Tuesday, 21 July 2009

Of Fool's Gold, Belatedly

I've only just finished the book: and it is what everyone says it is, a sparkling good read. It is beautifully written with a clarity which most financial commentators can only aspire to. At a personal level I found her authorial 'voice' deeply humane. But it is told as a morality tale of small group psychology: the unstated implication throughout is that if only everyone was as sensible as the JP Morgan gang she foregrounds then things wouldn't have gone so wrong. History only make an appearance in the book in the form of hallowed company traditions; power structures are only 'the regulators'. Despite her clear understanding of the way in which the selling and reselling of increasingly complex derivatives let to a chain of unquantifiable risk linking the big institutions and national economies together she doesn't really present capitalist finance as a system. The best short assessment I've come across is a review by a commentator called Brigg57 on the Red Pepper discussion boards of all places.

I suspect the book is good enough to become the default 'popular' (i.e. used by the non specialist media) account of the origins of the credit crunch, a sort of Galbraith's Great Crash of 1929 in miniature. But it's not a critical account in any structural sense whereas Galbraith's book drips with contempt for the main players of 1929 and their methods. Which might be why Donald McKenzie in the LRB found so much in the Tett book to agree with.

So we still await an influential view on the current crisis which might politically resonate with the the deep if often inchoate unease at what the financial sector has actually done to our economy, society and state finances.

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