subject: Never In American History Has The Government And Lawmakers Dared To Throw Such A Strong Challenge [print this page] Since the formation of the nation about 230 years ago never has the Congress together with the White House had the courage to initiate plans to chain the financial lobby with a swath of regulations that would prevent them from triggering panic and cause recessions. But despite the muscle flexing it may once again be clear that Washington lacks the guts to make the final thrust.
In their book 13 Bankers: The Wall Street Takeover and the Next Financial Meltdown" Simon Johnson and James Kwak recall the battle to keep the financial lobby under control. It had been going on to the time of Thomas Jefferson and Andrew Jackson. The results have been generally mixed. The financial lobby have always had the power to sabotage the economy and they have never failed for doing exactly this.
The book bluntly states that the market can never correct itself. If left alone the mega financial entities splurge on borrowed money - cannot seem to control themselves from this temptation. They speculate willy - nilly until the system crashes.
Professor Johnson focuses on entrepreneurship at Sloan School of Management of MIT. He was formerly engaged as a consultant by McKinsey Company. The book deals with the matter in a matter of fact way and even the explanation of derivatives is presented in such a way that the ordinary reader can make sense of this complex issue.
The authors conclude that in the past two hundred years only during one period was government able to clamp down effective regulations to be able to control the Wall Street bankers. They said in the boom, The result was the safest banking system that America has known in its history.The authors were referring to the half century starting from the 30s and lasting till the end of the 70s.
It was Ronal Reagan that re-ushered the laissez-faire theory into practice and this was taken over by all of his successors irrespective of party base. If markets correct themselves what need is there for oversight? This was contention. As they took this stand the regulations vanished or were erased. Even the Obama team trying to put chains on Wall Street has not fully shaken off this surmise. The authors prick the present government on this issue.
In conclusion Johnson and Kwak have rightly said, The financial crisis of 2007-2009 has made Jefferson a little less out of fashion.
