If you only read one book on the global financial crisis, it should be Econned by 'Yves Smith', an entertaining, thorough and damning indictment of the way that Western economists, bankers and politicians together messed up - and are still messing up - the global financial and economic system.
Smith relentlessly and remorselessly exposes the great con game that is called 'free markets', a potent brew of bad economics, self-serving ideology and plain old greed. The conclusion is grim: ''Free markets' ideology, with its libertarian idealism, has in fact produced Mussolini-style corporatism. And until we learn to call the resultant looting by its proper name, it is certain to continue.'
I put 'Yves Smith' in quotation marks because the author is more of an Eve than an Yves, a vivacious blonde. But she is a Smith faithful to the much-maligned misquoted guru of the market, Adam. She notes that Adam Smith's faith in the 'invisible hand' of the market was much less than the 'simplistic ideology that now dominates university economics departments.
'[Adam] Smith also pointed out that self-interested actions frequently lead to injustice or even ruin. He fiercely criticised both how employers colluded ... to keep wages low, as well as the 'savage injustice' that European mercantilist interests had 'commit(ted) with impunity' in colonies in Asia and the Americas.'
'Yves Smith' is gloomy about any easy exit from the mess, not least because of the size and complexity of the problem, and that key political players are part of the system. Her first prescription for change is blunt. 'Get rid of Summers and Geithner,' she said in New York a few weeks ago, referring to White House economic supremo Larry Summers and Treasury Secretary Timothy Geithner.
Smith is not some lightweight or mere academic. She lives and works in finance. As Susan Webber, her real name, she graduated from Harvard College and Harvard Business School, worked for Goldman Sachs when it was a partnership, then spent time with consultancy McKinsey. Before she was 30, Sumitomo Bank asked her to start a mergers and acquisitions department in New York. She said it 'was a crazy thing to do, like that line from Milton about those who would rather rule in hell than serve in heaven. It was one of those kind of jobs'.