This book confirms what me and many Liberals predicted would happen when brainless Ronnie Reagan entered the White House. The decline of America began in earnest by Corporations with their tool Ronnie Reagan! Massive GOP sponsored 'Deregulation' and Globalism are the reason for the present implosion of America.....
Chronicling embrace of greed, decline of America
By Michael D. Langan July 3, 2011, 1:11 PM
Remember Gordon Gekko's words: "Greed, for lack of a better word, is good" in the "Wall Street" film of 1987? ("Greed is good" was a better line, but he never said it.)
The book, "Age of Greed", shows us that while "money never sleeps," it doesn't care much who it sleeps with. Its story line is "stewards of capitalism amass fortunes and the hell with the rest of us." This at least is the view of the seasoned economist and fine writer Jeff Madrick.
Madrick, former economic columnist for the New York Times and now editor of "Challenge Magazine," and a contributor to the New York Review of Books, puts the blame on lax governmental regulations starting in the 1970s for the 2008 financial collapse.
How did it happen? Major players like Walter Wriston, head of what became Citicorp, led the battle against government regulation. Milton Friedman created the plan for an anti-Rooseveltian America. Richard Nixon fueled inflation. Alan Greenspan's libertarian philosophy built a house of cards on Wall Street, and Sandy Weill of Citigroup threw gas on the flames. Other big players in the debacle included arbitrageur Ivan Boesky, junk bond salesman Michael Milken, Jack Welch of General Electric and Ronald Reagan.
The story told by Madrick goes back further. There's always been greed, but it accelerated in America after the 1950s. In the 1930s, 1940s and 1950s, Madrick explains that "Washington created far-reaching financial, social, and economic reforms in the Depression and managed the massive war effort ... it built highways, set out to send men into space and subsidized housing."
In the 1960s, the federal government created Medicare, expanded Social Security and "adopted regulations to protect consumers and workers, long-awaited civil rights guarantees and developed antipoverty programs." These are federal successes by most people's reckoning.
Even so, these programs didn't please everyone. People like Lewis Uhler, a Southern Californian, hated the New Deal as his father had. He and others with the same view came of age in the 1950s. They "feared their personal liberty was in constant danger of being taken away by big government ... they laid the foundation for a new age," Madrick writes. "Soon," he notes, "social programs were curtailed. Regulations were eliminated and weakened." Tax revolts started slowly and spread rapidly. Ronald Reagan was elected president and his refrain was that "big government held all Americans back."
According to Madrick, "It was truly an Age of Greed -- one so intense that it swept aside the valuable regulations that grew out of the Great Depression." Government became lax and politicians fell under the sway of think tanks that focused on their distrust of government and their distrust of taxes.
Inflation and unemployment soared in the 1970s and, Madrick says, people panicked. They looked for scapegoats. President Jimmy Carter helped businesses with a raft of deregulation. Gov. Ronald Reagan of California hopped on board the tax reduction train and tried to reduce the state income tax permanently. It didn't happen, but five years later Proposition 13 passed in California, reducing property taxes.
Madrick lays out the story of the revolution, with the loss of government as a counterweight and describes the new individualistic ideologies that carried the day. It is at this point that financiers like Walter Wriston entered the picture and did their sleight of hand. Debt became more acceptable, profits grew and "hundreds of billions of precious American savings were wasted."
The author admits that "Not all those who are the principal focus of a chapter were blatant practitioners of greed -- some not at all." Tom Peters, the management consultant; Paul Volcker, the chairman of the Fed; George Soros, the hedge fund manager; and Milton Friedman get high marks from Madrick being prudent and provident.
The reality may not be this bad, but it comes close to these mad conceptions. Our politicians all blame the last guy in office and they are right. Those in office -- with some exceptions -- haven't done much to limit our losses since the 1960s. Kicking the can down the road doesn't work.
So what's the point of Madrick's careful exposition of how finance won the day and America declined? One can question or object to parts of his arguments, his interpretation of major players' roles, but the main outline of decline is indisputable.
Madrick is giving a 2011 "George Bailey warning" from the 1946 film, "It's A Wonderful Life." Remember that George is shown by Clarence, an angel, the good that he's done by touching the lives of others and what would have happened in a dream had he not lived.
Regrettably, Madrick's not relating a dream. And there are plenty of Mr. Potters in the economic script of the last 40 years. The great value of the "Age of Greed" is that it shows in detail how financial policies and misadventures have led to America's decline.
As Madrick said in an interview recently, "Occasionally you can't stop greed. But greed overwhelmed the system, the incentives were asymmetric." This remark is practical in its aspect: bad things happen when government oversight is insufficient or non-existent. But the condition doesn't excuse the evil.
To make matters worse, markets have gone global, and countries are skittish about imposing anything but minimal international banking norms. Thus, the future for national or international regulation asserting an upper hand in the world of finance looks dim.
Not only this, but other battles are ongoing. They include the issue of additional capital requirements for banks, attempting to regulate derivatives, (on the scene since 1972) and coping with the prospect of the new Consumer Financial Protection Bureau.
It is generally acknowledged that the G.W. Bush years decimated the Justice Department's lawyering capacities. The result is that the banks clearly have the advantage from a counsel representation perspective. More than occasionally the government wins cases but private money pays for better representation. "How much justice can you afford?" is an old maxim and the new norm.
All this is to say that "The Age of Greed" is a complicated and compelling story. Madrick has done signal service, the equivalent of being an economic compass, by telling us where we are and how we got here.
Escaping the fiscal thicket and pulling out of America's decline will be hard. As Madrick says, "The financial community has to be remade to allocate resources effectively again. This requires more regulation of compensation and conflicts of interest, more transparency of trading and more outright prohibition of activities that distort markets and promote speculation."
