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Capital Offense: How Washington's Wise Men Turned America's Future Over to Wall Street
     

Capital Offense: How Washington's Wise Men Turned America's Future Over to Wall Street

by Michael Hirsh
 

Why every president from Reagan through Obama has put Wall Street before Main Street

Over the last few decades, Washington’s firmly held belief that if you make investors happy, a booming economy will follow has caused an economic crisis in Asia, hardship in Latin America, and now a severe recession in America and Europe. How did the best and brightest of

Overview

Why every president from Reagan through Obama has put Wall Street before Main Street

Over the last few decades, Washington’s firmly held belief that if you make investors happy, a booming economy will follow has caused an economic crisis in Asia, hardship in Latin America, and now a severe recession in America and Europe. How did the best and brightest of our time allow this to happen? Why have these disasters done nothing to change the free-market mantra of the Washington faithful? The answer has nothing to do with lobbyists and everything to do with ideology. In Capital Offense, veteran Newsweek reporter Michael Hirsh gives us a colorful narrative history of the era he calls the Age of Capital, telling the story through the eyes of its key players, from Ronald Reagan and Milton Friedman through Larry Summers and Timothy Geithner.
•    Based on the solid research and skilled reporting of Newsweek Senior Editor Michael Hirsh
•    Takes you inside high-level, closed-door conversations of top White House advisers and administration officials such as Alan Greenspan, Robert Rubin, Paul O'Neill, and others
•    Illuminates key figures and lively interpersonal clashes, including the conflict between Larry Summers and Nobel Prize-winning economist Joe Stiglitz
•    Offers crucial insights on why President Obama took so long to work on the economy—and why he may not be going far enough
•    Catalogs the missteps of three decades of fiscal, regulatory, and financial recklessness, including the dismantling of the Glass-Steagall Act, the S&L debacle, Enron, and the subprime mortgage meltdown
As we struggle to emerge from the financial crisis, one thing seems certain: Wall Street’s continued dominance of the global economy. Propelled into the lead by a generation of Washington policy-makers, Wall Street will continue to stay ahead of them.

Editorial Reviews

Publishers Weekly
There's plenty of blame to spread around for the Great Recession: Wall Street, government regulators, mortgage lenders, and sub-prime borrowers have all, at various times, been held responsible. In Michael Hirsh's view, however, the real culprits are the free-marketeers – economic theorists such as Milton Friedman and Treasury chairmen Alan Greenspan and Ben Bernanke – who placed excessive faith in the self-correcting powers of unfettered markets and failed to anticipate the imminent crisis. Hirsh's understanding of the philosophical and political origins of the credit crunch is considerably broader and deeper than those of most reporters, who merely recount Wall Street's recent failures. Still, it's difficult to directly tie economists and politicians to the mortgage bubble. Milton Friedman's free market principles may have led Ronald Reagan to repeal Glass-Steagall provisions, fomenting the crisis, but regulation alone wasn't responsible for unscrupulous and irresponsible lending or exponential growth in the derivatives market. Still, Hirsh's perspective is valuable, and he acknowledges nuances frequently ignored by others, such as the gender of Washington's derivatives regulator, Brooksley Born, a rare woman among men and thus a "lightweight" to be ignored by swaggering Wall Street veterans like Robert Rubin and Lawrence Summers, who regarded her cautionary pleas for regulation as a failure of machismo. (Sept.)
Michiko Kakutani
Capital Offense does a highly informed, if decidedly opinionated, job of situating these developments within a historical context, and the book makes for useful and succinct reading at a time when the state of the economy—and President Obama's handling of the recession—are being vociferously debated in Washington and around the country.
—The New York Times

Product Details

ISBN-13:
9780470520673
Publisher:
Wiley
Publication date:
09/14/2010
Pages:
352
Product dimensions:
6.40(w) x 9.30(h) x 1.40(d)

Meet the Author

MICHAEL HIRSH is Newsweek's National Economics Correspondent. He has covered international affairs for more than two decades, from several continents, and now writes an online column entitled "The World from Washington." His 2003 cover story, "Bush's $87 Billion Mess," was one of three that earned Newsweek the 2004 National Magazine Award for General Excellence.

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