Age of Greed: The Triumph of Finance and the Decline of America, 1970 to the Present [Deckle Edge] [Hardcover]

Jeff Madrick (Author)

Book Description

Release date: May 31, 2011

A vividly told history of how greed bred America’s economic ills over the last forty years, and of the men most responsible for them.

As Jeff Madrick makes clear in a narrative at once sweeping, fast-paced, and incisive, the single-minded pursuit of huge personal wealth has been on the rise in the United States since the 1970s, led by a few individuals who have argued that self-interest guides society more effectively than community concerns. These stewards of American capitalism have insisted on the central and essential place of accumulated wealth through the booms, busts, and recessions of the last half century, giving rise to our current woes.

In telling the stories of these politicians, economists, and financiers who declared a moral battle for freedom but instead gave rise to an age of greed, Madrick traces the lineage of some of our nation’s most pressing economic problems. He begins with Walter Wriston, head of what would become Citicorp, who led the battle against government regulation. He examines the ideas of economist Milton Friedman, who created the plan for an anti-Rooseveltian America; the politically expedient decisions of Richard Nixon that fueled inflation; the philosophy of Alan Greenspan, on whose libertarian ideology a house of cards was built on Wall Street; and the actions of Sandy Weill, who constructed the largest financial institution in the world, which would have gone bankrupt in 2008 without a federal bailout of $45 billion. Significant figures including Ivan Boesky, Michael Milken, Jack Welch, and Ronald Reagan play key roles as well.

Intense economic inequity and instability is the story of our age, and Jeff Madrick tells it with style, clarity, and an unerring command of his subject.

Editorial Reviews

Review

A Washington Post Notable Nonfiction Book of 2011
 
“A fascinating and deeply disturbing tale of hypocrisy, corruption, and insatiable greed. But more than that, it’s a much-needed reminder of just how we got into the mess we’re in—a reminder that is greatly needed when we are still being told that greed is good.”
            -Paul Krugman and Robin Wells, The New York Review of Books
 
“Compelling . . . Important . . . Ambitious in its scope and frequently persuasive in its arguments, Age of Greed abounds with powerful men, ugly fights, infamous scandals, twists and turns, and, true to the book’s title, lots of shameless cupidity.”
            -David Greenberg, The Washington Post
 
“The timing could not be better for a book like Age of Greed . . . A solid review of half a century of economic history . . . A commendable compendium.”
            -Adam Lashinsky, San Francisco Chronicle
 
“Excellent . . . Straightforward . . . We owe Madrick thanks for what he has done.”
            -Richard Parker, The American Prospect
 
“A compelling and worthy read. Madrick is an able journalist; an excellent and cogent storyteller in a field that often defies the straightforward plot or easy explanation—economics.”
            -Michael Winship, Salon.com
 
“Richly detailed and often riveting . . . Clear and compelling . . . A must-read.”
            -Glenn C. Altschuler, The Huffington Post
 
“Bold . . . Readers will find worthwhile stories in these pages.”
            -Sebastian Mallaby, The New York Times Book Review
 
“If you are going to read one book on the financial crisis, this might well be the one to choose.”   
            -Tom Streithorst, Prospect
 
“Madrick pulls no punches . . . Readers who want to understand where we are, how we got here, and some possible outcomes will repay their investment in reading time if they pick up this new volume.”
            -(Fredericksburg) Free Lance-Star
 
“Madrick’s explanation of how greed arose throughout American society contains large dollops of originality . . . Age of Greed is lucid and compelling because of its character-driven nature.”
            -Steve Weinberg, Dallas Morning News
 
“Meticulous . . . Madrick makes a good case—and financial news junkies will savor it.”
            -Carl Hartman, Boulder Daily Camera
 
“Persuasive . . . Vivid . . . As a comprehensive survey of the way institutions work together to create wealth for a few individuals and destroy it for a mass of others, Age of Greed deserves attention.”
            -Margaret Quamme, The Columbus Dispatch
 
