- Author: Charles Ferguson
- Published: May, 2012
Predator Nation is an infuriating, sobering and scathing indictment of the forces and actors responsible for the global financial crisis of 2008. Written by the brilliant Charles Ferguson as a follow up to his Oscar Winning documentary Inside Job, it’s the definitive account of the 2008 meltdown that many have been longing to read. A no-bullshit take on the greed, corruption and collusion that continues to run rampant amongst huge swaths of our financial and political elite. Names are named. Evidence is submitted. All events and accounts are thoroughly researched. The result is a fuming catharsis.
It’s hard not to grow irritated when people overcomplicate the history that lead our country to that disastrous September. Realists know that America has been on a downward trajectory for quite some time. In the 1970’s the U.S. economy was finally starting to feel the effects of global capitalism. “The initial source of American decline,” Ferguson writes, “was the complacency of American Industry, permitted by the concentration and global dominance of what then constituted the core of the U.S. (and world) economy. In part because WWII had devastated most potential competitors, and in part due to the enormous size of the U.S. domestic market, American industry faced no serious competition, either foreign or domestic, for a quarter-century after the war.” In short, dominance and easy profits led to mismanagement, inefficiency, bloated and detached executives, rigid union contracts, and monopolies. American industry had grown fat and lazy. “Automobiles, steel, telecommunications, mainframe computers, minicomputers, photocopiers, cameras and film, semiconductors, and consumer electronics,” all suddenly faced stiffer competition from overseas. Rather than compete with emerging technology and manufacturing from places like Japan, China, Germany etc. many corporate managers instead took the far easier route. “They discovered that buying people off was much easier than doing their job properly,” Ferguson writes. Thus private corporations began to aggressively wield political influence and lobbying power on a scale never before seen. Their demands were predictable: lower tax rates, deregulation, and approval of mergers and acquisitions amongst competitors. It worked all too well. American government officials, with their paltry salaries and eagerness to please, proved ripe for the picking.
Things started to get really hot and heavy under the cheerful negligence of C-list movie star Ronald Reagan. “In the wake of the 1973 and 1979 oil shocks,” Ferguson writes, “The stock market and all financial institutions suffered badly. Inflation grew so severe that in 1981 three month treasury bills briefly paid sixteen percent interest.” Thus, the stage was set for the Reagan administration to unveil their brilliant plan to get business growing again: Give business, exactly what it wants. Subsequent administrations have largely followed suit. And thus began the deliberate, methodical destruction of the sophisticated and well-thought out architecture put in place after the Great Depression. The demise of the Glass-Steagal Act under Bill Clinton, being perhaps the most damaging.
Ferguson patiently guides the reader through the painful effects of deregulation. The Savings and Loans Crisis, the demise of Long Term Capital Management, (the irony of that name still depresses me), Enron, the dot-com bubble, and finally the unqualified downfall of our entire financial system. No one is spared under Ferguson’s sharp eye, in particular Barack Obama, the one President who it can be argued actually had the momentum and mandate to really change things. Instead, as we have painfully seen, he sided with the the Larry Summers, Robert Rubins and Alan Greenspans of the world. Men who have largely been discredited, but who’s toxic influence is still felt throughout academia and boardrooms to this day.
The most refreshing part of Predator Nation may be the fact the Ferguson is no romantic. He feels no need to hand-hold his reader with predictions of a brighter tomorrow. The fact that not one banker has faced trial for the fraud, corruption, perjury and misc. other crimes committed during the crisis is proof that the amoral Plutocracy is still firmly in control. I found one passage, particularly scary: “For most of American history, the American people have responded well to challenges, including dangerous or corrupt leadership. But this is the first time that America has faced a combination of structural political corruption, rising inequality, and long-term economic decline.” It’s quite the perfect storm. Ferguson believes that if Americans could stop fighting over cultural issues and unite behind broad-based changes, we might stand a chance. “Improving educational opportunity, bringing the financial sector under control, controlling the impact of money in politics, reforming the tax system, strengthening anti-trust policy and creating a truly universal high-speed broadband internet structure” are all his keys to clawing back from a future of subsistance living for 90% of the population. Unfortunately, it seems that things might have to get a whole lot worse before the tea party realizes they should be marching right alongside Occupy Wallstreet.