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Very nice review of Bailout Nation in the NYTimes/Freakonomics blog:
Barry Ritholtz, in his new book Bailout Nation: How Greed and Easy Money Corrupted Wall Street and Shook the World Economy writes, “The iconic image is the American cowboy. You can picture him on a cattle drive, wearily watching over his herd. All he needed to get by were his wits, his horse — and his trusty Winchester.”
Americans are proud of this heritage, proud of being a country of “determined, self-reliant individuals” where hard work, not government handouts or family connections, promised a shiny future. Ritholtz’s book seeks to explain how the United States, once so proud, became “a nanny state for well-paid bankers.”
Ritholtz may be just the right person to explain the transition to both the disillusioned amateur and the finance junkie. He doesn’t pull his punches or bury the truth in layers of finance-speak, caveats, and disclaimers. Since he began blogging seven years ago, in-the-know readers of his popular blog, The Big Picture, have turned to Ritholtz for his prescient, refreshingly honest commentary on the economy. Anyone interested in understanding the roots of our current crisis should check out the book, but while you wait by the mailbox, here are some highlights.
Ritholtz On Bailouts
Unlike some commentators and economists who have blamed the crisis on a failure of capitalism and free markets, Ritholtz bases his book on the premise that we haven’t had a properly functioning capitalist system since 1971, the fateful year that the U.S. government bailed out Lockheed Martin.
Before 1971, “ … excessive greed, recklessness and foolish speculation were punished by the market.” If an early American cowboy left his herd to pursue a shaky investment deal, he most likely ended up ruined, stuck on a construction crew in some dusty outpost while he tried to scrape together enough money to start again. Meanwhile, the conservative cowboy who stuck with his herd, growing it carefully and cautiously, prospered — and perhaps picked up a few of Cowboy #1’s cattle at a steep discount.
After 1971, all of that changed . . .”
Way cool!
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Source:
The Nanny Nation
Dwyer Gunn
NYT Freakonomics Blog
http://freakonomics.blogs.nytimes.com/2009/07/08/the-nanny-nation/
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