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I have been enjoying my lovely vacation so much I forgot to blog yesterday! At first I was horrified because how could I forget something like that? But then I laughed because obviously I am feeling relaxed and have managed to step outside the usual tight schedule of my daily life. I have been reading lots about economics. After finishing Neoliberalism: A Very Short Introduction by Manfred Steger and Ravi Roy and getting towards the end of another book on economics I have gained just enough knowledge to be dangerous!
Dangerous because this morning while listening to National Public Radio they were talking to an economist who happens to be the president of the Minneapolis Federal Reserve Bank about this brilliant idea to regulate banks so that the only money they can invest/speculate with/lend is their own money and not their depositors (that would be money that belongs to you and me). This, I know now, is not a new idea. There was a law passed in 1933 by FDR that enforced this very thing and it worked well.
Bookman was in the kitchen making blueberry cornbread pancakes and not really listening to the radio so was quite startled when I burst out with an angry stream of epithets and accusations. Then I started yelling about Glass-Steagall and Reaganomics and the Savings and Loan collapse and how Glass-Steagall worked and if it hadn’t been whittled to nothing by Reagan and then repealed (Bill Clinton how could you!) a lot of the financial system fuck ups we’ve had since the 1980s probably wouldn’t have happened. Bookman gawped at me until I began to run out of steam then he quietly said, I have no idea what you are talking about.
I tried to explain but started to get myself worked up again. Bookman shook his head then put pancakes in front of me so I was instantly distracted. Wise man!
Neoliberalism is a very short introduction at only 135 pages of text followed by a few additional pages of source material and an index. And yet I managed to insert almost all of my numerous page points onto this small book’s pages. It manages to cover a lot of ground starting with what is “neo” about neoliberalism. It traces the development of various kinds of neoliberalism from Reaganomics to Thatcherism, to the neoliberalism with a heart of Bill Clinton and Tony Blair (ha!) and the disaster that was George W. Bush. Obama is not immune either.
We get to see what neoliberalism has done to Latin America, Africa and Asia too. And I learned about how the WTO and the IMF forced countries to cave in to neoliberal policies in order to receive any kind of aid. And the thing is, it was already known that neoliberal policies would create more wealth for the already rich and make life miserable for everyone else. Sure, at first when markets were opened and regulations erased, the economy would have a small boom but that would very quickly be followed by lots of average people losing their jobs and the government would no longer have any kind of safety net or cash reserves to provide assistance. It is sickening and disheartening.
The book being so short of course shakes everything down to the basics but this is good because it makes it easy to grasp the concepts and build a foundation from which to further investigate. The authors are excellent at inserting little boxes to further define terms and explain events and organizations. However, there is so much here that it is impossible to remember it all. Still, it is a start, and as I continue reading ideas and concepts are being reinforced and nuances and details are added.
I have a few basic takeaways from the book. The down and dirty basics of neoliberalism no matter what form it takes: deregulation of the economy, liberalization of trade and industry, privatization of state-owned enterprises. The United States and the UK are responsible for messing up the economies of a large portion of the world. Reagan was a horrible man and Thatcher was a horrible woman. Alan Greenspan is, I have no words for this man but I think he should be in prison.
So there you go. I highly recommend Neoliberalism: A Very Short Introduction to help you become dangerous too. News reports that used to mean nothing much at all will suddenly be so full of poop you will wonder how many baths you will need to take to wash off all those years you allowed it to flood over you. You will be armed enough to know when you are being lied to, which you will quickly discover is almost all the time. You will get mad and spit and splutter and surprise loved ones with your outbursts. But, you will be armed, you will know to ask questions, you will not docilely accept the word of “expert economists” and in spite of all that, you will keep reading because you will have to know, want to know, more.
You are absolutely correct, a little knowledge is a dangerous thing.
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Grad, indeed! but we have to start somewhere! 🙂
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Alright, I was momentarily distracted by the thought of blueberry cornmeal pancakes, but you’ve sold me on this book. I’m going to get it. It’s not at my library, but I’m going to see if I can get it through interlibrary loan. And if not, then I’m going to purchase it! In fact, there are many others in this series that look interesting. Thanks for the recommendation!
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Laila, oh those pancakes! They are sooo good 🙂 I hope you can get a copy of the book and I hope you find it useful. Also, be sure to have something yummy on hand to help with the upset the book will cause.
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This has got to be one of my favorite book reviews ever! As someone who works in financial services and feels somewhat icky about the fact that making the rich richer is a (albeit small) part of my job I am very interested in this sort of thing. Seeing how everything political and financial interconnects is really amazing. I look forward to your reactions on the other books, and am making notes of these titles to add to my library.
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Heh, thanks Amanda! You may be in financial services but hopefully you aren’t a hedge fund or derivatives manager or something 🙂 It’s really eye-opening how interconnected business, finance, politics and social policy is as well as a host of other things. At the same time it is super frustrating because I realize just how much money and power are connected and as someone who is not even close to being rich, I have very little power. However, I also know it doesn’t have to be that way, which is encouraging.
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Thank you for a wonderful review. I am planning to get that book: the ideas about economics that have been swirling around in my brain for well over 35 years seem to be condensed into this book and I am glad to read it. Certainly the contemporary democrats are no longer the party of FDR.
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Gubbinal, thanks! Glad you liked it! You are right, the Democrats have strayed very far from FDR. I hope you find the book as useful as I did! I grew up in the 80s and suddenly things make a lot more sense.
