Review by Choice Review
Readers who wildly believe that a conspiracy of bankers (the so-called Bankers' Club)--its members including not only the banking giants but also Wall Street financial institutions, the financial industry in general, and government financial regulations, including the Federal Reserve--dominates the US economy will have their fantasies confirmed in this title. Further, Epstein (Univ. of Massachusetts) contends that this powerful conspiracy controls the US political system through its lobbying power, and is either the cause of or a major contributor to almost all the issues plaguing the United States. (This book hardly mentions the world financial system, but it's not difficult to expand Epstein's thesis internationally.) However, more mainstream academics will find this book a frustrating fantasy. Of course, Epstein's policy reforms are fantastical as well: if the Bankers' Club is all-powerful, then serious reform attempts to sterilize its power are doomed. Epstein is not naïve and more-or-less admits the truth of this statement, but remains optimistic that chewing away at the margins will, over time, lead to significant reform. Dream on! Summing Up: Optional. Graduate students and faculty only. --Jonas Prager, formerly, New York University
Copyright American Library Association, used with permission.
Review by Publisher's Weekly Review
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." (Jan.)
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Review by Kirkus Book Review
An economics professor catalogs the countless ways in which the financial system fails ordinary consumers while favoring the wealthy. "Finance," writes Epstein, "is an essential and highly productive part of our economic system; but the financial system can also be a source of stagnation, instability, inequality, and crisis." The essential inequities in the system have been laid bare at several points, but especially in the financial crisis of 2007-2008, when many corporations and financial institutions walked away unscathed at a cost to taxpayers of $50,000 to $120,000 per household--and not the mega-wealthy households, you can be sure. Some systemic fundamentals are simply off, Epstein shows: A speculator hedges on whether a stock's value will rise, not whether the company behind it is successful or failing, ethical or criminal. Interestingly, he notes, the long period between 1945 and 1980, marked by stable but constant growth with almost no financial crises across the globe, ended in the turbulence of the Reagan era and beyond--when, by no coincidence, regulations on the financial industry were abolished or weakened. The bankers' club of Epstein's title has flourished on the backs of consumers, abetted by policy suggestions from influential economists, who "were not just innocent bystand-ers: they helped to bring on the catastrophe." To counter these complex problems, the author proposes thorough reforms of many kinds, including the imposition of a new round of regulations. More comprehensively, Epstein encourages an expanded public banking sector--shorthanded as "banks without bankers"--that, in truth, are devoted less to private profit than to providing low-cost services and low-interest loans to encourage small-scale investments, greater availability of higher education to low-income students, construction of affordable housing, and the like. A cleareyed view of the financial system's woes, all addressable if only the political and economic will is there. Copyright (c) Kirkus Reviews, used with permission.
Copyright (c) Kirkus Reviews, used with permission.
