Our current economic woes result from four decades of bad decisions, Jeff Madrick argues in Age of Greed: The Triumph of Finance and the Decline of America, 1970 to the Present. Profiling such figures as the conservative economist Milton Friedman, Presidents Nixon, Carter and Reagan, junk-bond king Michael Milken, former Federal Reserve Board chairman Alan Greenspan, and former Citigroup CEO Sandy Weill, Madrick pinpoints the players who he says "took the economy along an unfortunate, tragic path … from which it may not be possible to turn back."
See also: Excerpt from Age of Greed.
Madrick says that the recent recession was caused by anti-government ideology and greed that led to financial deregulation, wasteful investments, overblown Wall Street compensation and outright corruption. A regular contributor to the New York Review of Books, Madrick is editor of Challenge magazine, visiting professor of humanities at the Cooper Union and senior fellow at the Roosevelt Institute and the Schwartz Center for Economic Policy Analysis at the New School.
AARP Bulletin talked to him about his book.
Q. You argue that we have been living, since 1970, in an age of greed. Is this period unique in American history and, if so, why?
A. Greed rises and recedes. This was a particularly acute period of greed, comparable to the late 1800s and the 1920s. This age of greed gathered steam over 40 years. My notion of greed is that it will always accelerate unless it is checked by either a strong government or a strong cultural sense of community and cooperation. And both of those have dissolved since the 1970s. The book shows that there wasn't merely an assault on government, but also that the financial community has been seriously misallocating capital.
Q. For example?
A. In the 1980s, there were all kinds of corporate takeovers. These corporate takeovers were made with enormous amounts of debt. The interest on the debt was deductible: The government subsidized the takeovers. Those takeovers, by and large, failed. Some economists say they succeeded, they made us "lean and mean." But they were largely wasteful.
Q. Why did you structure the book as a series of profiles?
A. This history was not inevitable. It was made by people.