Welcome Jeff Madrick, and Host Max Fraad Wolff.

Age of Greed: The Triumph of Finance and the Decline of America, 1970 to the Present

Host, Max Fraad Wolff:

Age of Greed offers a long survey of the rise of regulation liberated financial markets and actors. The historical sweep is artful and well presented. The text argues for a return to more caged financial markets and actors. The steady and mounting pressures on the American middle class are correlated with the rising excesses, fortunes and missteps of financiers and their vehicles. The personal biographies are well chosen, convincingly presented and illustrative.

The deregulatory trajectory outlined in Age of Greed for finance could be applied to many other sectors as well. We have seen airlines, electricity, pharma, communication, media and many other industries be significantly deregulated. Finance is the preferred case study in excess over recent years. While there are many and strong arguments for this choice, the uniqueness of this sector is not its deregulation. Financial markets and actors have simply been an element of structural change in the American economy and polity.

As the middle class slips into the annals of history, finance has and continues to play a role. However, 30 years of stagnant wages, prevailing ideology among politicians and global business regulation are not all the work or effect of financial machinations. In nations and regions where financial firms/markets are much weaker we have seen similar trends. The question remains, are financial markets cause or effect of declining equality, wages and social democracy?

Jeff Madrick has made a well researched, well presented and thought through addition to a vital debate. The size of financial markets’ role in rising inequality of income, wealth and opportunity is still very much open to debate.

We look forward to exploring this and other themes in our book salon.

[As a courtesy to our guests, please keep comments to the book.  Please take other conversations to a previous thread. - bev]

130 Responses to “FDL Book Salon Welcomes Jeff Madrick, Age of Greed: The Triumph of Finance and the Decline of America, 1970 to the Present”

Max Fraad Wolff July 3rd, 2011 at 1:54 pm

Welcome all to what promises to be a lively July 4th Exchange of ideas vital to the health of America on her many future birthday celebrations.

BevW July 3rd, 2011 at 1:55 pm

Jeff, Welcome back to the Lake.

Max, Welcome back to the Lake for for Hosting today’s Book Salon.

Max Fraad Wolff July 3rd, 2011 at 1:57 pm

Always a pleasure, thanks to Jeff as well for a fine book!

Max Fraad Wolff July 3rd, 2011 at 2:00 pm

A a starter I thought I would throw out 4 host questions:

Host Q 1: Do you see the trends you outline intensifying or calming down during the election cycle?

Host Q2 Did you see change during the period where financial firms that received TARP monies were prevented from lobbying?

Host Q 3How satisfied are, or are you not, with Dodd Frank in its present state?

Host Q4 Do we need a complete overhaul of banking regulations, or corporate regulation more broadly?

speakingupnow July 3rd, 2011 at 2:04 pm

Is there ANY example from around the world that deregulation of a particular sector has resulted in major positive outcomes for the citizens of a country? If so, where and which sector? If not, why are the neo-liberals and “Friedmanites” allowed to continue their agenda without major pushback?

Jeff Madrick July 3rd, 2011 at 2:05 pm
In response to Max Fraad Wolff @ 1

Hello all,

Jeff Madrick July 3rd, 2011 at 2:06 pm
In response to BevW @ 2

Very glad to be here

Scarecrow July 3rd, 2011 at 2:06 pm

Welcome Jeff, Max

Been reading the great reviews and looking forward to the discussion.

As we saw in George Will’s column shilling for the Gretchen Mortgenson book, the great “debate” in DC seems to have come down to whether voters should blame Barney Frank — the do gooders for affordable housing — or Countrywide/Mazillo — the masters of greed and fraud — for the housing bubble and its collapse. Jeff obviously puts the focus on the greediest of the anti-regulatory crowd.

Is there anyway the nation can resolve that debate? Or have we already lost it?

Jeff Madrick July 3rd, 2011 at 2:07 pm
In response to Max Fraad Wolff @ 4

Not sure which trends you are referring to, Max. But it is surely not yet the end of the age of greed.

Max Fraad Wolff July 3rd, 2011 at 2:09 pm
In response to Scarecrow @ 8

Scarecrow?
These debaets rarely get resolved and dont usually hinge on the weight of historical and statistical evidence. Ideology and funding support are too important to the positions that various groups and individuals take on these matters.

eCAHNomics July 3rd, 2011 at 2:09 pm

Hi Jeff,

Stopping by to say hello. We used to talk when I was on Wall St & you were at various publications. IIRC, you were in charge of the BW annual forecasting contest the year I won it. (Cahn is surname, Rosanne.) It was mid-90s, I was writing about productivity as the substitution of capital for labor, owing to cheap capital and expensive labor (cost of medical benefits). Things haven’t changed much.

Anyhow, glad to see you are thriving and good luck on your book tour. I will read your book.

Quite a criminal enterprise on Wall St. these days!

Max Fraad Wolff July 3rd, 2011 at 2:10 pm
In response to Jeff Madrick @ 9

I had in mind the rise of finance aspect. It seems the financial sector, after a very rapid snap back from the early 2009 lows, has stumbled and no longer leads the way?

Jeff Madrick July 3rd, 2011 at 2:10 pm
In response to Max Fraad Wolff @ 4

As we know, there has been an overhwleming amount of lobbying against Dodd-Frank. There are fifty rules to be written for derivatives coverage alone. And there were 20,000 comments. No one is equipped to handle this. Whow wrote all those, do you think? Meantime, the House is uctting back the budget of the CFTC.

We do need a more complete overhaul. I think the Obama plan, which set the blueprint back in June 2009, was slight and poorly thought out. I am not sure I should go over right now what I am thiing about. But breaking up major institutions along product lines is probabloy required and never discussed… Then serious capital controls, and on…

Scarecrow July 3rd, 2011 at 2:10 pm

It’s encouraging to see Jeff focusing on the “free-market” defenders and Greenspan’s libertarian indifference to the subprime risks. But this narrative seems to be losing ground in Beltway discussions, given their tolerance for seeing even the Dodd-Frank regulations watered down or delayed. How do you account for the reemergence of the financial sector as “poor guys getting too much blame” so soon after they wrecked the economy?

Is the public just not well enough educated on how this happened? The wrong narratives have taken hold? The media is either dumb or complicit?

Jeff Kaye July 3rd, 2011 at 2:11 pm

Jeff, Would you say there is any correlation between the regulation of financial or corporate actions with the level of class struggle in a given society?

