13 Bankers: The Wall Street Takeover and the Next Financial Meltdown

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13 Bankers: The Wall Street Takeover and the Next Financial Meltdown Investing
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Inspite of its key role in creating the ruinous financial crisis of 2008, the American banking industry has grown bigger, more profitable, and more resistant to regulation than ever. Six megabanks claim assets amounting to more than 60% of the country's gross domestic product - wihile exercising oligarchic clout in the global economy. This timely account of the troubled U.S. political economy charts the rise to power of the financial sector and forecefully argues breaking up the big banks to avoid future financial catastrophes. Notes, Further Reading, Index. 316p. argues for breaking up the big banks if we want to avoid future financial catastrophes.

Editorial Reviews

A stinging indictment of the reckless "new American oligarchy" that led the nation to an economic precipice—and which, because of the government bailout, the authors say, threaten to put U.S. taxpayers on the hook again.Unlike Andrew Ross Sorkin in his book Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System—and Themselves (2009), economics expert Johnson (Entrepreneurship/MIT Sloan School of Management) and business consultant Kwak prefer long-view analysis to microcosmic narrative. The authors trace suspicion of concentrated banking systems to the beginning of the republic. Jefferson suggested that supporting a federally chartered bank was tantamount to treason. Subsequent tectonic shocks—especially the Panic of 1907 and the Great Depression—led to the financial apparatus of the mid-century—the Federal Reserve, designed to backstop Wall Street in a crisis, and the New Deal, which, by separating commercial and investment banking, protected the ordinary investor from the perils of the system. During the past three decades, however, Republican and Democratic administrations alike have accommodated the CEOs of America's largest financial institutions as they plunged into new, larger markets. Techniques pioneered or expanded—structured finance, credit default swaps and subprime lending—built a real-estate and financial house of cards. Presidents placed former Wall Street players in senior Treasury and Fed posts because only they, it was felt, could understand this brave new world of modern finance. In this environment of "the soft power of access and ideology," regulation fell by the wayside, ballooning the industry and compensation. The authors argue convincingly that the philosophy behind the bailout—"too big to fail"—only consolidated more power in fewer firms, solidifying the remaining giants' influence over legislation and necessitating their breakup into smaller units.A detailed, dismaying and damning summation of recent Wall Street-Washington collusion—and the recurrent risk of financial folly. Copyright Kirkus 2010 Kirkus/BPI Communications.All rights reserved.

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