I’m just reading Meltdown: The End of the Age of Greed by Paul Mason
This book is an uncomfortable read for any politician.
Mr Mason argues that when the law governing debt to capital ratios was quietly changed in 1994by the Clinton administration, banks were given the opportunity to go into a money making frenzy. His account of the events that led up to the credit crisis last year is clear and simple using a language that that is accessible to a reader without an economics doctorate.
The author debunks the neoliberal ideology that underpinned the thinking behind American deregulation and believes that we are seeing the end of an era. For him, the future business model for banks should favour “low-profit utility-style banking”.
The book ends on an optimistic note, claiming that institutions in the future can be “shaped by the willingness of ordinary people to impose limits, standards and sustainability on capital”.
12 comments ↓
Ah! the end of greed at last?
Changed in 2004 by the Clinton administration? That can’t be.
Tom, I’m assuming you meant 1994 here…
Sounds like a great read, I’ve been looking for a comprehensive account of recent events, and as a non-economics graduate, have found it hard to find anything suitable.
Hi Liam and Ben,
Yes, should have been 1994. I’ve amended the post. Thanks.
The banks are a side line.
The real issue is the state. Politicians, and particularly Labour have run up massive liabilties.
Gilts are a minor part. It’s the pensions and all the other stuff off the books that show fiscal incompetance of a massive level.
Banks are peanuts in comparison
The links here are worth pursuing -
http://www.craigmurray.org.uk/archives/2009/04/nobody_can_hear.html
Does this article relate to the Bears-Steagall act that was imposed on the USA money markets after the great depression? If so, this is the act that Clinton lifted and if memeory serves me right, Lawson followed a similar line by making money freely available.
The biggest obstacle, now proven, to moving out of a dpression is protectionism.
Why the USA went into meltdown during the 1920’s is as fascinating as the struggle to get out of it but it comes down to protecting what you’ve got vs watching it being swallowed up by predators.
Apparently, the predators have the edge!
Tom, just to clear up the confusion: the 2004 rule change was important. Under Bush, not Clinton, Paulson et al persuaded the SEC to life the leverage ratio from 12/1 to 40/1. But the 1999 (not 1994) repeal of Glass Steagall was even more important. Clinton – indeed Summers, Geithner et al – were involved in this. The two events are getting mixed up in these comments. Thanks for reading the book and engaging with its arguments. Best, Paul
“neoliberal ideology that underpinned the thinking behind American deregulation”…and labour party policy for the last 10 years
Read John Seddon’s Systems Thinking in the Public Sector – it highlights how political ideology and good ideas have entrapped public sector improvement in the political battle. Centrally-prescribed targets leading to dumb services.
Choice as ideology being pushed upon services. For example people asking for services sounds like – can i have benefits or please help me get better – are then given choice – you can get better here or choose from these 7 hospitals/doctors etc
It’s important stuff and the key to improving public services
This week a Banking Guru on TV stated according to her, Banking Bonus payments must re start at once otherwise we will lose many highly qualified people, are those the highly qualified people who are running away now with massive pensions as the greed continues.
I haven’t heard anything about reform of banking regulation. Admittedly that may be media laziness. What’s happening?
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