It seems that the Progressive movement in the U.S. of approximately a hundred years ago was a reaction to the Populist and Labor/Socialist/syndicalist movements in the U.S. at the close of the 19th century and early years of the 20th century. Likewise, the reforms of the New Deal and later the “Great Society”, not to mention the rise of social democracy reforms in Western Europe, appear related to the existence of the Soviet Union, and no matter what the reality of the latter, the appearance at the time of a massive state power that claimed to work for “the people” or the working class, had to be countered in the West. Hence, “the rise of regulation liberated financial markets and actors.”

Anyway, these are not hard theories with me, but hypotheses, and I have to admit I have not yet had a chance to read your book. I look forward to reading the dialogue with readers in the thread that unfolds today.

Thanks for coming here on this holiday weekend.

Scarecrow July 3rd, 2011 at 2:12 pm

Scarecrow is my blog name at FDL. My parents call me John Chandley, former attorney, former energy counsel/regulator, former consultant on electricity restructuring, etc. Mine is the least wierd name you will encounter today. Don’t let the names bother you.

Max Fraad Wolff July 3rd, 2011 at 2:13 pm
In response to Jeff Madrick @ 13

Does this mean you support Basel III with reserves rising with complexitity and assets/AUM at leading firms?

Jeff Madrick July 3rd, 2011 at 2:14 pm
In response to Scarecrow @ 8

Well, I am stunned by Gretchen’s book, frankly. Fannie Mae was corrupt. In fact, itos CEOs got swept up into the Age of Greed. But Fannie was a minor causal factor in the crisis. Even the Republican nomianted memebers of the Financial Crisis inquiry Commission agreed with the majority that Fanie may contributed but was not the main cause. It didn’t buy msot of the subprimes. When it di, i twas late. It did not buy any tranches of CDOs. Its own securities help up value while Wall Street was crashing. So the damage was done before Fannie and Freddie securities fell in value.

It is tragic nonsense that this idea has come forward again. And it certainly had nothing to do with the Community Reinvestment Act. Mortgages written under that were much safer than others.

This was Wall Stret greed, breaking the rules, pure and simple.

Max Fraad Wolff July 3rd, 2011 at 2:15 pm
In response to Scarecrow @ 16

No bother, liked the name and just figured I’d use it

Knut July 3rd, 2011 at 2:15 pm

Mr. Madrick, I’ve been thinking about the rising share of GDP being sucked up by the financial sector. How much of this is due to capital gains and insider trading (which one might assume are at least coarsely connected to market disequilibrium), and how much is due to increased monopolization of financial services, which has enabled the banking sector to take ever higher tolls on transactions (think of credit card fees, and foreign ATM fees, for starters). I can’t think of any other explanation of how presidents of small banks and credit unions can run away with several tens of millions for having packaged their institution into a saleable product to a bigger bank. If there were productivity gains, some of these would show up in lower, not higher fees. What is the market structure like here?

eCAHNomics July 3rd, 2011 at 2:17 pm

Ideology and funding support

Got that right. To quibble, however, it’s not ideology in a vacuum. It’s only the ideology that supports rich getting richer. Economics for the Rest of Us by Moshe Adler, points this out in several telling cases, like Pareto Optimality.

Jeff Madrick July 3rd, 2011 at 2:17 pm
In response to speakingupnow @ 5

I don’t think we should make sweeping claims that deregulation can never be good. Regulations can go out of doubt and they can be cumbersome. The deregulation of airline fares may be a mixed bag, but there is a reasonable clamim that many more can fly today tha in the past as fares plummeted (as did service, admittedly).

But the Soviet Union was in an extreme sense over-regulated. For a hile, central planning worked. Then it failed. So free markets are appropriate in some areas.

they are certainly not appropriate in financial markets, however. Anti-trust regulations cannot be widely dropped–which covers all industries–as they were. We can go on.

In general, govt oversight and vigiliance is a reuirement across the economic board. But sometimes oversight without rpecise regulations can be enough (again, usually not in finance, i don’t think).

Max Fraad Wolff July 3rd, 2011 at 2:18 pm
In response to eCAHNomics @ 21

I had the pleasure of doing that book salon as well and have also had some interesting chats with Professor Adler

Jeff Madrick July 3rd, 2011 at 2:19 pm
In response to eCAHNomics @ 11

Thanks for saying hello. I remember Roseanne quite well. things got a lot worse since last we talked.

Max Fraad Wolff July 3rd, 2011 at 2:19 pm
In response to Jeff Madrick @ 22

I woulda gree we are talking ranges and grey scales more than binary and black and white cases

Jeff Madrick July 3rd, 2011 at 2:19 pm

Seems to be repeating…

Scarecrow July 3rd, 2011 at 2:20 pm

It seems a central theme of Age of Greed is that the ethic driving this is so well entrenched as a matter of ideology in one party (and a matter of corruption in the other?), that it’s hard to think how we get out of the recurring cycles of risky lending, crashes, bailouts, rinse, lather repeat.

Do you see a way out? Or as Petraeus once asked, “tell me how this ends.”

Max Fraad Wolff July 3rd, 2011 at 2:21 pm
In response to eCAHNomics @ 21

A much sharper fellow than I once called ideology the imaginary way we see our real social conditions. I used the term in that sense.

masaccio July 3rd, 2011 at 2:21 pm

I particularly appreciate that you start with spoiled brats like Lewis Uhler. Raised in privilege by a father who hated FDR, proud to work for a John Bircher Congressman, he was an over-educated fool who thought that social programs and the progressive income tax would ruin the American spirit.

I knew some of these people when I was a kid in the late 50s and early 60s, and they were all quite crazy in their hatred for the New Deal, and evangelized anyone who would listen with their venomous hostility.

bmaz July 3rd, 2011 at 2:23 pm

Hi Jeff and welcome to FDL. Mr. Wolff asked you about Dodd-Frank and I agree with your answer. I would like to go a step further though in regards to the CFPB.

From my reading of the enabling language for the CFPB, a lot of the specified powers that would vest in, and potential powers that could be claimed by, the CFPB only flow if there is a confirmed director of CFPB. If there is no director, some but not all powers transfer to Treasury in the interim. Do you think the Administration has purposely dawdled and left the CFPB with not only no director, but not even a nominee for a position that becomes critical in less than three weeks? And how would that situation be exacerbated if the Secretary of the Treasury Geithner were to leave his post as well?

Jeff Madrick July 3rd, 2011 at 2:24 pm
In response to Scarecrow @ 14

Frankly, we’ve had inadequate leadership from Obama and most Democrats. Taht may be a sign that money talks too loudly in DC. The White house should be outraged, but for a while it acted as if had completed the regulatory mission. What naivete. Incomprehensible. Now the White House defends TARP and talks little about how little lending the saved banks are doing.

