a deterrent for rich financiers. What might be a more apt punishment? How about the threat of anal rape:

"You put Lloyd Blankfein in pound-me-in-the-ass prison for one six-month term, and all this bullshit would stop, all over Wall Street," says a former congressional aide. "That's all it would take. Just once."

But the problem with Taibbi's argument isn't that he's attacking a bureaucratic system or industry unworthy of the public's ire. It's that in a piece about the Feds, the failure to prosecute and jail these Wall Street criminals, and the willingness to ignore mountains of evidence and the SEC's incestuousness with the firms they're supposed to oversee, he almost never mentions the laws regulating their financial misdeeds — whether they exist or were dismantled (ahem, Glass-Steagall), and the difficulty of getting a conviction off those charges, or whether they are jailable offenses. Why did the DOJ's "big swing" against Bear Sterns or the current charges against the Fabulous Fab fail? It seems like 7,000 words leaves ample room to address what happened when the Feds do try to prosecute.

Why Isn't Wall Street in Jail? [Rolling Stone]