Such a reworking will require cooperation and sacrifice from political parties and the millions they represent not presently in evidence.
Chronicling embrace of greed, decline of America
By Michael D. Langan July 3, 2011, 1:11 PM
Remember Gordon Gekko's words: "Greed, for lack of a better word, is good" in the "Wall Street" film of 1987? ("Greed is good" was a better line, but he never said it.)
The book, "Age of Greed", shows us that while "money never sleeps," it doesn't care much who it sleeps with. Its story line is "stewards of capitalism amass fortunes and the hell with the rest of us." This at least is the view of the seasoned economist and fine writer Jeff Madrick.
Madrick, former economic columnist for the New York Times and now editor of "Challenge Magazine," and a contributor to the New York Review of Books, puts the blame on lax governmental regulations starting in the 1970s for the 2008 financial collapse.
How did it happen? Major players like Walter Wriston, head of what became Citicorp, led the battle against government regulation. Milton Friedman created the plan for an anti-Rooseveltian America. Richard Nixon fueled inflation. Alan Greenspan's libertarian philosophy built a house of cards on Wall Street, and Sandy Weill of Citigroup threw gas on the flames. Other big players in the debacle included arbitrageur Ivan Boesky, junk bond salesman Michael Milken, Jack Welch of General Electric and Ronald Reagan.
The story told by Madrick goes back further. There's always been greed, but it accelerated in America after the 1950s. In the 1930s, 1940s and 1950s, Madrick explains that "Washington created far-reaching financial, social, and economic reforms in the Depression and managed the massive war effort ... it built highways, set out to send men into space and subsidized housing."
In the 1960s, the federal government created Medicare, expanded Social Security and "adopted regulations to protect consumers and workers, long-awaited civil rights guarantees and developed antipoverty programs." These are federal successes by most people's reckoning.
Even so, these programs didn't please everyone. People like Lewis Uhler, a Southern Californian, hated the New Deal as his father had. He and others with the same view came of age in the 1950s. They "feared their personal liberty was in constant danger of being taken away by big government ... they laid the foundation for a new age," Madrick writes. "Soon," he notes, "social programs were curtailed. Regulations were eliminated and weakened." Tax revolts started slowly and spread rapidly. Ronald Reagan was elected president and his refrain was that "big government held all Americans back."
According to Madrick, "It was truly an Age of Greed -- one so intense that it swept aside the valuable regulations that grew out of the Great Depression." Government became lax and politicians fell under the sway of think tanks that focused on their distrust of government and their distrust of taxes.
Inflation and unemployment soared in the 1970s and, Madrick says, people panicked. They looked for scapegoats. President Jimmy Carter helped businesses with a raft of deregulation. Gov. Ronald Reagan of California hopped on board the tax reduction train and tried to reduce the state income tax permanently. It didn't happen, but five years later Proposition 13 passed in California, reducing property taxes.
Madrick lays out the story of the revolution, with the loss of government as a counterweight and describes the new individualistic ideologies that carried the day. It is at this point that financiers like Walter Wriston entered the picture and did their sleight of hand. Debt became more acceptable, profits grew and "hundreds of billions of precious American savings were wasted."
The author admits that "Not all those who are the principal focus of a chapter were blatant practitioners of greed -- some not at all." Tom Peters, the management consultant; Paul Volcker, the chairman of the Fed; George Soros, the hedge fund manager; and Milton Friedman get high marks from Madrick being prudent and provident.
The reality may not be this bad, but it comes close to these mad conceptions. Our politicians all blame the last guy in office and they are right. Those in office -- with some exceptions -- haven't done much to limit our losses since the 1960s. Kicking the can down the road doesn't work.
So what's the point of Madrick's careful exposition of how finance won the day and America declined? One can question or object to parts of his arguments, his interpretation of major players' roles, but the main outline of decline is indisputable.
Madrick is giving a 2011 "George Bailey warning" from the 1946 film, "It's A Wonderful Life." Remember that George is shown by Clarence, an angel, the good that he's done by touching the lives of others and what would have happened in a dream had he not lived.
Regrettably, Madrick's not relating a dream. And there are plenty of Mr. Potters in the economic script of the last 40 years. The great value of the "Age of Greed" is that it shows in detail how financial policies and misadventures have led to America's decline.
As Madrick said in an interview recently, "Occasionally you can't stop greed. But greed overwhelmed the system, the incentives were asymmetric." This remark is practical in its aspect: bad things happen when government oversight is insufficient or non-existent. But the condition doesn't excuse the evil.
To make matters worse, markets have gone global, and countries are skittish about imposing anything but minimal international banking norms. Thus, the future for national or international regulation asserting an upper hand in the world of finance looks dim.
Not only this, but other battles are ongoing. They include the issue of additional capital requirements for banks, attempting to regulate derivatives, (on the scene since 1972) and coping with the prospect of the new Consumer Financial Protection Bureau.
It is generally acknowledged that the G.W. Bush years decimated the Justice Department's lawyering capacities. The result is that the banks clearly have the advantage from a counsel representation perspective. More than occasionally the government wins cases but private money pays for better representation. "How much justice can you afford?" is an old maxim and the new norm.
All this is to say that "The Age of Greed" is a complicated and compelling story. Madrick has done signal service, the equivalent of being an economic compass, by telling us where we are and how we got here.
Escaping the fiscal thicket and pulling out of America's decline will be hard. As Madrick says, "The financial community has to be remade to allocate resources effectively again. This requires more regulation of compensation and conflicts of interest, more transparency of trading and more outright prohibition of activities that distort markets and promote speculation."
Such a reworking will require cooperation and sacrifice from political parties and the millions they represent not presently in evidence.
