Never Let a Serious Crisis Go to Waste: How Neoliberalism Survived the Financial Meltdown
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At the onset of the Great Recession, as house prices sank and joblessness soared, many commentators concluded that the economic convictions behind the disaster would now be consigned to history. Yet in the harsh light of a new day, attacks against government intervention and the global drive for austerity are as strong as ever. Never Let a Serious Crisis Go to Waste is the definitive account of the wreckage of what passes for economic thought, and how neoliberal ideas were used to solve the very crisis they had created. Now updated with a new afterword, Philip Mirowski’s sharp and witty work provides a roadmap for those looking to escape today’s misguided economic dogma.
From the Hardcover edition.
eventually became the Dodd-Frank legislation. Of course, greater capital requirements for banks amount to no binding constraint if there is continued enhanced freedom to identify as “capital” almost anything you want (debasing its “quality”), if there is no serious confrontation with the shadow banking sector and especially the plague of repo financing, and nothing whatsoever addresses the virtues of the possibility of separation of banking functions into different insulated institutions, such as
prescribing disclosure guidelines. These same economists who mostly failed to warn of the increasing financial fragility and impending crisis also have developed a basic consensus view that favours more market-based reforms and relatively less government regulation as a way of preventing future financial meltdowns.122 This work documents a number of facts on a somewhat larger scale than the previous collection of individual anecdotes.123 It reveals that ties to the financial sector are
suggesting that the Koch deals were no different than George Soros funding INET to alter the economics profession. This, of course, was a bit of agnotological intervention in itself. Soros, whatever his faults, has restrained himself from direct intervention in INET; and indeed, one of the striking things about that organization is the substantial representation of noteworthy neoliberals in its meetings and, to a certain extent, its educational programs. The major difference between Soros and the
academics who have designed auctions. . . . Treasury is committed to get the market price as best it can.” Swagel, quoted on Greg Mankiw’s blog, dated 9/25/2008, http://gregmankiw.blogspot.com/2008/09/defense-of-paulson-plan.html (accessed 2/20/12). Whereas the quote is unattributed on this blog entry, Swagel has subsequently made clear that he was its author (Swagel, “The Financial Crisis,” p. 47). 125 For an example of the latter, see Tim Ryan, “Lesson from Saving and Loan Rescue,” Financial
seemingly refuted Modigliani-Miller theorem, Fama responded: “The experiment we never ran is, suppose the government stepped aside and let these institutions fail? How long would it have taken to unscramble everything and figure everything out? My guess is we are talking a week or two” . . . Cassidy: So you would have just let them . . . Fama: “Let them all fail. (Laughs).” Lucas flat-out refused to talk to him about the crisis. He at least had the presence of mind to realize how outrageous his