PREDATOR NATION: CORPORATE CRIMINALS, POLITICAL CORRUPTION, AND THE HIJACKING OF AMERICA
By Charles H. Ferguson
THE UNFAIR TRADE: HOW OUR BROKEN FINANCIAL SYSTEM DESTROYS THE MIDDLE CLASS
By Michael J. Casey
Say what you will (pro or con) about the Occupy Movement, their catchy slogan – We Are the 99% – did raise public awareness about the fact of growing economic inequality. In the United States, the wealthiest 1 percent now possess a third of the nation’s wealth. Over the last 25 years, four-fifths of all income gains have gone to this top percentile, while for the middle class real wages and income have actually dropped. The result is a level of inequality not seen since the eve of the Great Depression.
How did we get here? This is a question that is especially pressing after the financial crisis of 2008, which clearly demonstrated that the new masters of the universe sitting on top of the global financial pyramid were involved in wheeling and dealing that had little broader social or economic benefit. Instead of manufacturing things, investing in jobs and education, or building infrastructure, the economy had become a giant casino.
These two new book try to explain what went wrong and suggest some ways out of the current mess.
Far from being a surprise, the growth in inequality has been the natural result of an extractive economic system designed to enrich the few at the expense of the many. The financial sector is awash in so much cash that it can dictate to governments, leading to the dismantling of industry regulations and creating an uberclass of management mandarins who are effectively above the law (or, in institutional terms, “too big to fail”). Charles Ferguson is particularly enraged that as of 2012 there has still not been a single prosecution of a senior financial executive related to the financial crisis, despite compelling evidence of criminality.
With incentives in place to reward bad behaviour – and no penalty when things go wrong – complacent, incompetent, and corrupt elites have become entrenched. Meanwhile, as Michael J. Casey argues, it is always the ordinary middle and working classes who have to pay to clean up the mess.
Charles Ferguson won an Academy Award for his documentary about the financial crisis, Inside Job. Predator Nation is basically a companion book to that movie. In it he lays out his case against the 1 percent in more detail, focusing on the story behind the 2008 crisis. In the final chapters, however, he broadens the discussion into an examination of how the conditions that led to the subprime mortgage meltdown are still with us, leading to extreme inequality, economic stagnation, and a decline in opportunity.
Michael J. Casey casts a much broader net, pointing the finger of blame on the entire global financial system and in particular the self-perpetuating, destructive, co-dependent relationship between China and the U.S. He visits ranchers in Argentina, miners in Australia, and many other people and places in between in an attempt “to investigate the human consequences of global economic dysfunction.” Among his key themes is the need to match economic globalization with an effective political globalization, or international financial governance, in order to manage the instability of a system that seems caught in a spiral of escalating crises.
Despite their different perspectives, Ferguson’s final chapter, a list of “What Should Be Done?” has some overlap with Casey’s concluding summary of “What Is to Be Done?” Among the shared recommendations are greater control over (read: regulation of) the financial sector and a re-emphasis on the “real” economy. Sadly, both authors also describe, and can relate to, a growing public disillusionment with government’s ability to do anything to effect change. Nor is there a lot of comfort in thinking that things will have to get worse before they get better. It’s easier to imagine things getting worse and then dramatically worse if we fail to respond to what has become one of the overriding challenges of our time.
Review first published June 9, 2012.