Rana Foroohar’s “Makers and Takers”

Paleo Retiree writes:

This is a terrific journalistic account of how our economy and our financial life have come to their current awful states. (Full disclosure: I knew the author a wee bit back in my magazine days, and I liked and respected her.) Foroohar’s book is in the responsible-establishment mode of Johnson and Kwak’s “13 Bankers” and Charles Ferguson’s “Inside Job.” An assumption of these works is that smart people of good will could run the economy fairly and effectively if only they were 1) well-informed and 2) put in charge, something I’m not so sure of. So it isn’t a thrilling or visionary book. That said, it’s also not something you’d need to hide if you were reading it in public for fear of being labeled a crackpot. Instead, it’s informative, it’s substantial, it’s superclear — and, at least so far as the how-we-got-here side of things goes, I found it completely convincing.

Foroohar’s thesis is that the economy consists of makers (people who create genuine goods and services) and takers (people — mostly bankers and finance folks — who skim off wealth without adding much of value), and that since the 1970s the takers have managed to hijack not just the economy but the country. We’re now serving our bankers and speculators (but I repeat myself) rather than vice versa. How do we get these relationships back to how they ought to be? She covers taxes, retirement funds, business-school educations, stock buybacks, derivatives, regulations … I’m in a lazy mood today so, for a set of examples, I’m going to copy and paste some of the book’s excellent bullet-point publicity material:

    • Thanks to 40 years of policy changes and bad decisions, only about 15 % of all the money in our market system actually ends up in the real economy – the rest stays within the closed loop of finance itself.
    • The financial sector takes a quarter of all corporate profits in this country while creating only 4 % of American jobs.
    • The tax code continues to favor debt over equity, making it easier for companies to hoard cash overseas rather than reinvest it on our shores.
    • Our biggest and most profitable corporations are investing more money in stock buybacks than in research and innovation.
    • And, still, the majority of the financial regulations promised after the 2008 meltdown have yet come to pass, thanks to cozy relationship between our lawmakers and the country’s wealthiest financiers.

As a business-gone-out-of-control read goes, “Makers and Takers” isn’t a rowdy yarn that’s bursting with personalities and outrages (as, say, 1989’s “Barbarians at the Gate” was) — this isn’t a book that’s likely to be turned into a cable-TV movie. And the last few chapters feel as though Foroohar was in a hurry to make her deadline. But Foroohar is a first-class reporter, and her book has its own satisfying brand of sober colorfulness. For one thing, she’s remarkably thoughtful for someone who has spent years chasing after the news. She also has solid instincts, and she puts her contacts and years of experience to excellent and resourceful use. And hats off to her for possessing a genuinely giant — and all-too-rare — gift for turning complex financial-world boondoggles and schemes into vivid plain English. There were almost no moments in the book when I felt swamped by jargon, or when I couldn’t follow along. Given my blockheadedness where financial matters go, that’s really saying something.

Since 2008 I’ve spent a lot of my intellectual-curiosity time exploring books, blogs, documentaries, podcasts and such about the financial collapse, and of them “Makers and Takers” is one of the three or four sources I’d recommend most enthusiastically. It’s a great way to get quickly up to speed.

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About Paleo Retiree

Onetime media flunky and movie buff, formerly Michael Blowhard. Now a rootless parasite on a quest to find the perfectly-crafted artisanal cocktail.
This entry was posted in Books Publishing and Writing, Politics and Economics and tagged , , , . Bookmark the permalink.

5 Responses to Rana Foroohar’s “Makers and Takers”

  1. Revyen says:

    “Since 2008 I’ve spent a lot of my intellectual-curiosity time exploring books, blogs, documentaries, podcasts and such about the financial collapse, and of them “Makers and Takers” is one of the three or four sources I’d recommend most enthusiastically. It’s a great way to get quickly up to speed.”

    If so then you absolutely have to read David Stockman’s book on the crisis. He is as brilliant as they come with deep knowledge of economics, experience in politics(Reagan’s OMB) and in finance(Blackstone). One reason he has been probably the best financial journalist since the crisis.
    This interview is well worth watching:
    https://www.c-span.org/video/?311856-1/qa-david-stockman

    Like

  2. Pingback: Our Favorite Things in 2016 | Uncouth Reflections

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