Busting the Bankers' Club
Finance for the Rest of Us
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- $18.99
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- $18.99
Publisher Description
An eye-opening account of the failures of our financial system, the sources of its staying power, and the path to meaningful economic reform.
Bankers brought the global economic system to its knees in 2007 and nearly did the same in 2020. Both times, the US government bailed out the banks and left them in control. How can we end this cycle of trillion-dollar bailouts and make finance work for the rest of us? Busting the Bankers' Club confronts the powerful people and institutions that benefit from our broken financial system—and the struggle to create an alternative.
Drawing from decades of research on the history, economics, and politics of banking, economist Gerald Epstein shows that any meaningful reform will require breaking up this club of politicians, economists, lawyers, and CEOs who sustain the status quo. Thankfully, there are thousands of activists, experts, and public officials who are working to do just that. Clear-eyed and hopeful, Busting the Bankers' Club centers the individuals and groups fighting for a financial system that will better serve the needs of the marginalized and support important transitions to a greener, fairer economy.
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In this incisive chronicle, Epstein (The Political Economy of Central Banking), an economics professor at the University of Massachusetts, Amherst, surveys how deregulating banking turned the financial institutions into engines of inequality and liabilities to the economy. In the wake of the 1929 stock market crash, Epstein writes, New Deal reforms—most notably the Glass-Steagall Act, which "broke up the financial conglomerates by separating investment banking from commercial banking"—reined in banks' ability to make risky investments and inaugurated decades of relative stability. However, corporate lobbyists succeeded in rolling back regulations from the 1970s through the end of the century, culminating in the 1998 repeal of Glass-Steagall, which made it easier for banks to push "highly speculative and risky financial products" and precipitated the 2008 financial crisis. Epstein outlines an ambitious slate of reforms, including the establishment of public banks, which he suggests will be disincentivized from risky behavior by their not-for-profit status. Other recommendations to "break up the banks by separating investment and securities activities from deposit taking and lending" and rein in private equity by "limiting the use of debt in buyouts" offer a robust plan for regulation, and Epstein's skill in describing financial matters plainly is a boon. Epstein convinces with this potent plan for ending the era of "too big to fail."
