13 Bankers: The Wall Street Takeover and the Next Financial Meltdown by Simon Johnson, James Kwak |, Hardcover | Barnes & Noble
13 Bankers: The Wall Street Takeover and the Next Financial Meltdown

13 Bankers: The Wall Street Takeover and the Next Financial Meltdown

3.5 56
by Simon Johnson, James Kwak
     
 

ISBN-10: 0307379051

ISBN-13: 9780307379054

Pub. Date: 03/30/2010

Publisher: Knopf Doubleday Publishing Group

Even after the ruinous financial crisis of 2008, America is still beset by the depredations of an oligarchy that is now bigger, more profitable, and more resistant to regulation than ever. Anchored by six megabanks—Bank of America, JPMorgan Chase, Citigroup, Wells Fargo, Goldman Sachs, and Morgan Stanley—which together control assets amounting,

Overview

Even after the ruinous financial crisis of 2008, America is still beset by the depredations of an oligarchy that is now bigger, more profitable, and more resistant to regulation than ever. Anchored by six megabanks—Bank of America, JPMorgan Chase, Citigroup, Wells Fargo, Goldman Sachs, and Morgan Stanley—which together control assets amounting, astonishingly, to more than 60 percent of the country’s gross domestic product, these financial institutions (now more emphatically “too big to fail”) continue to hold the global economy hostage, threatening yet another financial meltdown with their excessive risk-taking and toxic “business as usual” practices. How did this come to be—and what is to be done? These are the central concerns of 13 Bankers, a brilliant, historically informed account of our troubled political economy.
 
In 13 Bankers, Simon Johnson—one of the most prominent and frequently cited economists in America (former chief economist of the International Monetary Fund, Professor of Entrepreneurship at MIT, and author of the controversial “The Quiet Coup” in The Atlantic)—and James Kwak give a wide-ranging, meticulous, and bracing account of recent U.S. financial history within the context of previous showdowns between American democracy and Big Finance: from Thomas Jefferson to Andrew Jackson, from Theodore Roosevelt to Franklin Delano Roosevelt. They convincingly show why our future is imperiled by the ideology of finance (finance is good, unregulated finance is better, unfettered finance run amok is best) and by Wall Street’s political control of government policy pertaining to it.
 
As the authors insist, the choice that America faces is stark: whether Washington will accede to the vested interests of an unbridled financial sector that runs up profits in good years and dumps its losses on taxpayers in lean years, or reform through stringent regulation the banking system as first and foremost an engine of economic growth. To restore health and balance to our economy, Johnson and Kwak make a radical yet feasible and focused proposal: reconfigure the megabanks to be “small enough to fail.”
 
Lucid, authoritative, crucial for its timeliness, 13 Bankers is certain to be one of the most discussed and debated books of 2010.

Product Details

ISBN-13:
9780307379054
Publisher:
Knopf Doubleday Publishing Group
Publication date:
03/30/2010
Pages:
320
Sales rank:
549,580
Product dimensions:
6.20(w) x 9.20(h) x 1.50(d)

