Pages
- Home
- Mystery Series
- Bizarro, Fantasy & SF
- QUILTBAG...all genres
- Kindle Originals...all genres
- Politics & Social Issues
- Thrillers & True Crime
- Young Adult Books
- Poetry, Classics, Essays, Non-Fiction
- Science, Dinosaurs & Environmental Issues
- Literary Fiction & Short Story Collections
- Sookie Stackhouse/Southern Vampire Books & True Blood
- Books About Books, Authors & Biblioholism
Thursday, October 8, 2020
WHY SAVE THE BANKERS?, a question I ask myself every time new economic disasters emanate from them
WHY SAVE THE BANKERS?: And Other Essays on Our Economic and Political Crisis
THOMAS PIKETTY (tr. Seth Ackerman)
Houghton Mifflin Harcourt
$15.99 trade paper, available now
WHY SAVE THE BANKERS? is a question I don't think enough of us ask...out loud or silently. Read this short, easily digested collection of columns (my 5* #BookRecommendation: https://tinyurl.com/sh4r7pw7) while it's $1.99 on Kindle!
Rating: 5* of five
The Publisher Says: Incisive commentary on the financial meltdown and its aftermath, from the author of the bestselling global phenomenon Capital in the Twenty-First Century
Thomas Piketty's work has proved that unfettered markets lead to increasing inequality. Without meaningful regulation, capitalist economies will concentrate wealth in an ever smaller number of hands. Armed with this knowledge, democratic societies face a defining challenge: fending off a new aristocracy.
For years, this critical challenge to democracy has been the focus of Piketty’s monthly newspaper columns, which pierce the surface of current events to reveal the economic forces underneath. Why Save the Bankers? brings together selected columns from the period bookended by the September 2008 collapse of Lehman Brothers and the terrorist attacks in Paris in November 2015. In crystalline prose, Piketty examines a wide range of topics, and along the way he decodes the European Union’s economic troubles, weighs in on oligarchy in the United States, wonders whether debts actually need to be paid back, and discovers surprising lessons about inequality by examining the career of Steve Jobs.
Coursing with insight and flashes of wit, these brief essays offer a view of recent history through the eyes of one of the most influential economic thinkers of our time.
My Review: Any rational person sees the world's injustice. Few come up with commonsensical, tried-and-true solutions as does Thomas Piketty, week by week, in his newspaper column for Libération, a Socialist-aligned daily.
You'll remember Piketty's name from his monster bestselling tome, Capital in the Twenty-First Century, which The Belknap Press brought out in 2014. It's sat unread on many a poseur's coffee table. (I've owned it since 2015, and have reached p310: Wage Scales and the Minimum Wage, which begins: "There is no doubt that the minimum wage plays an essential role on the formation and evolution of wage inequalities, as the French and US experiences show." Out of 577 pages of text plus a hundred or so more of back-matter, I can't claim to be whipping through this one...not least because OWWW my hands!)
And still, I say with his, among other reasonable voices (I'm looking at you, Yanis Varoufakis), pointing and waving their arms to drag the world's attention to these solutions, what's the problem with fixing the seriously, badly broken economic stuff the 99.9% endure?!
Here's the problem. Piketty wants to tame greed and mitigate inequality. That does not suit the Economic Royalists in control of the modern world.
But here he is, week by week, swinging for the bleachers in his newspaper column. And that leads me to the major problem a book like this has: reading collections of columns is wearing in that they re-explain things a lot. Since they were once read in one's daily newspaper, and since one never knows if the current reader has any prior specific knowledge of the subject, the wisdom of repetition is honored. The collection-reader, however, wishes the publisher had spent some time eliding a bit of the information overkill.
As problems go, however, I'll take this one compared to the larger problem of silence or collaboration with the prevailing radical-right orthodoxy in the economics of the world.