 “Jeff Madrick has written one of those rare, wonderful books that allow us to understand a huge and important historical development that we may not have realized was a coherent and coordinated series of events. Madrick’s account of Alan Greenspan’s ideologically-driven mistakes alone is worth the price of admission, but it is but one course in a feast of wonderful reporting and writing. If you want to know what has happened to your country, read this book.”
            -Robert G. Kaiser, author of So Damn Much Money: The Triumph of Lobbying and the Corrosion of American Government
 
“Jeff Madrick’s devastating biography of greed is rife with carefully documented cautionary tales of the rich, greedy and unregulated, which collectively constitute the definitive answer to Milton Friedmanesque laissez faire economics.”
            -Victor Navasky, author of Kennedy Justice
 
“Honore de Balzac wrote long ago that behind every great fortune lies a great crime.  Now in Jeff Madrick’s important new book, Age of Greed, we are introduced to some of the best and brightest moneychangers in the murky world of high finance.”
-Gay Talese, author of A Writer's Life
 
“Who’s responsible for the laying waste of our economy—making the rich far richer and everyone else economically insecure? Madrick does more than name names. He tells us who did what and how they did it—the ideologues, demagogues, corporate titans, and crooks. A wonderfully insightful but deeply troubling account of the movers and shakers who toppled America.”
-Robert B. Reich, author of Aftershock: The Next Economy and America’s Future
 
“The economic disaster of 2008 was not an accident of God but a man-made event. In writing about the financiers, bankers, brokers, free-market philosophers, hedge fund managers and government officials who together engineered the fundamental and profound, almost revolutionary shift in the American economy that culminated in the events of 2008, Jeff Madrick provides his readers with a new and startling account of recent economic history. The individual chapters are riveting but the genius of this book is that Madrick's whole is even greater than the sum of its manificent parts. This is a book that bears reading by everyone with an interest in the American economy and the American future.”
-David Nasaw, author of The Chief: The Life of William Randolph Hearst
 
“Ideas and policies, like people, have parents and grandparents and in Age of Greed we learn of the men (and they are all men) whose ideas and actions begat three decades with almost no income growth for the vast majority, mountains of debt and fabulous riches for themselves and their peers. Jeff Madrick provides a powerful story of the damage done to our nation by hubris, delusions and lust for money.”
-David Cay Johnston, author of Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You with the Bill)
 
“An excellent, thought-provoking book.”
            -Booklist

About the Author

Jeff Madrick is a regular contributor to The New York Review of Books, a former economics columnist for The New York Times, and editor of Challenge magazine. He is an adjunct professor of humanities at The Cooper Union, and senior fellow at the Roosevelt Institute and at the Schwartz Center for Economic Policy Analysis, The New School. His previous books include The End of Affluence and Taking America, and he has written for The Washington Post, the Los Angeles Times, Institutional Investor, The Nation, and The American Prospect. He lives in New York City.

See all Editorial Reviews

Product Details

• Hardcover: 480 pages
• Publisher: Knopf; First Edition edition (May 31, 2011)
• Language: English
• ISBN-10: 1400041716
• ISBN-13: 978-1400041718
• Product Dimensions: 6.8 x 1.5 x 9.5 inches
• Shipping Weight: 1.6 pounds (View shipping rates and policies)
• Average Customer Review: 4.6 out of 5 stars  See all reviews (28 customer reviews)
• Amazon Best Sellers Rank: #146,388 in Books (See Top 100 in Books)

More About the Author

JEFF MADRICK is a former economics columnist for The New York Times and has been a regular contributor to The New York Review of Books for many years. He is editor of Challenge Magazine, visiting professor of humanities at The Cooper Union, and senior fellow at The Roosevelt Institute and the Schwartz Center for Economic Policy Analysis, The New School. He is the author of a half dozen books, including Taking America (Bantam), and The End of Affluence (Random House), both of which were New York Times Notable Books of the Year. Taking America was also chosen by Business Week as one of the ten best books of the year. His most recent books are Why Economies Grow (Basic Books) and The Case for Big Government, which won a general non-fiction award from Pen America. His new book, published in mid-2011 by Alfred A. Knopf, is Age of Greed, The Triumph of Finance and the Decline of America, 1970 to the Present.

