Taibbi is wrong on plenty of stuff but he has done an excellent job of covering the bailouts and how the big banks and the government have merged. His most recent piece, Secrets and Lies of the Bailout, is required reading for anyone who wants to understand what has happened to our banking system.
In the attached video Taibbi talks with the folks at MSNBC, and they seem actually surprised that things are as bad as they are. You can almost see the thoughts floating across their frontal cortex’. “This stuff all happened under Obama. But that doesn’t make sense! Government helped make the big banks even richer, a lot richer? That doesn’t make sense. Matt Taibbi must work for the Daily Caller or something. No, he works for Rolling Stone. That doesn’t make sense. This doesn’t fit at all with the talking points issued this week!”
One thing, which I wish Taibbi had emphasized more is that it looks increasingly like credit would not have “seized up” across the board, for very long anyway had the big banks been allowed to fail. The mid-sized banks and the community banks, which lacked exposure to much in the way of toxic assets (because they sold them off to the big banks which then folded them into Mortgage Backed Securities) would have survived. It would have been bumpy but well run banks just outside of big bank status, BB&T for instance, would have filled in the space.
The bailout was, as David Stockman says, a Wall Street crisis. The bankers all freaked out when their bets turned terrible, and then played the information leverage game with Washington to get the tax payers to pay for their mistakes. They basically said that the entire economy was going down (it wasn’t) and therefore an unprecedented abandonment of what was left of our market based economy was justified. It was a giant con.