Reviewing Jeff Madrick’s new book The Age of Greed, Paul Krugman says the nation’s system of financial investment exists today largely as it did before the 2008 collapse of Lehman Brothers, et al. It has existed this way, without appropriate oversight, since the 1970s. And while our latest financial crisis has been billed as a freak accident, “it was, in fact, just the most recent installment in a recurrent pattern of financial overreach, taxpayer bailout, and subsequent Wall Street ingratitude. And all indications are that the pattern is set to continue.”
What’s the Big Idea?
There was not always a time when entire nations were put a risk because of financial investors’ daring. After the Great Depression, financial regulation made banking safe and boring until the 1970s, when the industry began to get greedy and, lamentably, the government acquiesced. “What we have experienced is, in a very real sense, the triumph of Wall Street and the decline of America. …even now we don’t seem to have learned the lesson that unregulated greed, especially in the financial sector, is destructive.”