Toronto Book Review



The flaws within the financial system, as meticulously detailed by economist Epstein, underscore its inherent bias towards the affluent while neglecting the needs of ordinary consumers. While acknowledging finance’s crucial role in economic dynamics, Epstein highlights its potential for stagnation, instability, and exacerbation of inequality. This reality was starkly evident during the 2007-2008 financial crisis, where corporations and financial institutions emerged unscathed while taxpayers bore the brunt, with costs ranging from $50,000 to $120,000 per household, disproportionately affecting middle and lower-income families.

Epstein pinpoints systemic flaws, such as speculative practices divorced from genuine economic health. Speculators often bet on stock price fluctuations rather than the underlying success or failure of the associated companies, leading to distortions in the market. He traces the roots of these issues back to the Reagan era, marked by the deregulation of the financial industry, which catalyzed a departure from the stable growth experienced globally between 1945 and 1980.

Central to Epstein’s critique is the complicity of influential economists in shaping policy conducive to the interests of financial elites. He argues that their advocacy for deregulation contributed to the crisis rather than mitigating it. In response, Epstein advocates for sweeping reforms, emphasizing the necessity of robust regulatory measures. Additionally, he champions the expansion of the public banking sector, envisaging institutions focused on public service rather than profit, offering low-cost services, and facilitating access to affordable credit for small-scale investments, education, and housing.

Epstein’s analysis offers a sobering perspective on the systemic failures of the financial system, highlighting the potential for rectification through political and economic action. By acknowledging these issues and fostering the necessary will for change, policymakers can address the inequalities ingrained within the system.

Embracing Epstein’s proposals for regulatory reform and bolstering public banking could pave the way for a fairer and more resilient financial landscape, better equipped to serve the needs of all members of society.

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