Back to Max’s point, I think part of the deleveraging process means that banks will not lend adequately. They will not lead us back to health vigorously. That’s where govt could vahe stepped in. We could have a reconstruction finance bank. We could have a new home lending facility without the errors in structure of Fannie. Instead. Obama and Geithner boast about how well they did–and how good TARP truly was. It did calm the markets, but it did not get the economy back. And the jobs crisis goes on.

Max Fraad Wolff July 3rd, 2011 at 2:24 pm

As another possible thread: Why so much continuity over all the administrations Reagan, BushI, Clinton, Bush II, Obama on FinReg?

eCAHNomics July 3rd, 2011 at 2:24 pm

Fabulous. I remember the salon only vaguely, and read the book months after. But whoever heard of Moshe Adler? He could never get a job at a first rank (I originally typed “rate” instead of “rank” but decided that how good a college is and how it’s ranked are often quite different) college bc he doesn’t hoe to the PTB line.

I particularly liked his section on labor which is in complete agreement with the way I think about the labor laughingly-referred-to-as market.

Scarecrow July 3rd, 2011 at 2:26 pm

Continuing with the Barney Frank vs Countrywide blame debate, these seem to be proxies for blaming consumers (and those who claim to work on their behalf) versus blaming creditors for bad loans/lending practices.

There’s been some discussion lately about looking at the current era as controlled mostly by the rentier/creditor class — from politics, to media, to institutions, to court decisions, etc — consumers are thus screwed. It that a fair way to characterize where we are?

e.g., see Greece: who is being bailed out? The Greeks? or its creditors? And whom are the IMF and ECB protecting?

Max Fraad Wolff July 3rd, 2011 at 2:26 pm
In response to Jeff Madrick @ 31

But once they cash the check and campiagn on TARP success it is less likely to get a change of course from them whatever happens in 2012?

Jeff Madrick July 3rd, 2011 at 2:28 pm
In response to Knut @ 20

This is truly one of the points least well repreented in the media–which is saying something. The persistent high profits of banks, if properly computed to include the ridiculous levels of compensation, would show on the face of it that Wall Street is a monoply-oligopy and probably worse. Anyone who knows trading, knows how easy it is to front run or closely follw the pack. Big palyers can push prices up, if temporarily. Inside information of one kind or other, sometimes even legal, gives Wall Steet lots of room to make outsize profits.

Allowing the derivatives market to trade secretly is one of the outrages of our time. So much to hide and be hidden.

No one in Washington is looking to closely at all that. Insider trading has at leat attracted some attention. So has misleading ivnestors with CDOs. But the more basic ways trader make money is not adequately discussed. The Feds need more examiners to watch over the markets on a random case by case basis–like an IRS audit. ishould go on to the next question.

eCAHNomics July 3rd, 2011 at 2:28 pm
In response to Jeff Madrick @ 24

Yes they are. I’m not a good forecaster bc I never anticipated things in the U.S. (things being both govt & biz) could deteriorate so much & so rapidly. Never saw the handwriting on the Wall St. when Raygun fired the ATCers. In retrospect, that was one of the first overt acts of the MOTU & PTB to take over & turn the citizens/voters into consumers whose vote doesn’t count bc only money matters in elections.

Is that why you chose the 1970s as your start date?

RevBev July 3rd, 2011 at 2:30 pm
In response to Jeff Madrick @ 31

Is this Admin the most obviously influenced by $$? There does not even seem to have an appearance of not being influenced, imho. Thanks

Jeff Madrick July 3rd, 2011 at 2:31 pm
In response to Scarecrow @ 27

Would love to know how it ends. I am sadly not an optimist. Partly, the nation did not suffer as much as it did in the Depression, because we learned and applied lessons from the Depression. But we sometimes forget that today we have no FDR, who was willing to stand up to interests. Not that he didn’t make mistakes, but he talked and walked the talk and the walk. We don’t avhe that today. And the media generally makes matters worse by giving an outlet to right wing people–you menionted Will–as if he is part of the center. The left, however, is tagged as outliers if not outright weird people.

eCAHNomics July 3rd, 2011 at 2:32 pm

Great Q. You can go back to Carter who started fin dereg by eliminating ceilings on interest rates banks could pay.

Otherwise the names you name are all Rs, so expected from them, except for Clinton, who installed Third Way, which equals Ds can be bought by rich campaign contributors too.

Jeff Madrick July 3rd, 2011 at 2:32 pm

nice quote

Max Fraad Wolff July 3rd, 2011 at 2:33 pm

2012 should be a grand slam for money in American Politics thanks, in part, to Citizens United?

Jeff Madrick July 3rd, 2011 at 2:34 pm
In response to masaccio @ 29

I sue Uhler as represenative of a way of thinking that was very much a minority in the 1950s and 1960s and then came to power. There ae many sotires in the book, and I think these stories together comprise a truer history of the period than having a single thesis. aBut the overriding thesis is the triumph of an ideology which swept up much of America.

Max Fraad Wolff July 3rd, 2011 at 2:35 pm
In response to eCAHNomics @ 40

We have seen Fin deReg on a very bipartisan basis since 1971 in many regards. True, sometimes faster and sometimes slower, sometimes cautious and gradual and sometimes wild and fast

Jeff Madrick July 3rd, 2011 at 2:36 pm
In response to bmaz @ 30

I think the failure ot nominate Eliz Warren reflects the defensive politics of this administration. They probably don’t think they can win, so they don’t do it. It would be quite wonderful if she were to head the new bureau. She is hardly a radical. Some of us might even think she is too centrist. But she is unuusally fair-minded and non-ideological. I don’t see much leadership from the White House. Whatever happened to moral outrage?

Max Fraad Wolff July 3rd, 2011 at 2:37 pm
In response to Jeff Madrick @ 39

We are certianly missing our modern Ferdinand Pecora:
http://en.wikipedia.org/wiki/Ferdinand_Pecora

Jeff Madrick July 3rd, 2011 at 2:39 pm

I think that’s the essence of my book. I talk about a couple of dozen people at length but they all shared a self-interested point of view and they gained power over time. That self interest was about weak financial regulation. But it was accompanied by a turn in ideology in America, and that is critical. American people are deeply distrustufl of govt. How and why that happened is one of the major historical questions of these times and the key determining factor for the future of America. This book tries to answer some of that. But to rpeat, as Max brings up, the same ideas ruled every adminsitration, Republican or Democrats, since Nixon…

Max Fraad Wolff July 3rd, 2011 at 2:40 pm

For those interested Pecora is a very interesting and little know character in financial regulation history:

From Wiki:
Ferdinand Pecora was appointed Chief Counsel to the U.S. Senate’s Committee on Banking and Currency in January 1933, the last months of the Herbert Hoover presidency by its outgoing Republican chairman, Peter Norbeck, and continued under Democratic chairman Duncan Fletcher, following the 1932 election that swept Franklin D. Roosevelt into the U.S. presidency and gave the Democratic Party control of the Senate.

