Customer Reviews

Meltdown: How Greed and Corruption Shattered Our Financial System and How We Can Recover

5 star:		(4)
4 star:		(2)
3 star:		(2)
2 star:		(1)
1 star:		(8)

 

 

The "Meltdown" book to read is called:

Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse

"A new New Deal?" Jesse Jackson is a credible economist now? (Civil rights activist sure, but no, not an economist.) Please, give us a break from this insanity. Even if you read this terrible book (which simply rehashes all the fuzzy economics on the TV news anyway), at least read Thomas Woods' "Meltdown" book as well to get the competing view.

It wasn't simply "greed"--the Fed and the government caused the so called "meltdown".

This collection of articles from the US journal The Nation gives fascinating insights into capitalism's continuing crisis. The Clinton administration and the Federal Reserve Bank together blocked efforts to regulate credit derivatives. They created a debt casino. The Fed, under `maestro' Alan Greenspan, never saw the bubble coming, yet The Nation's Dean Baker warned in August 2004 of a housing bubble, as did William Greider in September 2005, forecasting `dramatic price inflation in real estate'.

Wall Street is no better than a criminal conspiracy against the American people. As Steve Fraser writes, "Wall Street, after all, had been convicted in the court of public opinion of reckless, incompetent, self-interested, even felonious behavior, with consequences so devastating for the rest of the country that government was licensed to make sure it didn't happen again."

But the government has failed to make sure it won't happen again. Its spending cuts will only deepen the slump. The IMF said that balancing the US budget would cut its current account deficit only slightly, but would cut output by more than $300 billion over five years.

The ruling class wants slow or no growth, high unemployment and low inflation, because these bring high profits. Trade unions in the USA are calling this the `job-loss recovery'. Laws protecting capital are mandatory; laws protecting labour are nugatory. Low inflation boosts the prices of financial assets, pumping up the financial bubble.

Faced with static or falling wages, price rises and job cuts, too many workers have chosen not to fight for wages and for jobs but instead to run up debts, dig into their savings and pensions, and remortgage their homes. So they have become dependent on building societies and banks.

Aggressive private firms have taken advantage of this weakness and pushed their dodgy financial products in order to loot the savings, mortgages and pensions of the working class majority. Predatory lending pumps $9 billion a year from the poorest to the richest.

The ideology of de-regulation and freedom for capital is bankrupt. We need controls on capital, the re-regulation of finance, public investment and higher wages.

The authors fail to mention that all of the 'greed' and 'corruption' cited in the book was completely enabled (and even encouraged) by our government and Federal Reserve. This enablement was not a result of a lack of regulation and oversight, but rather the easy-money policies increasingly promoted by both Republicans and Democrats over the past thirty years. As the authors do not understand this, they fail to identify the solution to our current crisis, which is a return to sound monetary and fiscal policies.

I like Katrina, and commend her on her rare and principled stand against the Iraq War long before such views were popular. That said, I think she would do well to read Thomas Wood's book "Meltdown" for a clear understanding as to what caused the collapse and what we should do to restore prosperity.

Mass foreclosures, bank failures, and hundred-billion-dollar bailouts rocked America in 2008-2009. "Meltdown" is a collection of articles published in "The Nation" and its website, beginning long before the crisis was obvious.

Contributors are convinced that the 1999 repeal of the Glass-Steagall Act, allowing the merger of closely regulated commercial banks with unregulated investment houses was a major contributor to this crisis. It was precipitated by the 1998 merger of Citigroup and Travelers Insurance (Soloman, Smith, Barney Brokerage was later also added). The merger was a violation of laws separating banks and insurance companies, but the two exploited loopholes giving the merger a temporary exemption.

Days after the deal Citigroup hired recently departed Treasury Secretary Rubin to its three-person Chairman's Office, and then began lobbying for permanent approval while donating hundreds of millions to Congressmen. Success came the following year.

