Between Debt and the Devil: Money, Credit, and Fixing Global Finance
320
Between Debt and the Devil: Money, Credit, and Fixing Global Finance
320eBook
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Overview
Why our addiction to debt caused the global financial crisis and is the root of our financial woes
Adair Turner became chairman of Britain's Financial Services Authority just as the global financial crisis struck in 2008, and he played a leading role in redesigning global financial regulation. In this eye-opening book, he sets the record straight about what really caused the crisis. It didn’t happen because banks are too big to fail—our addiction to private debt is to blame.
Between Debt and the Devil challenges the belief that we need credit growth to fuel economic growth, and that rising debt is okay as long as inflation remains low. In fact, most credit is not needed for economic growth—but it drives real estate booms and busts and leads to financial crisis and depression. Turner explains why public policy needs to manage the growth and allocation of credit creation, and why debt needs to be taxed as a form of economic pollution. Banks need far more capital, real estate lending must be restricted, and we need to tackle inequality and mitigate the relentless rise of real estate prices. Turner also debunks the big myth about fiat money—the erroneous notion that printing money will lead to harmful inflation. To escape the mess created by past policy errors, we sometimes need to monetize government debt and finance fiscal deficits with central-bank money.
Between Debt and the Devil shows why we need to reject the assumptions that private credit is essential to growth and fiat money is inevitably dangerous. Each has its advantages, and each creates risks that public policy must consciously balance.
Product Details
| ISBN-13: | 9781400885657 |
|---|---|
| Publisher: | Princeton University Press |
| Publication date: | 08/02/2017 |
| Sold by: | Barnes & Noble |
| Format: | eBook |
| Pages: | 320 |
| File size: | 8 MB |
About the Author
Table of Contents
Acknowledgments ixPreface: The Crisis I Didn’t See Coming xi
Introduction: Too Important to Be Left to the Bankers 1
Part I Swollen Finance 17
1 The Utopia of Finance for All 19
2 Inefficient Financial Markets 34
Part II Dangerous Debt 49
3 Debt, Banks, and the Money They Create 51
4 Too Much of the Wrong Sort of Debt 61
5 Caught in the Debt Overhang Trap 74
6 Liberalization, Innovation, and the Credit Cycle on Steroids 88
7 Speculation, Inequality, and Unnecessary Credit 108
Part III Debt, Development, and Capital Flows 131
8 Debt and Development: The Merits and Dangers of Financial Repression 133
9 Too Much of the Wrong Sort of Capital Flow: Global and Eurozone Delusions 149
Part IV Fixing the System 161
10 Irrelevant Bankers in an Unstable System 163
11 Fixing Fundamentals 175
12 Abolishing Banks, Taxing Debt Pollution, and Encouraging Equity 186
13 Managing the Quantity and Mix of Debt 195
Part V Escaping the Debt Overhang 211
14 Monetary Finance—Breaking the Taboo 213
15 Between Debt and the Devil—A
Choice of Dangers 231
Epilogue: The Queen’s Question and the Fatal Conceit 241
Notes 253
Bibliography 277
Index 289
What People are Saying About This
"This is a superb book. A must-read for anyone interested in understanding the unhealthy relationship between debt and the modern economy."—Atif Mian, coauthor of House of Debt"This is the most penetrating analysis of the inherent imperfections of our financial system to appear since the crash of 2008. It will and should provoke extensive debates about the policies needed to avoid future crises."—George Soros"Adair Turner is a writer who thinks unusually deeply and is prepared to follow his answers to their logical conclusion, however unsettling. Here, he offers a set of proposals for financial reform that are radical yet practical. As the global financial crisis recedes and the danger mounts that the momentum for change will be lost, we can only hope that the world heeds Turner's clarion call."—Barry Eichengreen, University of California, Berkeley"Turner's fresh and deep insights into our financial system come with the expertise of an insider. Between Debt and the Devil is a landmark in monetary economics, with profound implications for policy reform."—Joseph E. Stiglitz, Nobel Laureate in Economics"A masterwork! Insightful, scholarly, and persuasive. Adair Turner has provided a convincing analysis of what has gone wrong before, and what could go wrong again, among the intertwined complexities of money, credit, and misguided theories of finance."—Paul Volcker, former chairman of the U.S. Federal Reserve and the U.S. Economic Recovery Advisory Board"Between Debt and the Devil is a devastating critique of the banking system and a powerful intellectual challenge to conventional wisdom. A splendid book."—Robert Skidelsky, author of John Maynard Keynes, 1883-1946: Economist, Philosopher, Statesman"Stunningly thorough yet highly readable, Between Debt and the Devil is a thoughtful and deeply researched book that covers all the policy angles on debt in advanced economies, from the problems in regulating credit binges to the challenges of dealing with their aftermath."—Kenneth S. Rogoff, coauthor of This Time Is Different: Eight Centuries of Financial Folly"Between Debt and the Devil is a wide-ranging and highly ambitious book. Turner presents an alternative way of thinking about financial economics."—Alan D. Morrison, coauthor of Investment Banking: Institutions, Politics, and Law"Original and powerful. In a crowded field, this book stands out."—Robert Pringle, author of The Money Trap: Escaping the Grip of Global Finance"Turner's book augments the growing literature that lays bare the realities of boom and bust, bubble and crash, and the recurrent coordination failures that characterize financial history. Between Debt and the Devil will enrich debate among both academics and policymakers."—William H. Janeway, author of Doing Capitalism in the Innovative Economy