The Senate committee hearings that Pecora led probed the causes of the Wall Street Crash of 1929 that launched a major reform of the American financial system. Pecora, aided by John T. Flynn, a journalist, and Max Lowenthal, a lawyer, personally undertook many of the interrogations during the hearings, including such Wall Street personalities as Richard Whitney, president of the New York Stock Exchange, George Whitney (a partner in J.P. Morgan & Co.) and investment bankers Thomas W. Lamont, Otto H. Kahn, Albert H. Wiggin of Chase National Bank, and Charles E. Mitchell of National City Bank (now Citibank). Because of Pecora’s work, the hearings soon acquired the popular name the Pecora Commission, and Time magazine featured Pecora on the cover of its June 12, 1933 issue.[1][2]

Pecora’s investigation unearthed evidence of irregular practices in the financial markets that benefited the rich at the expense of ordinary investors, including exposure of Morgan’s “preferred list” by which the bank’s influential friends (including Calvin Coolidge, the former president, and Owen J. Roberts, a justice of Supreme Court of the United States) participated in stock offerings at steeply discounted rates. He also revealed that National City sold off bad loans to Latin American countries by packing them into securities and selling them to unsuspecting investors, that Wiggin had shorted Chase shares during the crash, profiting from falling prices, and that Mitchell and top officers at National City had received $2.4 million in interest-free loans from the bank’s coffers.

Spurred by these revelations, the United States Congress enacted the Glass–Steagall Act, the Securities Act of 1933 and the Securities Exchange Act of 1934. With the United States in the grips of the Great Depression, Pecora’s investigations highlighted the contrast between the lives of millions of Americans in abject poverty and the lives of such financiers as J.P. Morgan, Jr.; under Pecora’s questioning, Morgan and many of his partners admitted that they had paid no income tax in 1931 and 1932; they explained their failure to pay taxes by reference to their losses in the stock market’s decline.

eCAHNomics July 3rd, 2011 at 2:40 pm

I’m reading a book on colonial America. Many of the same self-serving ideologies and treatment of regular people similar to what PTB trying to do today. Creepy how many “sounds familiar” I’ve written in the margin.

dakine01 July 3rd, 2011 at 2:40 pm

Good afternoon Jeff and welcome.

I have not had an opportunity to read your book so forgive me if you address this in there but I have my own little blog that I started a bit over a year ago , mainly to talk about the problems of the long term un and underemployed. It has morphed into me writing about the overall economy.

I am by no means an economist but am puzzled at the continual “economists were surprised today about X” writing that is part of the lede to so many articles on the whatever economic story of the day yet it is something that I, as an observer of the actual economy am not at all surprised by.

Why do so many economic writers keep going back to the same economists who have been wrong about so many things these last few years? Laziness? Limited rolodex? Limited imagination?

Scarecrow July 3rd, 2011 at 2:41 pm

It’s almost as though not having another Pecora was deliberate — instead they had a rather dull head of the Financial Crisis Commission. He was smart, but not the type that would command headlines. And I think that suited the Administration just fine.

Curious how you see the reign of Tim. If you were to write a sequel, does he join the list of villains, shills for greed, stooges for deregulation, or what?

Jeff Madrick July 3rd, 2011 at 2:42 pm
In response to eCAHNomics @ 37

I chose the 1970s becuse tht is when American attitudes towards govt changed. Americans are not free from blame. Some progressives like to think the rich people did it all to them. this is partly true. But Americans panicked in the 1970s with soaring inflation and unemployment, and those who blamed it on govt, liek Milton Friedman, about whom i write at length and I think somewhat originally, as Paul krugman suggested in a recent review, rose to prominence. the meida went with this. But so did many Democratic economists over time. I think it alls tarted bwteen 1973 and 1978. In 1973, Gov Ronald Reagan of California tried to get his state to cut income taxes. By 1978, they overwhelmingly apssed Porp 13 and the American tax revolt began.

eCAHNomics July 3rd, 2011 at 2:43 pm
In response to Jeff Madrick @ 47

The deep distrust of govt is fostered deliberately by those who govern. They are deliberately incompetent, and then turn govt failures into an election-winning strategy thru plenty of money for advertising. It’s quite a clever way to subvert democracy.

Jeff Madrick July 3rd, 2011 at 2:44 pm
In response to RevBev @ 38

I think they are not the msot influenced, but they are higher up there than they let on. It now costs unimaginable amounts of money to campaign, of course. so what dod you do? Of course, profound campaign law changes are required if democracy is to function properly again. But we won’t get it. The adm is already letting its members tak good jobs with indsury, which Obama suggested he would try to stop. We will see where Geithner now goes once he resigns.

masaccio July 3rd, 2011 at 2:45 pm
In response to Jeff Madrick @ 43

Among the juvenile Birchers I knew, not a single one went to Viet Nam. It was typical of their greed and selfishness, that they were both chickenhawks and cowards.

Jeff Madrick July 3rd, 2011 at 2:46 pm

yes, we are missing pecora, but that was a fluke of history. he put on a show. in the end, fdr’s courage ws more important, i think…

Jeff Madrick July 3rd, 2011 at 2:47 pm
In response to eCAHNomics @ 49

An important lesson of history is that Americ was never perfect. It solved some of its problems, but sometimes too late and often not well. But it solved enough of them over time to grow, and broaden prosperity and civil rights. Too many Americans take for granted that we will simply muddle through and America’s future is always special. It is not the case. And we are not solving our problems today.

Scarecrow July 3rd, 2011 at 2:48 pm

From the Krugman/Wells review of Age of Greed:

“Whatever the deeper story, however, Madrick’s subtitle gets it right: what we have experienced is, in a very real sense, the triumph of Wall Street and the decline of America. Despite what some academics (primarily in business schools) claimed, the vast sums of money channeled through Wall Street did not improve America’s productive capacity by “efficiently allocating capital to its best use.” Instead, it diminished the country’s productivity by directing capital on the basis of financial chicanery, outrageous compensation packages, and bubble-infected stock price valuations.”