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And this is why I love your blog ❤
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Ha! thanks Ana! 😀
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I loved this post! I could use a refresher on economics. I haven’t thought deeply about economic theory and economic history–and what it tells us about our present and future–since college. This book sounds fascinating. I’m definitely adding it to my TBR pile, towards the top. Thanks for the recommendation!
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AMB, Thanks! I hope you find it as useful as I did!
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This book has been on my radar. Understanding the world and how it works is very important. This book looks like it is a helpful in building a coherent picture.
Though I do try to listen to both sides when it comes to these issues. It seems like the side represented in this book has not been heard enough in the last few decades.
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Brian Joseph, it’s a good book. I don’t think i covers everything but then it can;t and the authors are very upfront about it. It gives a good starting point though, at least I found it to be so. The authors are fairly balanced and don’t indicate any preferences or judgments, they just lay it out and let the reader come to her/his own conclusions.
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Wow, Stephanie!!! Hold your horses!
I love the rant, but banks and the financial system do have a beneficial role. Remember “It’s A Wonderful Life”? That’s good banking!!!
The goal of the financial system is (or at least ought to be) to make beneficial investments (like buying a house, or a factory, or doing R&D in new technology) possible. Yes, there is an interest rate (or a profit). We call that the “price of capital.”
This system has been abused so much that it is easy to forget that, when it is done properly (say, with Glass/Steagall 🙂 it allows everyone to benefit.
Do watch “It’s A Wonderful LIfe” again (that’s a good movie!) And, then, go to the just posted review on “The Atlantic”:
https://www.theatlantic.com/business/archive/2016/12/its-a-wonderful-life-banking/511592/
So glad you’re enjoying the holidays!
Pedro David
ps. With apologies to all the readers who actually work in finance. I know that I am being hopelessly pithy!
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Pedro David, haha! Oh I know banks and the financial system isn’t all bad. I do after all have retirement funds and my financial adviser is professional and takes my interests to heart. There needs to be regulation though like Glass-Steagall which seems like it really worked. It’s frustrating to hear politicians talk now about getting rid of Dodd-Frank and deregulating the market even more. And the whole tax cut for the wealthy and corporations driving the economy malarky! Oh here I go getting worked up again! 😀
It’s a Wonderful Life is a good movie even though it is cheesy. 🙂 Thanks for the article link, it was good and offered some useful tidbits about how banks work.
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Yes. it’s the deregulation that lets banks do too much of what they like that is a big problem isn’t it.
Sounds like a good book. I fear though that it’s one of those books that I’d read, take in and feel excited about, and then a month later not remember all the stuff I need to remember to talk about it intelligently. I hate how that happens, particularly with very useful non-fiction books.
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whisperinggums, I know what you mean about forgetting. I have forgotten some of the things already but the news is “nice” enough to allow me to keep quite a lot of what I read about in mind.
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Oh yes, that makes sense, it would.
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This looks like it’s from the series of very useful and succinct books with just any topics one would want to grasp in our fast moving world, such as the one I have… Literary Theory: A Very Short Introduction. Yup, meant for the very busy life, informative and enjoyable. Best wishes for more good reads in 2017, Stefanie!
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Arti, yes, it is from that series. I have read at least one maybe two of them but don’t ask me what the topics were!
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I only caught a little bit of that NPR broadcast while I was running some errands. Really interesting book Stefanie. I probably should read this and maybe this will be my year for more nonfiction. Oh and by the way, glad you have been enjoying your vacation so much that you even forgot to blog 🙂
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Iliana, it was an interesting broadcast. I always forget we have a Federal Reserve Bank in Minneapolis. The book was really useful, just enough to get your feet wet on the topic without it being overwhelming.
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Good thing you had those yummy sounding pancakes to take your mind off things for a while. Good for you to read and not worry about what is happening online–enjoy your books and your time off (though I hope it is not all economics). I love those little introduction to-books, they are really helpful and I am going to look for this one!
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Danielle, I know! Bookman is good at the food distractions! 🙂 I like the short introduction books too. There are so many I would like to read but you know how that goes! Wouldn’t that be an interesting annual subscription?
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Blueberry pancakes are a perfect distraction! Bookman is indeed very wise! Your review made me nostalgic about by grad school days where we used to spend hours debating on neo-liberalism, realism and neo-realism as part of International Politics course work. You are right about the kind of economic mess ups we have had in 1980s the consequences of which are still being felt. However I am not sure if we are living in a wiser world, where leaders have learnt from history! Sorry, did not mean to start the year in doom gloom mood. I guess knowledge may be dangerous but is also powerful. The more people know, the better it is for the world! Glad you are enjoying your well earned vacation!
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cirtnecce, good food is highly distracting! Sadly I don’t think we are living in a wiser world where our leaders and financiers have learned any lessons. While the man on the radio was talking about the need for regulation our soon to be president is talking about even more deregulation and some Republicans are talking about repealing some of the laws that were passed after the 2008 crisis. Sigh. If only stuffing cash in my mattress was safe! You are right, knowledge is powerful!
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Sounds like a fascinating and fizzing book. I suppose 2016 was a year when neoliberalism got rumbled in that Brexit/Trump was a (disastrous) reaction by many voters against it. A more nationalist and inward cast to the politics and economics of our world looks likely and the internationalism that was the more positive side of neoliberalism may be in deep danger.
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Ian, it was a good book. And watching the Brexit/Trump/nationalist movements is interesting with this new information. In the US it is playing out strangely as a combination of anit-globalization but continuing with deregulation, tax cuts for the wealthy and corporations, and privatization of everything. It is all unsettling.
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