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Why We Deregulated the Banks

Author: Sebastian Mallaby, Paul A. Volcker Senior Fellow for International Economics and Director of the Maurice R. Greenberg Center for Geoeconomic Studies
July 31, 2011
New York Times

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Seven years ago, James Mann published “Rise of the Vulcans,” a history of the neoconservative foreign-policy advisers who rose to prominence with the presidency of George W. Bush. Mann traced the group's origins to the 1970s, when figures like Dick Cheney and Donald Rumsfeld got their start in government, and told how events from East Asia to Kuwait solidified their faith in American assertiveness abroad. Of course, Mann was writing against the backdrop of the Iraq invasion. The belief system he chronicled had culminated in overreach.

Jeff Madrick's “Age of Greed” almost seems to have set out to be the economic equivalent of Mann's history. Writing against the backdrop of the 2007-9 financial crisis, Madrick, the author of “The End of Affluence,” also starts his story in the 1970s, tracing the regulatory and cultural changes that led to our current trouble. In Madrick's telling, a cabal of conservatives, driven first by greed and second by “extreme free-market ideology,” gradually seized power. The result, as proclaimed in his bold subtitle, was “the triumph of finance and the decline of America.”

It's clear from the outset that Madrick has his work cut out for him. Where Mann's story concentrated on six individuals who held office through successive Republican administrations, Madrick draws in a far wider cast of characters: thinkers like Milton Friedman; business leaders like Jack Welch; presidents like Richard Nixon and Ronald Reagan. It's not always obvious what connects these disparate figures, so the book jumps from pen portrait to pen portrait without always advancing its main theme.

 

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