This seems a telling indictment of the entire financial industry. They not only make themselves rich, but they do so at the nation’s expense and don’t even perform the most basic function of efficiently allocating capital and risk. Worse than useless; harmful. Yet we don’t see that message put out there often. And comments on why that is?

eCAHNomics July 3rd, 2011 at 2:49 pm
In response to Jeff Madrick @ 52

I think like 9/11, the PTB chose to rag endlessly about inflation of the 1970s bc it advanced their agenda to do so. Using fear to convince peeps of something that isn’t even close to being true. Today, you still hear the “inflation is coming, inflation is coming” fear refrain, even though the 1970s is the only post-WWII decade (now numbering over 6) when inflation was a longer-term macro problem. And its causes were the worst FRB prez ever (Burns), 2 supply-side oil crises, and Nixon’s price controls.

Max Fraad Wolff July 3rd, 2011 at 2:49 pm
In response to dakine01 @ 50

Economics has an orthodoxy. Outside the orthodoxy there is much and valuable work being done with little attention paid. Also much good “economics” has always been done by non-economists.

As to the idea we all got it wrong, you might find this little article from 2006 interesting:
http://www.atimes.com/atimes/Global_Economy/HI09Dj01.html

Jeff Madrick July 3rd, 2011 at 2:51 pm
In response to dakine01 @ 50

Not merely limited imagination, but laziness. On the other hand, they by and large choose from the middle and the right of the particular spectrum. The big media outlets are most comfortable with that. Only since the 2008 calamity have more ciritcal vocies been getting a hearing. Even krugman had rarely been asked on Meet the press or similar shows until the crisis. This is not only true in economics. Look at how often the same foreing policy experts who got us into Iraq are called back to the same influential Tv programs. Thank goodess the web gives access to many more people.

RevBev July 3rd, 2011 at 2:54 pm
In response to Jeff Madrick @ 61

Funny, it is commentary here what a regular feature J McCain is….wow. With nothing new to say.

dakine01 July 3rd, 2011 at 2:55 pm

While I do tend to write a bit mockingly of economists in general, I also know that there are many good economists that got things correct – it just seems that few of the ones who got it correct are listened to and the ones who got it massively wrong are still given pulpits to preach their gibberish.

Jeff Madrick July 3rd, 2011 at 2:55 pm
In response to Scarecrow @ 58

I think a lot of people don’t get it. I can’t believe how many times I am told that the CEOs of these organizations didn’t really know what was going on or they wouldn’t ahve done it. They may not have known how to contruct a CDo but they had to know that profits were coming too easy and that some securities rates triple A should not pay two or three percentage points more than others rated triple A.

But the reason I call it age of greed was that individuals could now make a fortune by breakng rules and make bad busines decisions. Self interst was rarely easier to maximize, and rarely did it do so much damage. The financial community misllocated hundreds of billions of dollars since the 1970s or certainly. That is a central theme of the book. the 2000s was worst, but the towering mismanagement of our precisou savings still goes unremarked in most places.

Max Fraad Wolff July 3rd, 2011 at 2:55 pm
In response to Jeff Madrick @ 61

There is also a cult of the few biggest names at the biggest schools that narrow and homogenize the range of voices and ideas that official economics offers. Look at how small a set of folks dominate at banks, regulators, advisers, pundits……

Knox July 3rd, 2011 at 2:57 pm
In response to Jeff Madrick @ 52

Americans panicked in the 1970s

There were serious crises in the ’70s, but it was the rich who used their influence to subvert the system starting with Reagan in the 1980s. Clinton’s biggest failure is that he thought he could use the rich for progressive ends, but the rich just got richer, better organized, and waited until they could strike. Bush and Obama dance so much alike because they have the same puppetmasters.

eCAHNomics July 3rd, 2011 at 2:57 pm
In response to Jeff Madrick @ 57

Exactly the lesson I take from the book. The U.S. qua empire is making all the usual hubristic empire mistakes and will go down in flames. That takes a long long time to happen though, since empires start out with such huge controls over resources & people; they can “afford” to waste a lot. The process seems irreversible, too, since once it begins, the PTB meet every failure by doubling down. Like the drunk at the party, they think that if they say it one more time and a little bit louder, surely everyone will understand.

In U.S. history, the exception seems the reversal of the Gilded Age. Both Roosevelts: TR on monopolies and FDR on New Deal. As you mentioned, going against their own class. I don’t know enough about that period of U.S. history to know how that happened, nor about the union movement in its formation. On the latter, all I know is that workers were willing to sacrifice their lives against Pinkerton thugs. Nothing like that apparent in U.S. today, nor any leaders that hold a candle to the Roosevelts (their other manifold shortcomings notwithstanding).

Jeff Madrick July 3rd, 2011 at 2:58 pm

In truth, Max, i think few economsits really foresaw the depth of the financial crisis. That is because msot are not institutionalsits but still seek generalized patterns and so on. I doubt one well-known economist really knew what a CDO was or a synthetic CDO, and how dangerous they were–perhaps not even Roubini. Yes, there is good work going on, sometimes even within the orthodoxy, but there is a tendency to over-generalization and neglecting the particulars. Some friend of mine were sounding wrnings presicently about housing. But the degree of corruption on the Street–or let us call it, breaking the rules–was not adequately diagnosed in general.

Scarecrow July 3rd, 2011 at 3:00 pm
In response to Jeff Madrick @ 64

Your book covers several financial/economic collapses, bailouts, return to business as usual, etc. Do you see us in a perpetual loop? Or does the next crash down the line become so egregious (it wasn’t already?) that the entire ethic blows up and we do something . . . different? What’s the next “age”?

bmaz July 3rd, 2011 at 3:00 pm
In response to Jeff Madrick @ 45

Thanks for the answer and no clue what happened to outrage, at least as to voices that can make it count. Will add that, while I agree about Liz Warren, it is NOT just that she is not in, it is that nobody is and from my reading of the enabling language, this is a hole into which a LOT of the good powers will be lost into, never to be retrieved.

That said, I will ask the question that often gets asked of me: What should we do?

Don’t worry, I have no great answer either…..

Jeff Madrick July 3rd, 2011 at 3:01 pm
In response to Knox @ 66

I think you neglect the ideological turn in America. The rich did not elect Reagan. He took advnatage of deep discontent and distrust. he was a believer, but an abusrdly simplsitic one–and his ideas did line his own pocket. He loved his GE appliances and so on, and his so0called ranches. He got rich while in office. I talk about how in the book. But this is not a black and white sotry of the rich versus the rest–althought the fight against Dodd FRank is now indeed approaching that.

David Kaib July 3rd, 2011 at 3:02 pm

I read your answer above to say you did not know how this will end, but how about how it could end? Is there any way out?