I salute you, Kind Sir. Long may you attempt to shout loud enough for the hoi polloi to hear and heed you. An early column, from 2009, has this gem to offer regarding the progressive income tax vis-à-vis progressive income and capital-gains taxation:
For almost fifty years, from the 1930s until 1980, not only did the top rate never fall below 70 percent, but it averaged more than 80 percent. ... They had the particular virtue of drastically reducing corporate executives’ incentive to dip their hands into the till, beyond a certain threshold. With the globalization of finance, such policies could probably be enacted only with a complete reworking of accounting disclosure rules, and relentless efforts against tax havens. Unfortunately, it will probably take many more crises to get there.If the kleptocrats know the tax man is standing at the vault door with the legal right to snag most of their ill-gotten gains, there's comparatively less incentive to steal too much. This is blindingly obvious, no? Read this beautiful dream from twelve years ago:
First, there must be guarantees that the shareholders and managers of banks bailed out by taxpayers will pay a price for their mistakes, which hasn’t always been the case in recent interventions. Second, aggressive financial regulation must be put in place to ensure that toxic assets can no longer be sold into the markets—with the same vigor that food regulators use when supervising the introduction of new products. This will never be possible as long as we leave more than $10 trillion in assets to be managed in tax havens in the most opaque fashion. Finally, we have to put an end to the obscene compensation packages of the financial sector, which helped stimulate excessive risk-taking. That will require more heavily progressive taxes on high incomes, the polar opposite of France’s current tax-shield policy,* which aims to preemptively exempt the best off from any effort to foot the bill. With that kind of a strategy, we will probably have to prepare ourselves for even more severe crises to come—social and political ones.Honestly, doesn't M le Docteur sound like a Cassandra from Hell? Did he somehow witch up this very outcome, the one we call "USA 2020" with curled lips and seriously elevated blood pressures all around? Many in the US probably don't recall the heinous, vicious dismemberment of the Greek economy that came with the world economic crisis of 2008-2010:
...the new liquidity {injected by central banks printing money} undoubtedly helped us avoid a cascade of bankruptcies and prevented the recession from becoming a depression. That is, provided governments now manage to impose strict financial regulations that prevent such disasters from recurring, demand accountability (and taxes) from the banks, and, to boot, unload the debt that the governments borrowed from them. –and– To save the banks, the monetary authorities lent to them with no questions asked, at interest rates of 0 or 1 percent. They were right to do so. But after that, it’s unclear how to explain to taxpayers (Germans as well as Greeks) that they will have to tighten their belts for years to repay high interest rates on their public debt.It's a crisis that keeps on being repeated, and *still* isn't fully fixed in Greece in 2020! All the idiot bankers can say is "austerity! Austerity!"
But if they go all in on drastic austerity policies, there is a high risk that it will lead to disaster. Financial crises are part and parcel of capitalism. And when faced with major crises, central banks are irreplaceable. Of course, their infinite power to create money must be kept within bounds. But not to fully use this tool in today’s context would be a suicidal and irrational strategy.The cost in human terms, need I remind my COVID-19 afflicted 2020 readers, is appalling. And growing.
What’s odd is that two years ago everyone was defending the central banks when they were bailing out the private financial sector, even though that sector had caused the crisis. Clearly several decades of systematically denigrating the state has left its mark. And it’s ended up making us forget that central banks are not there to twiddle their thumbs. In times of serious crises they play a crucial role as lender of last resort. That role may well grow even bigger in the years to come.Like right now...in other words, my friends, this is the consequence of not heeding the good advice of people who see that austerity = death for the powerless, and that this is quite simply a mug's game to play with an economy. Make no mistake, this disastrously badly handled economic crisis isn't close to over or even at bottom.
I will not add more quotes to this review. My 5-star encomium plus the parts already presented to you should explain why I feel Thomas Piketty is a man of greatest intellectual admirability and social and moral quality. For anyone so inclined, I have sixty-three notes and highlights on Goodreads. Yes, that's right, 60+3=63 of them. The strain of trying not to get too many duplicates was strong! But all in all, this reading experience was one of the best I've had in ages.
What effect will the 2007–9 world financial crisis have on the distribution of wealth? Despite what you often hear, it’s unlikely that the crisis will lead to a lasting decline in inequality. –and– The historical data series on top incomes that we have created with the British economist Tony Atkinson, which now tracks the annual evolution of inequality in twenty-three countries throughout the twentieth century, shows unambiguously that financial crises, as such, have no lasting effect on inequality: it all depends on the political response to them.With the benefit of hindsight, we all know the Whoopsie! Recession did filth to long-term economic inequality. And that, mes vieux, is why You. Must. Vote. In. November.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.