Charles Ferguson's 'Predator Nation: Corporate Criminals, Political Corruption, and the Hijacking of America'
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Charles Ferguson has followed up his Academy Award-winning documentary film Inside Job, with a hot potato of a new book: Predator Nation: Corporate Criminals, Political Corruption, and the Hijacking of America (Crown Business).
Ferguson, who lives at the far west end of Soho in New York City, spent a lot of time around Prince and Mercer streets when working on Inside Job, so I met him at the Mercer Hotel on the day his book was officially published.
The title of Ferguson’s book certainly gets the reader’s attention, and he powerfully delivers the goods, with a scathing, detailed history of what led to the biggest financial disaster since the Great Depression. Ferguson takes the reader on a revealing journey -- a sordid and corrupt trail that leads from the Pandora’s box of deregulation from 1980 through 2000, through the two major economic bubbles. The first was the dot.com stock market bubble of 2000, exacerbated by the terrorist attack on the World Trade Center. Then came the much larger housing/mortgage bubble, fueled by sub-prime lending and the emergence of a host of new esoteric financial tools, meant to protect investments -- in fact, they did the opposite, provoking the financial crash.
The economic disaster was driven, Ferguson writes, by a combination of “very low interest rates, pervasive dishonesty through the financial system, massive lending fraud, speculation, demand for high yield securities, and not insignificantly, a squeezed American consumer desperate to maintain living standards, and told by everyone – including George Bush and Alan Greenspan, the brokers and the banks, that home borrowing was the way to do it.”
Along the way, Ferguson debunks the right-wing meme that Freddie and Fannie Mae caused the bubble; he holds the pure private sector responsible, especially its least regulated shadow banking parts.
There have been any number of books dissecting the economic crash of 2007, and how it has left our country a hugely divided mess. The well-off, the top 10 percent, are doing fine, while much of the rest of the country is hurting or still in the dumpster of underwater mortgages and long-term joblessness. But Ferguson’s book gives a more advanced version of the story, based on the interviews and the insights he gained while producing Inside Job.
The earlier work gives Ferguson a broad sense of the consequences of his discoveries. Ferguson writes that besides the fact that the bad guys have gotten away with crimes, " ... the rise of predatory finance is both a cause and a symptom of a broader and even more disturbing change in America. The financial sector is the core of a new oligarchy that has risen to power over the past 30 years, and has profoundly changed American life. “
Ferguson writes with great clarity. His opening salvo, “Where We Are Now," is as sharp and understandable as any summary of the current economic situation available to the interested reader. Still, his assessment of the psychology of the American people is open to disagreement when he writes, “Many Americans no doubt still believe in the American Dream. One wonders how long they can maintain that illusion for America is transforming itself into one of the most unfair, most rigid, and least socially mobile of the industrial countries.”
One can’t disagree with the data that measure the rapid decline of our country, but one can certainly argue that the huge majority of Americans are fully aware of the limits of the country’s economic system, and are quite depressed as a result. As Ferguson himself documents over and over, the whole system has been corrupted by tons of political cash, lobbying and revolving doors, with almost no oversight. As a result, the average American has no political leverage and rarely any good candidates to vote for. The oligarchy Ferguson so clearly documents is fully in the driver’s seat. The American Dream is probably quite dead.
So, if I have a bone to pick with Ferguson, it's that his solutions, his prescriptions to get us out of the mess, are as naïve and vague as his analysis is extraordinary. But I don’t fully blame him, because this lack of clarity and concrete steps about how to build alternative power in this country is one that plagues almost all the best and the brightest of our critics, like Arianna Huffington, Robert Reich and many others. It's easy to wish away political corruption, and the stranglehold the banks have on our system, with hopes of political saviors, third-party candidates and legislation that has zero chance in our political climate. But in the end, political change requires many crucial ingredients like resources, grassroots organizing, media and messaging capacity, union power and much more. But it seems that most of our elite critics don’t really want to go there.
In book after book, after all the brilliant analysis and powerful storytelling, there is usually a very short section in the back that idealistically and naively expresses, in a kind of wishful thinking, handwringing way, that things really do have to change, without offering a clue as to how. As Huffington wrote in Third World Nation, "We just have to get money out of politics" or as Robert Reich, at the end of his book Aftershock: The Next Economy and America's Future, in essence says we need a third-party candidate to rescue us.