Charles H. Ferguson
Published: May 29, 2012
Category: Non Fiction
The last time we saw Charles Ferguson, he was beginning his remarks on the occasion of his Academy Award for Inside Job with these blunt words: "Forgive me, I must start by pointing out that three years after our horrific financial crisis caused by financial fraud, not a single financial executive has gone to jail, and that's wrong."
Now he’s back with a book that --- big surprise --- documents the atrocities.
But that’s the least of it.
The larger argument of “Predator Nation: Corporate Criminals, Political Corruption, and the Hijacking of America” is that “over the last thirty years the U.S. financial sector has become a rogue industry…Since the 1990s, its power has been sufficient to insulate bankers not only from effective regulation but even from criminal law enforcement. The financial sector is now a parasitic and destabilizing industry that constitutes a major drag on American economic growth…..So one reason for writing this book is to lay out in painfully clear detail the case for criminal prosecutions.”
Ferguson is far from the only writer to feel this way. I can name a dozen others --- but they are all bloggers. Ferguson, in contrast, sold a company for $100 million. Won an Academy Award. And --- this is telling --- he thinks Obama is just as much the bitch of Wall Street as Bush was. As Clinton was. As Reagan was.
Let’s be clear: This is not a political book, not an election year screed teed up to help either candidate. It’s a horror story: how you and I became second-class citizens in our own country, how most Americans have no idea how this happened, how very unlikely we can do much about it before Wall Street’s stranglehold on Washington solidifies the dominance of an elite whose only allegiance is to its own money. [To buy the book from Amazon, click here. For the Kindle edition, click here.]
Readers of this site are among the best-informed people in America, but I'd bet few of us have followed this story closely. We can’t. We’re too busy surviving. We have, at best, a general idea of the plot: In the saga of boom and bust on Wall Street, the only people who were busted were individual investors.
So let me not bang on. Let me, instead present some of Ferguson’s case in the form of a quiz. Answers at bottom. (Try not to cheat. On the other hand, considering the subject...)
1) From 2000 to the financial meltdown of 2008, what percentage of mortgages were used to finance purchases of the buyer’s first home?
2) Between 2000 and 2006, how much did prices of U.S. homes increase?
3) Some believe that the subprime bubble was caused by deadbeats who scammed their way into mortgages. What percentage of people who gave fraudulent data to get subprime loans during these years had help from mortgage brokers?
4) By 2005 what percentage of all American GDP growth was housing-related?
5) In 2004 the SEC voted unanimously to a) limit leverage at investment banks to 20% b) limit leverage to 50% or c) let investment banks calculate their own leverage limits.
6) In the third quarter of 2007, when Merrill Lynch was falling apart, how often did its CEO, Stan O’Neal, play golf? a) not at all. b) once. c) 20 times.
7) Ferguson writes: “The President and senior administration officials have portrayed themselves as frustrated and hamstrung --- desirous of punishing those responsible for the crisis but unable to do so because their conduct wasn’t illegal, and/or the federal government lacks sufficient power to sanction them.” Ferguson finds this view a) “sad but true” b) proof that “Wall Street rules” or c) “complete horseshit.”
8) In the past decade, how much has the financial services industry given to American politicians? a) $500 million b) $1 billion c) $5 billion.
9) How does the U.S. rank in broadband deployment? a) first b) twentieth c) fiftieth.
10) What does the American telecommunications industry spend more on? a) lobbying b) research & development.
11) In 2009, Britain enacted a tax on banking bonuses. At what rate? a) 15% b) 25% c) 50%.
Now look at your answers. Depressing, yes?
Okay, who’s to blame? For Ferguson, the answer is: neither political party. Or, rather, both.
But there are huge differences between our political parties these days, you say.
Yes, says Ferguson, on social issues. But on economic issues --- which is what people with money seem to care about a lot more than gay marriage --- the parties are, he argues, in complete agreement:
Both political parties have been remarkably clever and effective in concealing this new reality. In fact, the two parties have formed an innovative kind of cartel --- an arrangement I have termed America’s political duopoly. Both parties lie about the fact that they have each sold out to the financial sector and the wealthy. So far both have largely gotten away with the lie, helped in part by the enormous amount of money now spent on deceptive, manipulative political advertising.
The result: an economic elite, lawless and arrogant. A bought-and-paid-for government. And a growing underclass: “There are now tens of millions of Americans whose condition is little better than many people in poor third-world nations.”
It is obligatory that books with information this dark show a flash of light at the end. Ferguson does this too: “Americans are getting angry, and even when they’re misguided or poorly informed, people have a deep, visceral sense that they’re being screwed.”
Fine. We’re getting screwed and we know it. So what?
Now, Ferguson says, we try to save our democracy. We invest in education. We “bring the financial sector under control.” We limit the impact of money on elections. We reform the tax system. We consider broadband as “infrastructure” and build it out.
Show of hands: How many think this can happen? How many think we are so fucked?
1) Fewer than 10%. Many more mortgages were taken out to buy a second home, refinance a prior mortgage or extract equity out of a home.
2) According to the U.S. National Home Price Index, home prices doubled --- the largest, fastest increase in history.
5) c) The banks could set their own limits.
6). c) He played golf 20 times.
7. c) “complete horseshit.”
8) c) $5 billion.
9) b) twentieth.
10) a) lobbying.
11) c) 50%.