Table of Contents

Introduction: 13 Bankers 3

1 Thomas Jefferson and the Financial Aristocracy 14

2 Other People's Oligarchs 39

3 Wall Street Rising: 1980- 57

4 "Greed Is Good": The Takeover 88

5 The Best Deal Ever 120

6 Too Big to Fail 153

7 The American Oligarchy: Six Banks 189

Epilogue 223

Notes 233

Further Reading 287

Acknowledgments 291

Index 293

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13 Bankers 3.6 out of 5 based on 0 ratings. 54 reviews.
RolfDobelli More than 1 year ago
This intriguing study concludes that for all the talk of a new world order after the devastating 2007-2009 financial collapse, Wall Street looks remarkably the same. Money and power are concentrated in fewer hands, but the Street's fundamental philosophy, favoring light regulation and markets dominated by a few huge banks, survives. In this eye-opening account, former chief economist of the International Monetary Fund (IMF) Simon Johnson and former McKinsey & Co. consultant James Kwak argue that Wall Street has gotten what it wants for too long, and that the time has come to break up big banks. While the authors cover oft-trod turf, their novel premise that the government must break up the big banks counters conventional wisdom. getAbstract recommends this book to taxpayers and policy makers seeking insight into how Wall Street works.
duluoz_beat More than 1 year ago
I tip my hat to anyone brave enough to try to explain the multi-tiered derivative investments with sub-prime loans buried in them and stepped on several times before insurance companies insured what was uninsurable- or something like that. With great clarity we learn of the intellectual disparity between Wall Street financers and beltway regulators. Same for the legislators more concerned with financing their next campaign than the risks of financing sub-prime mortgages. I sensed a left-leaning viewpoint where Wall Street is taken to the woodshed (as of course it should be) while the government officials are let go with a wink and a nod. Criticism is piled on Wall Street while the government actions are related in a neutral, factual reporting style. The regulatory changes in 1999 during Clinton's administration that allowed banks to merge with and into other financial institutions and offer an array of products are discussed in detail. It seems to me that these changes in conjunction with the Community Reinvestment Act ("CRA") were the catalyst for the subprime crisis as many of the newly formed institutions fell outside the regulations as called for by the CRA. So why are the officials that created the environment for subprime lending not treated as villains the way the "13 Bankers" of the title are? I wanted to learn more about these 13 Bankers in a similar manner as the authors of "Barbarians at the Gate" offered in their book. A character expose within the financial details would make for a more compelling read. I found the title of this book to be misleading in that sense. The first half of the book is gripping but it bogs down and loses its forward motion toward the middle and ends more like a text book than a non-fiction narrative. Given the complexity of the bundled investments created by the evil investment bankers it was probably inevitable. In the wake of the crisis we are seeing a round of "angry parent grounding obstreperous child" regulations- yet the intellect at work on Wall Street is already beyond this and certainly has a new bundle of investments that Washington can't envision or ever understand.
Anonymous More than 1 year ago
An excellent and well researched history of what lead up to the current financial crisis. While the authors seem to have part of the right solution in breaking up the big banks by limiting them to a fixed percentage of GDP, they may miss or avoid two key points: 1.) The Federal Reserve is a private banking cartel that acts in its own self interest, and any regualtion by it only serves the interests of those being regulated. Central banking, with fiat currencies, itself is a significant root cause of booms and busts. Bubbles and their deflation will continue as long as central banking drives the economy. 2.) GDP is really a measure of spending, and measures consumption rather than production, and can be misleading in that standard of living is going down, even though GDP may be going up. Looking at the ratio of Debt or Bank Assets to GNP tells more of the real story regarding economic decline. The growing domination of the economy by the financial services industry gives a false sense of value and growth. If 60% of the S&P 500's earnings are financial services companies, the quality of its index and earnings are much weaker than those when industrial production were their bases decades ago.
pianoplayerVA More than 1 year ago
This book is revealing and interesting If you want another viewpoint,read this.
jackND More than 1 year ago
If you'd like to know the history of American finances, and what we can do about it for the future, you should seriously pick up this book. The cycles of politics, and the growth of the largest banks and the understanding that breaking up big banks and hard limits on size and regulation is a fight America has met before. Essential reading!
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willyvan More than 1 year ago
This is a very useful book on the causes of the current slump. Johnson and Kwak focus on the role played by the 13 leading bankers who dominate Wall Street. Between 1998 and 2008, Wall Street spent $1.7 billion on election campaigns and $3.4 billion on lobbying. Its people moved into Washington. Its ideology that a large finance sector was vital for the USA became all too widely accepted. As a US Senator said, "the banks . frankly own the place." Yet, as the authors point out, finance is a rent-seeking activity, shifting wealth, not creating it. Finance, at best, assists wealth creation, not destroys it. So in the crisis, the bankers blackmail us - pay up or we go under, dragging you all down with us. Their mantra is - socialise losses, privatise gains. The governments give the banks whatever they want, instead of writing down the banks' debts. So we the taxpayers have been made to give the bankers blank cheques, up to $23.7 trillion. The slogan is 'save the economy'; the reality is saving the banks, the bankers and the bankers' bonuses. These guarantees (subsidies) allow the biggest banks to borrow more cheaply than their rivals, so they grow even bigger. But this is to go the wrong way. As the authors state, "The right solution is obvious: do not allow financial institutions to be too big to fail; break up the ones that are." Even Alan Greenspan, Chairman of the Federal Reserve, said, "If they're too big to fail, they're too big." And these bailouts allow the bankers to take ever-bigger risks, which will cause the next crisis. As Johnson and Kwak conclude, "With the same conditions in place that led to the last financial crisis, it would be folly to expect any other result." One sign of madness is to do the same thing and expect a different result. Are people going to allow yet another crunch, causing an even worse slump? We need to defeat this financial oligarchy before it ruins us all.
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Bernadetteb13 More than 1 year ago
I would like to start by saying that I am seventeen years old and was only a freshman when our market experienced our grave recession. When first stumbling upon the novel I was intrigued to learn more about the actions of our power elite and government officials. But as I read further into the novel I began to realize that my little experience in banking, when I say little I mean I just opened a savings account this summer for college, would unfortunately prevent me from grasping the depth of the novel. Between derivatives, capital, liquid funds, and equity not even a dictionary could sort out the large numbers and terms that make up our banking system. So I do believe that Simon Johnson and James Kwak were appealing to an audience with in-depth background of they complicated logistics of our banking system, which would inevitably appeal to an older and more financially well-off audience. Although I cannot say that I didn't enjoy comprehending what I could about our countries banking history and learn even more about the root of our bank failure in 2008. I believe any American citizen would like to know the truth about regulations and restrictions put on bankers to secure their money. It was tragic to find that the government officials that we elect to properly operate our country deregulate policies for their large campaign contributors and are essentially Wall Street's puppets. The authors even admit that it is hard for our government to reprimand such a deep pocketed machine in our country, so instead our government has grown dependent and only passes legislation to ensure re-election. Even Rahm Emanuel, chief of staff for the Obama administration said," Rule one: Never allow a crisis to go to waste. There are opportunities to do big things."Yet Obama never could pass his sweeping overhaul of the financial regulatory system after the recession hit in 2008. As you read through the novel you begin to see the mentality that developed through the hundreds of years of U.S. banking. Coming alarmingly close to Jefferson's ultimate fear of an "oligarchy" that had complete control over the quality of life of the average "Joe". After scouring through all the numbers of what seemed pointless and unreadable information, James and Simon presented an unveiling of our financial system. A congressional staff says it best when he described banking efforts after the 2008 bailout as, "an orchestrated, well-funded, effort by the banks to manipulate our legislations and leave no fingerprints."I highly recommend for you to expand your banking knowledge and find the truth in this novel.
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