Max Fraad Wolff July 3rd, 2011 at 3:02 pm
In response to Jeff Madrick @ 68

Sadly, there is some truth there. Having done some work with Setzer and Roubini;s RGE I know we discussed particulars and I did some work on DCO and CDo squared, CPDOs and CDS that was critical in 2006. It went nowhere. LIke last year’s work on state and local budgets and this years work on Student loan debt default it will take a while?

eCAHNomics July 3rd, 2011 at 3:02 pm

AEA did a survey and only something like 5% self-identified as neoliberals. The author of the article that wrote up the survey castigated the 95% for being so backward. H/T Yves Smith. I’ve got a paper copy of the survey writeup in a pile somewhere, so I might be able to find it if you want me to try.

The problem with the 95% is that they don’t speak out. They have no leader, no public presence. Krugman is a very poor example of a public intellectual on the “left” bc he too does not want to burn his bridges with the PTB. After all, as he typed here on a book salon in 12/07, (Keynes denier) Bernanke is the one who hired him at Princeton.

Jeff Madrick July 3rd, 2011 at 3:03 pm
In response to Scarecrow @ 69

This crash should have been enough. but we needed exceptional leadership from Obama and we didn’t get it. I am hoping people across the country are more open to getting involved in lcoal political organizing. The only chance for change may be from the bottom. (We had Sptizer for a while. He swelf-desructred. But they also went after him.)

In general, as I say, it is now hard to be optimistic.

Knox July 3rd, 2011 at 3:06 pm
In response to Jeff Madrick @ 71

I think Reagan after he was elected became more a puppet to Ayn Rand- and Milton Friedman-loving Goldman-Sachs types than you’re letting on. Initially, they just wanted too much influence. By George W. Bush, they had taken over. It might not have started out as a black and white story of the rich versus the rest, but that’s what it’s become.

RevBev July 3rd, 2011 at 3:06 pm
In response to Jeff Madrick @ 75

Ironic…like the current headlines….a woman made him do it.;)

Jeff Madrick July 3rd, 2011 at 3:06 pm
In response to DavidKaib @ 72

I think there is a lot America could do. We need serious govt invesment in education and infrastructure and health, a significant job-creating program, more dicussion about how to slow offshoring of jobs. WE msut profoundly reform healthcare.

But this is a big agenda. The Tragedy is we are a low taxs state and we can afford to raise taxes without undermining economic growth to pay for it. Obama’s capitulation on the budget balancing issues was truly sad. That is a folly.

Jeff Madrick July 3rd, 2011 at 3:08 pm
In response to Knox @ 76

Don’t agree on rEagan. his ideas were set earlier. pls read my chapter on him.

Max Fraad Wolff July 3rd, 2011 at 3:08 pm
In response to Jeff Madrick @ 75

People have to realize the devil- literally- is in the detail and the financial and economic matters are front and center. This usually happens as assumptions of comfort and stability decline. Thus, we are likely to see more interest from the kids of the former middle class, unless they give up altogether

selise July 3rd, 2011 at 3:09 pm
In response to Jeff Madrick @ 68

That is because msot are not institutionalsits…

who, in your opinion, are today’s best institutionalists?

eCAHNomics July 3rd, 2011 at 3:09 pm
In response to Jeff Madrick @ 68

I was long gone from Wall St by the time the fin crisis hit, but I left at the peak of the dot-com bubble and knew for a fact it was a bubble of major portions. Didn’t hesitate to say it. La la la la, I don’t want to hear it was the only reaction I got. You don’t need to know the specifics (which I didn’t) to recognize the general. But Wall St won’t listen bc they know if they get in trouble the U.S. taxpayer will bail them out. It’s a grand moral hazard downward cycle. No reason for Wall St to behave.

They certainly didn’t during dot-com, which was a shadow of the fin meltdown not quite a decade later. I contributed to a standing Wed morning “risk” meeting chaired by Brady Dougan, then head of equities at CSFB, now head of Credit Suisse. He might have slept thru the 7:30am meeting for all the attention he paid. The meeting was just window dressing for doing the same-ole same-ole until the system broke, then firing employees & getting bailed out saved the day for him.

Jeff Madrick July 3rd, 2011 at 3:09 pm
In response to RevBev @ 77

well, there’s some truth to that regarding nancy. she was well off and her step dad very conservative. Reagan initially resisted her but he saw the hand-writing on the wall. nicer to be with the rich than against them. but all that happened in the early 1950s (and to some degree the alte 1940s).

David Kaib July 3rd, 2011 at 3:10 pm
In response to Jeff Madrick @ 78

I think your point above about organizing at the local level hits it on the head. While the problems may be national, I do not see a way politically to win at that level absent some real change from below. And in the short term, there is far more opportunity to get some states to start moving on this agenda than at the federal level.

Jeff Madrick July 3rd, 2011 at 3:11 pm
In response to selise @ 81

I should have a good list. I wil try to come up with one fo solid institutionalsits. At the New School we have lance Taylor. He is old-school institutionalist and very good. he has a new book, Maynard’s Revenge. To serious scholars, certainly worth a look… There are some interesting European scholars as well.

Max Fraad Wolff July 3rd, 2011 at 3:12 pm

http://www.huffingtonpost.com/max-fraad-wolff/decision-2012-urgent-and-_b_854245.html

Inequality is always worth a few words as result of all this. Some recent numbers above.

selise July 3rd, 2011 at 3:13 pm
In response to Jeff Madrick @ 85

thanks. will look forward to your list.

Jeff Madrick July 3rd, 2011 at 3:13 pm
In response to eCAHNomics @ 82

I think, Roseanne, the high tech bubble was more obvious. The bubble in mortgage securities was much more complex. it wasn’t only subprimes or the “wealth effect’ taht were the problems but a remarkabl pyramid of bad debt. The high tech crash didn’t really crash the economy, either… of coruse Greenspan came to the rescue and created the mortgage bubble.

Jeff Madrick July 3rd, 2011 at 3:13 pm
In response to DavidKaib @ 84

i think people shouldn’t discount local power.

RevBev July 3rd, 2011 at 3:14 pm
In response to Jeff Madrick @ 83

Thanks…He learned well, didn’t he?

selise July 3rd, 2011 at 3:14 pm
In response to Jeff Madrick @ 78

The Tragedy is we are a low taxs state and we can afford to raise taxes without undermining economic growth to pay for it. Obama’s capitulation on the budget balancing issues was truly sad.

you think we should be raising taxes?

Knox July 3rd, 2011 at 3:14 pm
In response to Jeff Madrick @ 79

Reagan might have been the choice of Whitehead and others precisely because his ideas were set in their favor before taking office in 1981. He had been trying to ingratiate himself to wealthy supporters at least a half decade earlier. I’ll have to read your chapter on him to get a fuller perspective.

