ECONned: How Unenlightened Self Interest Undermined Democracy and Corrupted Capitalism

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Palgrave Macmillan, Mar 2, 2010 - Business & Economics - 362 pages
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Why are we in such a financial mess today? There are lots of proximate causes: over-leverage, global imbalances, bad financial technology that lead to widespread underestimation of risk.
But these are all symptoms. Until we isolate and tackle fundamental causes, we will fail to extirpate the disease. ECONned is the first book to examine the unquestioned role of economists as policy-makers, and how they helped create an unmitigated economic disaster.

Here, Yves Smith looks at how economists in key policy positions put doctrine before hard evidence, ignoring the deteriorating conditions and rising dangers that eventually led them, and us, off the cliff and into financial meltdown. Intelligently written for the layman, Smith takes us on a terrifying investigation of the financial realm over the last twenty-five years of misrepresentations, naive interpretations of economic conditions, rationalizations of bad outcomes, and rejection of clear signs of growing instability.

In eConned, author Yves Smith reveals:

--why the measures taken by the Obama Administration are mere palliatives and are unlikely to pave the way for a solid recovery

--how economists have come to play a profoundly anti-democratic role in policy

--how financial models and concepts that were discredited more than thirty years ago are still widely used by banks, regulators, and investors

--how management and employees of major financial firms looted them, enriching themselves and leaving the mess to taxpayers

--how financial regulation enabled predatory behavior by Wall Street towards investors

--how economics has no theory of financial systems, yet economists fearlessly prescribe how to manage them

 

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User Review  - rivkat - LibraryThing

Its organization falters in places, and while it gives a fair amount of intellectual history it expects you to understand a lot of finance jargon, but this is a fresh take on the economic collapse ... Read full review

Contents

INTRODUCTION
1
CHAPTER 1 THE SORCERERS APPRENTICES
8
CHAPTER 2 BLINDED BY SCIENCE
29
CHAPTER 3 FINANCIAL ECONOMICS COURTESY PT BARNUM
66
THE TRIUMPH OF SIMPLISTIC MATH OVER MESSY FACTS
92
CHAPTER 5 HOW FREE MARKETS WAS SOLD
105
CHAPTER 6 HOW DEREGULATION LED TO PREDATION
127
CHAPTER 7 LOOTING 20
160
THE SHADOW BANKING SYSTEM SELFDESTRUCTS
233
CHAPTER 10 PLUS ÇA CHANGE PLUS CEST LA MÊME CHOSE
270
AFTERWORD
306
APPENDICES
309
NOTES
320
BIBLIOGRAPHY
355
INDEX
358
Copyright

CHAPTER 8 THE WIZARD OF OZ
199

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About the author (2010)


YVES SMITH is creator of the influential blog, Naked Capitalism, a top ranked economics and finance blog with over 250,000 unique visitors each month.  Smith has been working in and around the financial services industry since 1980 as an investment banker, management consultant, and corporate finance advisor. Smith has appeared, on CNBC, CNN, and FOX Business News, and has written over 40 articles in venues such as The New York Times, Slate, and the Christian Science Monitor.  She lives in Manhatan.

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