He has written for many other publications, including The Washington Post, The Los Angeles Times, Institutional Investor, The Nation, American Prospect, The Boston Globe, Newsday, Dissent, and the business, op-ed, and magazine sections of The New York Times. He has appeared on Charlie Rose, The Lehrer News Hour, Now With Bill Moyers, Frontline, CNN, CNBC, CBS, BBC,and NPR. He was formerly finance editor of Business Week Magazine, a columnist for Money Magazine, and an NBC News reporter and commentator. His awards also include an Emmy and a Page One Award. He was educated at New York University and Harvard University, and was a Shorenstein Fellow at Harvard.

Most Helpful Customer Reviews

133 of 137 people found the following review helpful

5.0 out of 5 stars Why We're In This Condition June 18, 2011

By John D. Cofield TOP 500 REVIEWERVINE™ VOICE

Format:Hardcover|Amazon Verified Purchase

Americans in 2011 have a lot to be unhappy about: high unemployment, entire neighborhoods of foreclosed houses, decimated retirement accounts and portfolios, and so on for far too many depressing statistics. Since the Crisis of 2007-08 we've grown accustomed to talking heads wisely explaining that this is part of a cycle of boom and bust that is unavoidable. Really? Jeff Madrick's well researched and engaging history of the last 40 years or so has a very different view.

Beginning in the late 1950s and early 1960s financiers began to pressure the US government to ease or eliminate many of the provisions to regulate the financial markets that had been put into place during the New Deal. Their efforts began to bear fruit in the 1970s, when both Republican and Democratic Administrations and Congresses, heavily influenced by advice from wealthy bankers and brokers, agreed to dismantle most of the regulatory structure. This deregulatory process gained strength in the 1980s and 1990s, again at the hands of both parties, and finally bore fruit in the 2000s when the markets collapsed and came close to dragging the entire world into another Great Depression. Like most people, I remember those frightening days all too well, but I didn't fully understand what was going on and I certainly didn't know what to expect in the future.

Jeff Madrick has done an excellent job of chronicling the financial decisions and decision makers of the last four decades. He provides many short but thorough biographies of the principal actors, some well known or infamous like Ivan Boesky and Michael Milken, others less public but still important like Lewis Uhler and Walter Wriston. Having this background information makes the decisions of Arthur Burns, Paul Volcker, Alan Greenspan, and the eight presidents since 1970 more understandable and also more disheartening. Throughout the book Madrick returns to the main moral: while the men who gambled with the economy often made vast fortunes and gained enormous prestige, the middle class saw their pay stagnate, their pensions shrivel, and their houses lose value. The solution is obvious, but Madrick delineates it carefully: the regulatory structure that shriveled during the "good times" must be reinstated and strengthened, and future political leaders need to spend less time listening to Wall Street and more time on Main Street.

32 of 35 people found the following review helpful

4.0 out of 5 stars A Chronicle of Unrestrained Greed and Corruption July 7, 2011

By Bill Jarvis

Format:Hardcover

Age of Greed is a fascinating account of how unfettered self-interest and outright greed overcame virtually all barriers and resulted in enourmous growth of the financial sector over the past 30-40 years. The book is really a series of interconnected stories, each illustrating how prominent individuals and institutions manipulated the system and took on devastating risk levels for private gain.

The book covers a series of ever increasing financial crises and frauds, such as the Latin American and Asian financial crises and the Enron scam. It focuses on prominant people like Milton Friedman, Alan Greenspan, Jack Grubman, Frank Quattrone, Ken Lay, Angelo Mozilo and Dick Fuld and how they contributed to one disaster after another. The book shows how free-market fundamentalism and "greed is good" mentality came to dominate, and how that resulted in the destruction of the regulatory environment that once kept the banking sector safe.

While the book offers a great overview of what happened in the financial sector, it fails to acknowledge the other critical forces that have been in play in America since the 1970s: Globalization, the decline of private sector unions, the entry of huge numbers of women into the workforce, and the relentless advance of technology.