RevBev July 3rd, 2011 at 3:16 pm
In response to Jeff Madrick @ 89

And the threat in what is happening to kids’ education may be great incentive. The threat is pretty wide spread.

Knox July 3rd, 2011 at 3:17 pm
In response to selise @ 91

Raise taxes. Another stimulus package. Jobs. Jobs. Jobs.

No?

Jeff Madrick July 3rd, 2011 at 3:18 pm
In response to eCAHNomics @ 67

there was the progressive period, but then a partial reversal in the 1920s, only to be seriously reinvigorated by the new deal. but in earlier years, there was the age of jackson. jackson, who was no perfect man,even favored the rights of squatters to their land. before that, at the local level, state govt’s defied the national hesitation for the tgovt to invest (led by jefferson, who also was changing) by bulding the canals. local govt built the school houses, a remarkable achievement. later, loca govt santizied the cities, again remarkable. high school grad rates expanded rapidly in the early 1900s, expecially for women. Ameicna history is full of bold solutions–but also tragic setbacks and long hesitations to get it right. slavery is still our tragic flaw.

now, hwoever, we may indeed be in decline. nations do decline and unless amerians wake up to that possibility, and abandon simplsitic optimism, they will noit solve problems this time around…

eCAHNomics July 3rd, 2011 at 3:18 pm
In response to Jeff Madrick @ 88

The “tell” in fin crisis was home prices, and if you peeled one layer back from that you pretty quickly got into the sewers of the kinds of mortgages that were being made. (I was otherwise engaged, learning about terrorism, etc, after 9/11, so I did not personally do that. But that’s what I’ve learned from reading about it.)

Besides, by 2007, you also knew for a fact that any time the economy got into trouble, Greenspan would create the next bubble. His pattern was entirely clear (1998 piece I wrote after LTCM bailout was “Beginning the Next Bubble). So looking for where the bubble was should have been high on everybody’s list.

Jeff Madrick July 3rd, 2011 at 3:19 pm
In response to Knox @ 92

o yes, the rich backed him in california after his 1964 speech supporting goldwater, and ever after. many of them, especially the california conservative rich, made him their man. see book…

Jeff Madrick July 3rd, 2011 at 3:21 pm
In response to selise @ 91

yes, we have to raise taxes but not right now. onlywhen the economy is back (except on the very rich, where tax increases won’t result in lower spending)… the need to balance the budget is exaggerated, but down the raod we need tax revenues to ivnest and maintain and EXPAND social programs

Jeff Madrick July 3rd, 2011 at 3:21 pm
In response to RevBev @ 93

it’s the inequality of public education that is so tragic

selise July 3rd, 2011 at 3:22 pm

jeff, does your book focus on financial deregulation in the usa, or do you also include global financial deregulation?

independentvoternews July 3rd, 2011 at 3:22 pm

Definition…

Kleptocracy; a nation ruled by theives.

Jeff Madrick July 3rd, 2011 at 3:24 pm

i can’t say i support basel III specifically so hard to measure the true quality of assets. but i do support serious capital requirements,especially if we don’t break up the big institutions, which are rife with conflicts of interest. i do not worry so much about too big to fail but those conflicts of interest, on the one hand, and over-speculation and herd beavhior, on the other, no matter one’s size…

Scarecrow July 3rd, 2011 at 3:25 pm

Some of the book’s major villains were CEOs of Citi/Citigroup, etc — and you single out Weill and others for deliberately challenging Glass-Stegall by letting the casinos merge with the dull bankers. They repeatedly crashed economies and the bank, and repeatedly got bailouts in the guise of bailing out the country/debtors they tanked.

Do you see parallels today, eg. Comcast and NBC, AT&T and Mobile One, etc, directly challenging antitrust laws, greasing it with campaign money (or making an FCC commissioner you next governmental affairs VP) — actions so brazen in another time they would be unthinkable, but likely to succeed now because everyone who understood the rationales for the regulatory structure are gone? How could we have forgotten so much of our own history?

Jeff Madrick July 3rd, 2011 at 3:25 pm
In response to selise @ 100

i focuse mostly on the USA. and thebook is a history, with implict solutions, but not a boo of solutions obviously, as markets are global regulation must alos go global. but far easier to say than to do. i think the fear of losing biz to low-regulatory states is exaggerated. one of the great erros is to fail to recognize the regulations, well done, strengthen markets and capitalism in general, they don’t weaken them…

Jeff Madrick July 3rd, 2011 at 3:26 pm

there is something of that

Max Fraad Wolff July 3rd, 2011 at 3:28 pm
In response to Jeff Madrick @ 102

I am much more worried about too big to bail, see Iceland, Greece, California, US Mortgages… than too big to fail.

I do think Teir I raises- properly delinated- offer a buffer against rising NPL and gearing above 5x, hallmarks of asset writedown cascade?

RevBev July 3rd, 2011 at 3:28 pm

You are a great guest; I know so little of this. Your book looks very interesting, if not scary.

Jeff Madrick July 3rd, 2011 at 3:29 pm
In response to Scarecrow @ 103

I think monopoly and oligoply are major unexamined arease in America. You named a few. Remember when we broke up AT&T for being the major telephone company into about eight regionals? Now we have only two telephone companies again. the list goes on. I ahve a chapter about Walton. Steve ross and ted turner that address the pursuit of size as the strtegy of the era. it became far easier to do that as finance grew more powerful, and junk bonds and aggressive banks finaced mergers, LBOs and hostile takeovers… DC was nowhere to be seen. Reagan helped get that ball rolling by gutting the anti-trust regulatory bodies.

Jeff Madrick July 3rd, 2011 at 3:31 pm

my take is we will alwyas have too big to bail if we have runaay specualtion and lack of margin requirments, etc, as in derivatives… to repat, the sie issue for me is that these instituioosn think they are diversified so they can take on much more risk, and tha risk is corrupted by conflicts of interst, meaning the eggs go more into one basket than is realized…

Jeff Madrick July 3rd, 2011 at 3:32 pm
In response to RevBev @ 107

thanks for saying that, Bev. i hope people read the book. It cannot be summarize with a few theses. It is story after story, accumulating over time. And thanks to Max for great questions.

selise July 3rd, 2011 at 3:33 pm
In response to Jeff Madrick @ 98

the need to balance the budget is exaggerated, but down the raod we need tax revenues to ivnest and….

hmmm….. don’t think i buy the logic of tax revenues to fund fed govt spending (other than to manage private sector demand in order to make real resources available to public sector without too much inflation).

if there is a compelling explanation you can recommend, i’d very much appreciate a link / reference to read.

