Eliot Spitzer

Released as a free ebook as part of Spitzer’s campaign, this is a fullthroated defense of going after corrupt business practices that steal billions through largely unnoticed means; the only shocking thing is that this position needs a defense.

Perhaps the most interesting to me was Spitzer’s complete willingness to embrace everything else about neoliberalism, including speaking of public schools with the same scorn as he had for the big banks—public schools are monopolists, you see, and “Competition is the elixir of capitalism.” I didn’t realize that our aim in providing education was actually to have the schools compete to outdo each other in … what exactly? Profit? He just asserts that charter schools have spurred traditional public schools to do better, which as Diane Ravitch documents is not what the evidence shows. Conceptually, the biggest problem with saying “capitalism is awesome because competition is the best way to get good outcomes, so we need regulation to preserve competition” is that one has to wonder: against whom does government compete? Intergovernmental competition is problematic because of the ways in which local governments can easily slough off various externalities onto each other—something he explicitly recognizes both with respect to private companies and even with governments, when he discusses his campaign to get the midwestern states to stop sending their pollution over New York’s skies.

Not entirely unrelatedly, Spitzer divides crimes that are undeniable, that no one disputes occurred, and crimes that are more unclear. White-collar crime is in the latter category, but he puts rape and homicide in the former—it’s loose talk on his part, but it’s loose talk from a position of privilege not afforded most women or, for example, Trayvon Martin.

That said, Spitzer’s zeal to bring down the thieves of Wall Street is commendable, and the various abuses he describes blood-boiling. A simple side note to all the financial system’s ticklike behavior on the body politic: the head of the New York Stock Exchange paid himself 99% of the NYSE’s net income, comprising over 50% of fee increases charged to members. He didn’t think he’d done anything wrong (though he did hide some of the compensation from the board), and when Spitzer left, the remaining regulators ultimately let him off the hook. As he says, “Corporations may be people, but we haven’t yet figured out how to sanction them as people.” Among his sensible suggestions: in cases of financial malfeasance, the sanctions have to include the (ir)responsible people at the top losing their jobs. (He also points out, correctly, that conservative antifederalist arguments aren’t really arguments for state control: the moment he and other state regulators started in with their wonderful experimentation and variation, it turned out that uniform national preemption was absolutely required to leave the financiers alone to work their equity-stripping magic.)… (mehr)

This book presents a very brief discussion of the topic. It's very well-reasoned. He argues that government regulation of the market is necessary because “only government can ensure integrity, transparency and fair dealing,” intervene on behalf of affected third parties and enforce ethical standards, such as minimum wage and lack of discrimination in the workplace. This seems quite self-evident (and to me, it is), but apparently there are pundits out there who pretend to believe that companies, unlike individuals, don’t need any enforceable laws to act responsibly. For those who take such arguments seriously, Spitzer shows succinctly and with concrete examples that it’s not the case. He also explains why the measures taken by US Congress and presidents after the 2008 crisis are inadequate to protect us from a similar crisis in the future (let alone, monstrously unfair to the US citizens).

This book is very well-explained, with a couple of exceptions (saying that the Voelcker rule “bars certain banks from making proprietary trades” doesn’t really explain to me why it’s “arguably the most important” rule enacted in the US after the crisis, and pointing out that the huge state debt shattered the economy “because there wasn’t enough new wealth to service the debt” doesn’t really make it clear to me how exactly state debt affects the economy and why). However, with those two exceptions, I’ve found the book very easy to follow. There were even some unexpected humorous passages thrown in, such as when the author describes how white-collar defense lawyers “argue in the alternative.”

I’ve found this a very well-written book. However I wish that in addition to it, Spitzer had published a more extensive volume that discusses in some detail all the legislature enacted in the US and in Europe after the crisis.… (mehr)