13 Bankers

Huffington’s announcement and review are here. Huffington, of course, is widely known as a leader of the progressive wing of the Democratic Party. But one main point of her review is that our book has real bipartisan appeal:

“You know a book is onto something when, even in these politically polarized times, and dealing with a hot button issue like financial reform, it features side-by-side praise from both Jim Bunning and Alan Grayson. Yes, that Jim Bunning.”

The great thing about the selection is that the Huffington Post will host a month-long discussion of the book, including external bloggers and commentators, some of whom no doubt will disagree with some or all of the book. Our first post in the series will be out tomorrow.

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Katie Benner has a review of our book in Fortune complete with a huge picture of me (the same picture everyone has). It starts not too promisingly: “Of all the books about the financial crisis, 13 Bankers: The Wall Street Takeover and the Next Financial Meltdown, is the least sexy.” (Hey! I always wanted to write sexy books.) But Benner means that as a compliment: “This staid looking text holds an explosive idea: Wall Street has hijacked our government. And without a total overhaul, taxpayers will endlessly foot the bill for its sins.”

Benner focuses on one of the central ideas of the book:

“While politicians debate minutia, Johnson and Kwak say they’re not addressing the real problem. Until the banking sector is a much smaller segment of our economy, banks will always have too much power. And as long as basic economic functions like mortgages and car loans depend on subsidizing their risky activities, we’ll keep bailing them out.”

This, we think, is the central problem. Breaking up big banks is our recommended solution, but that’s open to debate. But our main goal is to get people to agree on what the problem is.

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Hardy Green provides a good summary of the book at DailyFinance.

Our friend Mike Konczal gives us credit for going back beyond the housing boom or the invention of the credit default swap to look at the larger historical phenomenon of deregulation and the confluence of “the financial and the elite classes.”

David Markel writes what may be my favorite review yet at The Aleph Blog. This is my favorite part:

“Simon Johnson and James Kwak write a popular blog, The Baseline Scenario.  They have written a  very credible book on the crisis, which I have.  It covers all of the bases in a methodical way, and there was little with which I could find fault, and it does so without conspiracy-mongering, or name-calling, while still finding fault with a great many parties.”

You see, David Merkel is a very knowledgeable blogger, and he is not afraid to call a spade a spade. And so “there was little with which I could find fault” counts as a real compliment to me.

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Jeffrey Garten of the Yale School of Management writes a review that focuses on what I think is the heart of the book:

“What [13 Bankers] does do, uniquely, is provide a clear and compelling account of the evolution of the relationship between Wall Street and Washington from the days when Thomas Jefferson and Alexander Hamilton argued over how fragmented or centralized America’s banking system should be. It provides the essential context for understanding how the financial and the political worlds in America came to interact as they do, and how Wall Street and all it has stood for—free markets, constant innovation, the glamour of personal wealth—came to dominate American politics so heavily in the past 30 years.”

Continue reading →

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The Daily Kos graciously gave us a front-page review, written by Devilstower, this morning. Actually, it’s less a review of the book itself than a serious, accurate synopsis of and reflection on the economic and political situation we describe in the book.

I think that Devilstower and we share a common assessment of the situation. Some other reviewers have focused on the specific proposal we make in the last chapter to break up big banks. Here’s what Devilstower has to say:

“The trouble with that solution is that, thirty years on from ‘morning in America,’ America has forgotten what reasonable regulation looks like. Reagan-Rand-Greenspan-Gramm economics defines our limits. . . . Even though we can directly point at the deregulations that allowed this cancer to grow, suggesting that we need to put those regulations back is now viewed as a shockingly radical idea by bankers, economists, and politicians who’ve somehow become convinced that ‘unregulated free markets’ are somehow engraved in our constitution. The regulations being put forth by Senator Dodd have as much chance of stopping the next round of speculation and collapse as a Dixie cup does of holding Niagara.

“Preventing another massive meltdown doesn’t just demand that we roll back deregulation. It demands that we roll back the kind of thinking that led to deregulation.”

While I believe in the merits of breaking up big banks, I agree that it will be politically impossible until we break up the ideology of financial deregulation. Even if the administration were to agree with us all of a sudden, which I don’t expect to happen, it would still have to contend with 41 Republican senators (and a fair number of “moderate” Democrats). And so while I want people to read that last chapter, it’s really less important than the story of the political shift that happened over the past three decades.

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