Max Fraad Wolff July 3rd, 2011 at 3:34 pm
In response to Jeff Madrick @ 109

THe VaR models institutionalized that practice on the Wriston financial supermarket model. THe Economic Risk Capital Models are better with enhanced Basel III and some registration requirements on OTC interest rate and currrency synthetic product.
The question is enforecment and is that enough?

Scarecrow July 3rd, 2011 at 3:34 pm

The terms “extend and pretend” have been used to describe the Administration’s policy towards not making the banks book their mortgage-based losses, and thus driving their ineffective (deliberately?) programs for mortgage relief. Some see it as another hidden back door bailout. Where does this line up with the attitudes towards financial regulation that the book is describing?

Max Fraad Wolff July 3rd, 2011 at 3:35 pm
In response to Jeff Madrick @ 110

The book is well written and the story real moves- as well as being moving. I got through a good portion on a round trip to Hong Kong.
Its well worth the time it will be on my syllabus in the Spring semester finance course at the New School

selise July 3rd, 2011 at 3:35 pm
In response to Jeff Madrick @ 104

thanks.

btw, this bit sure sounds like a pro-institutionalist perspective to me:

one of the great erros is to fail to recognize the regulations, well done, strengthen markets and capitalism in general, they don’t weaken them…

Max Fraad Wolff July 3rd, 2011 at 3:44 pm

Link to Web sites and heterdox economists:
http://www.hetecon.com/

selise July 3rd, 2011 at 3:46 pm

jeff’s book looks very interesting and i’d like to know more about the history (last few decades) of financial deregulation.

Scarecrow July 3rd, 2011 at 3:47 pm
In response to selise @ 115

The CW view of electricity restructuring is that it “deregulated” the industry. That view comes largely from the Enron mess in California. But the rest of the country didn’t repeat most of those design mistakes. My experience was that the rest of the “restructured” part of the nation’s grid created a vast regulatory structure for the wholesale market (retail choice was done separately, and sometimes strangely). The regulations and oversight imposed on the wholesale market, complete with an independent grid operator and independent market monitor monitoring every bid into the hourly auctions, make Liz Warren look like a free market zealot. Most people have no idea about this.

BevW July 3rd, 2011 at 3:47 pm

As we come to the end of this great Book Salon,

Jeff, Thank you again for stopping by the Lake and spending the afternoon with us discussing your new book and the greed on Wall Street.

Max, Thank you very much for Hosting today’s great Book Salon.

Everyone, if you would like more information:

Jeff’s website and book

Max’s website

Next week:
Saturday – Glenn Carle, The Interrogator: An Education
Hosted by Marcy Wheeler

Sunday – Jonathan Hafetz, Habeas Corpus after 9/11: Confronting America’s New Global Detention System
Hosted by Dahlia Lithwick

Just quick reminder:
Membership drive! Are you an FDL member? If not, please join and help keep FDL delivering kick ass activism and independent journalism. You can join
HERE.

Thanks all,
Have a great evening and Fourth of July!

Max Fraad Wolff July 3rd, 2011 at 3:47 pm

The lessons of the last 4 decades and of Age of Greed take a while to filter in. That said, I do think the public is much more leary of both big government and big corporate interest than in many other eras. The question will likley be where do we do with this as a nation.

It remains unclear and such things are always very. very hard to know.

It will take years to normalize housing and consumer credit. Thus these debates will fill the fron pages of newspapers and lead off TV news coverage for years.

Max Fraad Wolff July 3rd, 2011 at 3:49 pm

Thanks to all- Bev you run these like a top!

It is always a pleasure.

See you all next time. Be well and keep reading!

MAx

Max Fraad Wolff July 3rd, 2011 at 3:50 pm

Happy July 4th!

Scarecrow July 3rd, 2011 at 3:51 pm

Thanks much to Jeff for a great book — highly recommended — to Max for hosting and to both for answering our questions. Important, timely discussion.

selise July 3rd, 2011 at 3:54 pm

thanks jeff, max and bev.

selise July 3rd, 2011 at 3:57 pm
In response to Scarecrow @ 118

Most people have no idea about this.

thanks. that certainly includes me.

AitchD July 3rd, 2011 at 4:18 pm

Very impressive book salon, thanks to all.

Will someone (please!) write a book about how the Interstate Highway System plus indoor shopping malls plus cable tv transformed the US from being a society into being an economy but too soon, before it had begun to master and perfect itself as a society? (Want a metaphor? The asteroid that wiped out the dinosaurs and most other life forms.)

marymccurnin July 3rd, 2011 at 5:43 pm
In response to AitchD @ 126

Interstate Highway System

Seems the Interstate Highway System helps isolate us from one another. We drive around in our mobile living rooms and don’t communicate. Perhaps the mass transit systems in Europe help to create a sense of community which morphs into “rebellion” when it is necessary.

seaglass July 3rd, 2011 at 6:01 pm
In response to eCAHNomics @ 53

I’d like to think its clever but that’s actually giving these people too much credit. I prefer to believe from what I’ve seen they’re just corrupt and incompetent to boot and things just seem like its some kind of plan. the truth is the only plan I can surmise is to grab with both hands as much $$ and benefits as they can from anyone or everyone. No plan just greed and power drives them.

papau July 3rd, 2011 at 7:24 pm
In response to AitchD @ 126

– Getting the truth is almost hopeless these days – and the inter-state road system is a good illustration of that.

Generations have been taught it was Ike’s great domestic contribution – and Ike said in his book “At Ease” that his big idea came to him when he saw the autobahm, in effect claiming he originated the idea.

All nonsense. In the 1920′s going across the states required a couple of spare tires plus boards on the roof to get you out of being stuck plus having a mechanic and spare parts along for the ride. Folks wanted better roads – fellow with a 6th grade education but with money from selling cars in Indiana pushed hard and loudly – others studied the problem and proposed limited access roads and multiple lanes and a center divider – and then finally there was political action – but it was initiated by FDR despite no one really putting pressure on him to do so. He order the first Federal Study and plan for a coat to coast, north to south border, interstate system – even drew on a map the first 6 roads he wanted built.

By the way – this has been an excellent salon – I learn a lot and was wise enough to notice that I could add no value – and did not need to try given the fantastic FDL crowd that was on the thread.

These book salons are one of the best parts of FDL!

AitchD July 3rd, 2011 at 8:44 pm
In response to papau @ 129

There’s a kernel of some low-hanging truth in this Wikipedia article about the Lincoln Highway (US 30), starring FDR and DDE.

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