The object of this diary is to raise awareness of a really useful book that can help the general public understand the pronounced state of inequality in the US The book is Predator Nation, by Charles H Ferguson, subtitled Corporate Criminals, Political Corruption, and the Hijacking of America. It came out in 2012 under the Crown Business imprint at Random House.
As a finance major well out of grad school, I've read more than my fair share of books about the finance industry and the economy. What strikes me as special about this book is that it has a very broad sweep, an excellent grasp of the key issues, and it is presented in such a way that one feels that one is looking at a very sharp X-ray of the financial system. Some people may know Ferguson from a movie, Inside Job, which the book jacket notes describe as a documentary about the financial crisis. He's written other books; I've only read this one. The one observation I'll make before the fold is: organizers should read this.
One of the difficulties any reviewer has is to walk the line between telling too much or too little about the book at hand The theme of the book is not inequality per se. But so much of the book is an organized look at the way that corporations--especially large banks, financial companies, and their legal and lobbying associates--set about tilting the system so much in their own favor that one can not help to reach the conclusion (on their own) that the nation is actually still in the process of having the system re-engineered away from being a democratic society.
That implies that there still may be some time to change things, and we'll get to that in a later paragraph.
For now, let's take a quick overview of some of the major financial events of the past few decades, as a reminder for the observations that deserve some mention:
* 1970's The oil crisis and very high inflation at the end of the decade;
* 1980' The stock market crash of 1987, and Japan's economic bubble in 1989;
* 1990's The Dot.com boom, hedge fund expansion in 1998, and 1999 the dismemberment of the Glass-Steagall Act, which had put a "Chinese Wall" between bank lending and stock trading operations. (I personally know workers who took a bath when their bank shares plunged at retirement plans at banks where they had once worked.) The book recalls the role of Larry Summers in ending Glass-Steagall, which we will come back to later.
* 2000's easy credit, until the 2007-2008 subprime mortgage mess led to large collapses.
Ferguson looks at these events, in turn. It is worth noting how he of goes about it. This book does not purport to be an inside view of finance, of the page-turning novelistic yet still journalistic techniques of Liar's Poker, which was about the heyday of junk bonds. Ferguson's book jacket bio says he's a Ph.D. in political science from MIT, whose main interest is in technology policy. But it is not dull, policy-wonk stuff. Ferguson talks about events that anyone alive at the time experienced, and if they were too young, probably heard enough about it from their relatives and classes to be familiar with the broad outlines of the events. The language is plain and direct, but as you progress through the decades, one has to admire just how hard, and how often, Ferguson hits the nail on the head as to what the core issues are. There is a Euclidian conciseness about this approach. He is conversational, but this is a serious conversation, and, just as if you were a colleague who has traveled a long distance to be there for the conversation, Ferguson respects your time, and is intent on not wasting it.
There are pros and cons to every book. Of necessity, no one author can go into detail about every financial crisis, and some will say that he left out this or that development, or they will disagree with his interpretation My point is that his presentation is very much worth listening to. Anyone who is an organizer in political life will find much to take away from this book, and in fact one hopes that people read this for Netroots Nation, Wellstone Action, and similar organizing groups. There is much of substance that undercuts the Trickle-Down Economics heresy that has acted as a tapeworm on the political system.
My own list of highlights from the book, without stealing the author's thunder, are as follows:
* Undoing some of the worst parts of Deregulation remains a key political issue in reducing inequality in the country. Eg:
The structural concentration of the finance industry has consolidated into sharp oligopolies. ( p.40)
Recently, The blocking of deregulator Larry Summers to the Fed may mark a hopeful step towards restoring the firewalls of the Glass-Steagall Act. And to curing the Alzheimer's -like ignoring of the painful lessons of the maybe still Great Depression.
* The brokerage firm Charles Schwab did a real service to the country by no-nonsense, due-diligence research into the real risks of many mortgage-backed securities during the sub-prime loan mess (p. 85) And no, I do not have an account or shares in Schwab; but credit is due to those that earned it by hard work.
* Finally, there are several cases where Ferguson shows the increasingly large, and in fact, astonishing power that large financial firms have in very rapidly destroying pension funds (p. 98). The book doesn't go into the Detroit-style bankruptcy, as of course it happened after the book was written, but the book cites enough models where you can see that this is the logical consequence of certain financial business structures.
Ferguson doesn't say it outright, but one can see from the increasing size of the deals gone bad, and the increasing ill effects, not just locally, but now worldwide, that what is increasing is the amplitude of the ill effects. The financial wizards behind Long Term Capital Mnagement (LTCM) almost brought the market down when their bets got too big, and in effect created a very large "butterfly effect" in the financial system. Yet consolidation, rule-bending, and predatory behavior not only increased, but became bolder and in some cases shameless. Inequality has reached such proportions that it is emerging as a high listed topic on the political agenda. Witness Bill DeBlasio's "Tale of Two Cities" campaign for mayor of New York City and news reports critical of ex-NYC mayor Michael Bloomberg visiting homes wrecked by Hurricane Sandy while the billionaire mayor was wearing expensive alligator shoes.
Nationally, the billionaire Koch brothers have their own ultraconservative political agenda, and people fear that part of that pro-oligarch agenda is to take away Social Security. Let us hope that we have not forgotten the lessons of the Great Depression, and that we don't lose, by apathy, or inaction, the economic and political progress championed by FDR. So, 99 percenters, I do recommend that you read this book, and use material from it to advantage in the next round of elections. A good one for the book shelf, not just a quick read from the library. Highly recommended.
Readers & Book Lovers Series Schedule:
|DAY||TIME (EST/EDT)||Series Name||Editor(s)|
|SUN||6:00 PM||Young Reader's Pavilion||The Book Bear|
|2:00 PM||What's on Your E-Reader?||Caedy|
|2:00 PM||Bibliophile's Wish List||Caedy|
|4:00 PM||Political Books||Susan from 29|
|Sun||9:30 PM||SciFi/Fantasy Book Club||quarkstomper|
|Bi-Monthly Sun||Midnight||Reading Ramblings||don mikulecky|
|MON||8:00 PM||Monday Murder Mystery||michelewln, Susan from 29|
|Mon||11:00 PM||My Favorite Books/Authors||edrie, MichiganChet|
|TUES||5:00 PM||Indigo Kalliope: Poems from the Left||bigjacbigjacbigjac|
|alternate Tuesdays||8:00 AM||LGBT Literature||Texdude50, Dave in Northridge|
|alternate Tuesdays||8:00 AM||All Things Bookstore||Dave in Northridge|
|Tue||8:00 PM||Contemporary Fiction Views||bookgirl|
|Wed||2:00 PM||e-books||Susan from 29|
|Wed||8:00 PM||Bookflurries Bookchat||cfk|
|THU||8:00 PM||Write On!||SensibleShoes|
|Thu (first each month)||11:00 AM||Monthly Bookpost||AdmiralNaismith|
|alternate Thursdays (on hiatus)||11:00 PM||Audiobooks Club||SoCaliana|
|FRI||8:00 AM||Books That Changed My Life||Diana in NoVa|
|alternate Fridays||8:00 PM||Books Go Boom!||Brecht|
|Fri||10:00 PM||Slightly Foxed -- But Still Desirable||shortfinals|
|SAT (fourth each month)||11:00 AM||Windy City Bookworm||Chitown Kev|
|Sat||12:00 PM||You Can't Read That! Paul's Book Reviews||pwoodford|
|Sat||9:00 PM||Books So Bad They're Good||Ellid|