BOOK REVIEW


Broken Bargain: Bankers, Bailouts, and the Struggle to Tame Wall Street by Kathleen Day

440 pages. $35.00 hardcover.

Publisher: Yale University Press (January 8, 2019)

Excellent history of  how deregulation of the banks led to three recent US financial crises - the 1920s Depression, the 1980s, and the 2000s. The "bargain" that was broken was that, during the efforts to control the 1930s Depression, US bankers were given what amounts to a safety net in exchange for regulations promoting transparency, record-keeping and anti-fraud behaviors, and reasonable fiduciary responsibilities. Subsequently, the stability of the financial markets and the larger economy were undermined by the gutting and non-enforcement of the rules. The markets fell, the financial institutions sank, and taxpayers got stuck with the bill. For breaking the rules, almost no one was punished - or had learned a lesson - in the financial sector. The book also has suggestions for correction, reform, and enforcement.