While the role of Wall Street, and in particular, deregulation is of critical importance, it would be a mistake to make the simplistic assumption that this explains all our problems. Information technology, in particular, has advanced tremendously since the 1970s, and it is important to recognize this because the impact will be even greater in the future. For two great books that offer critical (but differing) insight into how technology is shaping the economy and will continue to do so in the coming decades, check out The Lights in the Tunnel: Automation, Accelerating Technology and the Economy of the Future (which focuses in particular on changes coming to the job market and overall economy) and also The Great Stagnation.

29 of 32 people found the following review helpful

5.0 out of 5 stars A wonderfully insightful but deeply troubling account of the financial crisis of 2008 July 11, 2011

By Didaskalex TOP 1000 REVIEWERVINE™ VOICE

Format:Hardcover

*****
"Who's responsible for the laying waste of our economy, making the rich far richer and everyone else economically insecure? Madrick ...tells us who did what and how they did it--the ideologues, demagogues, corporate titans, and crooks. A wonderfully insightful but deeply troubling account of the movers and shakers who toppled America." -- Robert B. Reich,

The great financial crisis of 2008 had consequences so dreadful that still paralyzes our economy. It is sometimes portrayed as a 100 year economic tsunami, an erupting event that nobody could have prevented or even predicted. Intense economic inequity and instability became the character of our age. Jeff Madrick, director of policy research at the Schwartz Center for Economic Policy Analysis, eloquently tells us about the tragic story with an unerring command of expertise. His vivid historical version of America's greed bred economic ills, advancing quitely over the last four decades, and the agents most responsible for them may shock you. Deeply disturbing, is the suggestion not just that we are witnessing a repeating cycle, but that the busts keep getting bigger. According to Madrick, it was just the most recent downpayment for a recurrent pattern of financial outwit, taxpayer bailout, and Wall Street subsequent lack of commitment to clean their own mess.

He describes, the accumulation and eruption of America's slow receding economic crisis, in an engaging though tragic story. Thus, he relates that in 1991, when the outcome of vast, loan-financed commercial real estate over-development in the 1980's came home to settle, helping to trigger the collapse of the 'junk-bond' market and putting Citibank, and the other big banks to great risk. Thanks to monatory regulation, that bank deposits were federally insured, that averted a major crisis. Economists could be talking about 1982-83 reckless lending to Latin America, which ended in a severe debt crisis that threatened major banks such as, well Fargo, Citibank with great risk, and only huge lending to Mexico, Brazil held a deeper crisis to mature. The author reminds us, we could be talking about the grave problem trickled by the bankruptcy of Penn Central in 1970, which put its lead banker, First National City on the edge. Only Federal Reserve emergency lending could avert a looming disaster.

In the first part of the book, Madrick covers versant ground, chronicling how could this happen through a series of personal profiles. Friedman's worldview, advocated that free markets were the solution to almost every problem; bank regulation, financial speculation, product safety, and health care. Although Friedman offered some viable economic insights, he attempted to squeeze real market data to fit into a one-sided thesis, gaining his theories more approval than was ultimately justified. The transformation of American banking initiated by Wriston which began in early 1960's, when City Bank precursor initiated CDs, negotiable certificates of deposit, that could be cashed in early, as an alternative to regular bank deposits. As Madrick posed no difficulty to points out that, "Wriston lived a free market charade," strongly opposing the federal bailouts of Chrysler (1978) and Continental Illinois (1984) while his own back was saved multiple times by government intervention.

The second part of Madrick's book surveys the wide-open, anything goes financial world that deregulation created. This was an era marked by two huge bubbles--the technology bubble of the 1990s and the housing bubble of the Bush years--both of which ended in grief, although the economic damage inflicted by the second bubble's bursting was vastly greater.The illuminating narratives keep progressing taking away our blissful ignorance of the fine print of the free market players and economists strive to deal with their untamed greedy nature. But since all indications, that the author detailed, are most probably that the pattern is set to continue. Age of Greed: 1970 to the Present is a masterful exposition of the emergence and chronic persistence of this cyclic pattern. And since it seems that nothing was learned from the 2008 crisis, you have to wonder just how bad the next one will be.