"Meltdown" offers no evidence that the repeal of Glass-Steagall added to the current crisis, nor does it mention that most other advanced nations do not have such a prohibition. It was interesting, however, to read that the 1993 FASB proposed counting the value of stock options issued as an expense (eg. would have turned Cisco's 1998 $1.35 billion profit into a $4.9 billion loss), and that the Commodity Futures Trading Commission's 1997 efforts to regulate derivatives was blocked by key advisers to Clinton and Obama.

Bottom Line: The material was somewhat interesting, but did not make solid points; lacking that, its' prescriptions for the future are suspect, at best.

This book is a collection of essays or articles from The Nation.

Some of my observations from the book;

Thomas Frank points out that "market populism" isn't really populism at all. On page 41 he suggests that the "New Economy" has exalted the rich and forgotten the rest with a decisiveness we haven't seen since the twenties.

Bobbi Murray observes that one of the incentives for the expansion of sub-prime mortgages was the direct transfer of money to Wall Street in the form of mortgage-backed securities.

In the essay "Show Me The Money" contributed by Walter Mosley, he differentiates between "middle class" and "working class". An interesting essay!

On page 249 Howard Zinn points out that government has always intervened in the market. "Let's face a historical truth:we never have had a free market."

Among the potential solutions worth noting were those given by William Greider and Howard Zinn on taxation.
Sarah Anderson and Sam Pzzigati's "Victory Over Terror" tax was an idea I haven't heard before.

The only negative mark from me is the lack of documentation or notes on sources.
Still a better book than it gets credit for being.
This book is worth reading.

This book makes many excellent points about too much corporate greed and corruption that contributed to the housing bubble. However, the conclusions are incorrect and because this is so important I cannot give this book any more than 1 star. The free market and a lack of regulation did not play any part in causing the housing bubble. The key culprit is the Federal Reserve central bank that is by its very nature disruptive to the free market process. Greed may have played its part and should not be downplayed, but the Federal Reserve is responsible for setting interest rates far to low for far too long and giving the power and money to Wal Street in the first place. Interest rates should be set by the free market in a true free market capitalistic economy. How can the free market be blamed when we have not had a free market? The Federal Reserve should be abolished because it creates the boom bust cycles that disrupt what would and could be a more prosperous free market. As the other 1 star reviews suggest, I also strongly recommend reading "Meltdown" by Thomas Woods.

This is a compilation of articles written between 1999 and 2008 - approximately. The most interesting are those that predicted the government bailouts for companies "too big to fail" and the housing market that was doomed to collapse at any moment. Each of these articles were written a few years BEFORE the crisis actually hit. This was 20/20 foresight at it's best!

This is a collection of opinion articles, (as opposed to facts) from your typical anti-freedom mouth organs in this country.

OK, so people were greedy. What made them disproportionately greedy now, as opposed to 5 or 10 years ago. Greedy people many times feel fear of loss and that fear checks their greed. Why is it that people had no fear? Well, when borrowing money is basically "FREE" from easy money policies of the Federal Reserve, you don't need to feel fear. You're risky activities don't cost anything to you.

But no where in this book is their any discussion of how the Federal Reserve's artificially low interest rates and easy money policies encouraged reckless behavior: Nothing about how the SECs stamp of approval discouraged private investigation of public companies: Nothing about the Moral Hazard of Fanny and Freddy buying up junk and not caring about the losses because they knew the FED would bail them out.

And then their CURE is bigger more intrusive government, and stifling on entrepreneurship -- the very people we need to start creative wealth to get us out of this mess.

Sometimes left of center books about the economy are interesting because they take on the corporate welfare, and how massive military spending hurts the economy. But this doesn't even have that redeeming quality.

Devoid of facts and research. This book is nothing but a compilation of hack jobs.

Tracy

P.S. Yes Wall Street got drunk. But government gave them the free liquor.

I am reading this book in October 2009 and unfortunately, none of these essays reveal or expound upon anything that hasn't been said or explained in great detail on almost every nightly news show, TV pundit show, wall street journal or supermarket magazine in the past year. Unfortunately, none of the essays are fresh or interesting because the crisis unfolded so quickly and we are still learning so much new stuff about it every week, the writing seems very stale-dated.