Paul Mason: Meltdown

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”.

16 comments ↓

#1 Mr. Mxyzptlk on 04.29.09 at 10:46 am

Ah! the end of greed at last?

#2 ben on 04.29.09 at 11:46 am

Changed in 2004 by the Clinton administration? That can’t be.

#3 Liam on 04.29.09 at 12:41 pm

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.

#4 Nick on 04.29.09 at 1:00 pm

So it really did start in America?! Amazing.

And I thought all along that it was Ed Balls and Gordo who had f***ed up.

You live and learn

#5 Tom on 04.29.09 at 1:14 pm

Hi Liam and Ben,

Yes, should have been 1994. I’ve amended the post. Thanks.

#6 Nick on 04.29.09 at 2:11 pm

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

#7 Harry Barnes on 04.29.09 at 8:07 pm

The links here are worth pursuing –
http://www.craigmurray.org.uk/archives/2009/04/nobody_can_hear.html

#8 mitch on 04.30.09 at 10:43 am

I see you excelled yourself in the Ghurkha vote, Tom. Well done! How brave you are.

#9 Quietzapple on 04.30.09 at 11:39 am

I like this for an historical perspective on Great Britain’s debt:

http://www.ifs.org.uk/bns/bn26.pdf

Makes the formerly Thatcherite economist Sam Brittan’s view that it is better to borrow to keep people in useful work than to pay for wars sound all the more sensible to me . . .

#10 Quietzapple on 04.30.09 at 11:48 am

Last point:

Time for the Petition I have asked for on No 10 website to Gordon to support a Knighthood for Ryan Giggs to be offered as much support as pos. Might actually outdo the other one, ManU have a BILLION fans, and SAF is supposedly pro Labour, a gentle whisper . . ?

#11 Gary Elsby on 05.01.09 at 12:08 pm

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!

#12 Paul Mason on 05.02.09 at 1:40 pm

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

#13 Rob on 05.08.09 at 10:59 pm

“neoliberal ideology that underpinned the thinking behind American deregulation”…and labour party policy for the last 10 years :-(

#14 Howard on 05.16.09 at 3:43 pm

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

#15 Robert on 05.18.09 at 8:12 am

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.

#16 Adam on 05.20.09 at 1:51 pm

I haven’t heard anything about reform of banking regulation. Admittedly that may be media laziness. What’s happening?

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