Devlin Leonard: A Writerly Approach to the Financial Crisis
One of the aftereffects of the financial crisis has been a flood of books promising to explain it. There have been books by economists, journalists, politicians, Wall Street insiders and even a federal judge, Richard Posner, who has produced more than 40 other books, and evidently couldn’t resist the temptation to churn out one on this subject.
What has been hard to find is a book about the disaster by a writer with literary bona fides. But now comes “I.O.U.: Why Everyone Owes Everyone and No One Can Pay,” by John Lanchester (Simon & Schuster, $25)....
Mr. Lanchester suggests that there are larger cultural forces at play. He traces the roots of the crisis to the fall of the Berlin Wall in 1989. Before this transformative moment, he writes, Western democracies kept their banks on a relatively short leash. Otherwise, he says, they might have forfeited whatever moral authority they enjoyed over their Communist foes.
“The jet engine of capitalism,” Mr. Lanchester writes, “was harnessed to the oxcart of social justice, to much bleating from the advocates of pure capitalism, but with the effect that the Western liberal democracies became the most admirable societies that the world has ever seen.”
But when the Soviet Union fell, Mr. Lanchester laments, so did the checks and balances on capitalism. After that, he says, the forces of capitalism, particularly the harsher variety practiced in the United States and Britain, held a two-decade-long victory party.
Emboldened by their triumph, he writes, bankers made shameless demands of their governments and got nearly everything they wanted, including the right to trade dangerously complex securities with virtually no regulation....
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What has been hard to find is a book about the disaster by a writer with literary bona fides. But now comes “I.O.U.: Why Everyone Owes Everyone and No One Can Pay,” by John Lanchester (Simon & Schuster, $25)....
Mr. Lanchester suggests that there are larger cultural forces at play. He traces the roots of the crisis to the fall of the Berlin Wall in 1989. Before this transformative moment, he writes, Western democracies kept their banks on a relatively short leash. Otherwise, he says, they might have forfeited whatever moral authority they enjoyed over their Communist foes.
“The jet engine of capitalism,” Mr. Lanchester writes, “was harnessed to the oxcart of social justice, to much bleating from the advocates of pure capitalism, but with the effect that the Western liberal democracies became the most admirable societies that the world has ever seen.”
But when the Soviet Union fell, Mr. Lanchester laments, so did the checks and balances on capitalism. After that, he says, the forces of capitalism, particularly the harsher variety practiced in the United States and Britain, held a two-decade-long victory party.
Emboldened by their triumph, he writes, bankers made shameless demands of their governments and got nearly everything they wanted, including the right to trade dangerously complex securities with virtually no regulation....