Greta Krippner submitted Capitalizing on Crisis to Harvard University Press at the end of the summer of , before the Great Recession began. I read it as a m. Capitalizing on Crisis: The Political Origins of the Rise of Finance, by. Greta R. Krippner. Cambridge, Mass.: Harvard University Press, Hardcover, pp. PDF | On Jan 1, , Frank Dobbin and others published Review of Greta Krippner, Capitalizing on Crisis: The Political Origins of the Rise of Finance.
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In the context of the recent financial crisis, the extent to which the U.
In Capitalizing on CrisisGreta Krippner traces the longer-term historical evolution that made the rise of finance possible, arguing that this development rested on a broader transformation of the U.
Krippner argues that state policies that created conditions conducive to financialization allowed the state to avoid a series of economic, social, and political dilemmas that confronted policymakers as postwar prosperity stalled beginning in the late s and s.
Capitalizing on Crisis: The Political Origins of the Rise of Finance by Greta R. Krippner
The book capitalising on deregulation of financial markets during the s and s, encouragement of foreign capital into the U. Exhaustively researched, the book brings extensive new empirical evidence to bear on debates regarding recent caoitalizing in financial markets and the broader turn to the market that has characterized U. With Capitalizing on Crisiswe finally have a persuasive account of the roots of the financial disaster.
While most studies focus on the proximate causes, Krippner makes sense of the dramatic expansion over decades of the financial sector of the U. She explains brilliantly how and why government officials encouraged financialization as a way to solve the most vexing problems of our political economy.
Fred Block, University of California at Davis In this wonderfully researched and tightly argued book, Greta Krippner shows how the expansion of krippner financial sector in the United States not only helped delay the ‘day of reckoning’ for spendthrift American households, corporations and government, but also conveniently depoliticized the distributional conflicts that had plagued the nation since the s.
Nobody expected these providential outcomes, not even the policymakers who had opened up this space for finance in a rather ad hoc fashion, through repeated efforts to fend off crisis.
Capitalizing on Crisis — Greta R. Krippner | Harvard University Press
By the end of the process however, the markets were in charge, and government officials were only too happy –and relieved– to follow their lead. Capitalizing on Crisis is an absolute must read for anyone who cares to understand the origins of our current financial quagmire and the distributional dilemmas that policymakers inevitably and uncomfortably face.
Marion Fourcade, University of California, Berkeley Amidst the tsunami of books coming out in the wake of the recent financial crisis, Krippner’s work stands out for its unusual approach.
Rather than addressing the venality and incompetence of those with responsibility for regulating the economy, Krippner tells the history of the growth of financialization from the perspective of the regulators In her account, the regulators were searching for ad hoc responses to what were deeper, perhaps even intractable problems. The high point of the book is her magnificent analysis of the erosion of Regulation Q, in which regulators cracked open the door to financial deregulation, unleashing the massive deregulation that came later.
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Please try again later. Long story short, she defines it as 1.
What follows is the meat of the book: How exactly did the state go about pandering to the masses? Well, the building on the cover of the book is Eccles Building in Washington, where the Fed is housed. Turns out that this is not a book about the Neo-Marxist critique. So first the author discusses how Regulation Q used to work and how it regulated the supply of credit to the US economy for 40 years following the Great Depression and how, faced with rampant inflation on top of a stagnant economy the decision was taken to liberalize interest rates.
As it turns out and as we are observing in places like China today, for example credit became readily available to all, because the high price of credit created its own supply. So the abolition of Regulation Q was a big first step toward the financialization of the US economy.
Next comes the story of how Paul Volcker himself, the man who killed inflation, ushered in not one but two important trends in the history of financialization of the US economy: First, by targeting the size of the money supply rather than rates, he introduced the practice of fudging the goals of monetary policy: The idea behind targeting the money supply was to hide the fact that this would result in higher interest rates, against which people were fully prepared to complain.
Money rushed to US investments like it had never done before. This, in turn, aided financialization in two distinct ways: Reagan was able to borrow via the Treasury market amounts nobody had dreamt of before, leading to deficits that were unheard of in peacetime before his presidency 2.
For example, the auto giants had to get involved in the financing. And now unemployment is at 5. Neo-Marxist or not, I loved it. Kindle Edition Verified Purchase.
Krippner’s argument is that distributional conflict in American society during the last three decades is responsible for the emergence of the phenomenon of financialization. Krippner argues that economic and social dysfunctions arising from the Vietnam War, inflation, and the breakdown of the housing finance system provoked the state the Congress, the presidency, and monetary authorities to reform the financial system by deregulating interest rates, liberalizing capital flows, and through experimental and aggressive monetary policy.
Capitalizing on Crisis: The Political Origins of the Rise of Finance
Her close reading of US financial history is a refreshing jolt from orthodox texts that belabor the role of speculative euphoria, irrational exuberance, and banker folly. I found much to engage with and criticize in her account; the book will advance discussions about the direction of US finance. The case studies are unparalleled and highly original. It is obvious that Krippner read through the minutes of every Federal Reserve Board meeting over the last few decades.
If you have ever read the meeting minutes of the Fed Ca;italizing, then you will appreciate the author’s courage in this endeavor. The author is a university professor of sociology.
The book will appeal to graduate students, like myself, who are interested in the historical development of the US economy. I think many general readers would also enjoy the gretq provided here, in particular those interested in financial markets, critical economics, and political economy. It is not a long book–the core material runs roughly pages.
It is not a quick read either; there is quite a bit of information contained in the three main chapters, although I found that the analytical components in the introduction and conclusion were easy to follow and well-written, if not a bit repetitive which I do not necessarily fault her for. The book is also reasonably priced at about 15 dollars on Kindle.
There are many books about the reentry broadly into American life of a more acute risk-and-reward financialization, starting loosely in the s. Personal finance has been deeply affected, so this is quite close to home for Americans at all wealth levels. This book very helpfully presents many nuts and bolts, particulars in policy actions, showing how and why that happened, stage by stage, from the onset of inflation into the s.
The motives of policymakers at each stage are skillfully described. This is a narrative we are still living, in full swing, as one can see various vogues of financialization being applied, then gradually losing effectiveness, replacing the managed, redistributive society of earlier days as the latter and the mid 20th century social contract it implied decays, and policymakers try to satisfy voters and preserve popular illusions of the American dream.
Krippner’s analysis is excellent, with one caveat — I have just begun the book, but at least in the first two chapters, it appears to be more of a rehash of the analysis she conducted in Her data only goes up to and it is clear that events have changed significantly since then. The book would have been even better, had she updated her data — I am perplexed as to why she did not. The role of dividends and buy backs shareholder value maximization have likely intensified since then.
That is an unfortunate shortcoming in the book. I recommend her article fromwhich is available on-line. Just completed the book — the conclusion is outstanding — I would recommend buying the book for that chapter alone — very thoughtful and creative analysis that I have not read before.
It encapsulates the role of the state and the turn toward finance very well! See all 11 reviews. Amazon Giveaway allows you to run promotional giveaways in order to create buzz, reward your audience, and attract new followers and customers. Learn more about Amazon Giveaway. The Political Origins of the Rise of Finance. Set up a giveaway. Customers who viewed this item also viewed. Can American Capitalism Survive?: Managed by the Markets: How Finance Re-Shaped America.
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