CAIRO BOOKS's Description
In recent years, we've been rocked by a series of economic jolts, and all of
them seemed to revolve around finance. And the most recent, the American
mortgage meltdown, has sent shock waves around the world. Managed by the
Markets , which won the 2010 George R. Terry Book Award, offers an illuminating
account of how finance has replaced manufacturing at the center of the American
economy over the past three decades, explaining how the new finance-centered
system works, how we got here, and what challenges lay ahead.
Since the early 1980s, Gerald F. Davis shows, finance and financial
considerations have increasingly taken center stage, dramatically reshaping
American society. Corporations now have an overriding focus on creating
shareholder value, while their personnel practices no longer provide secure
employment, economic mobility, health insurance, or retirement benefits.
Instead, employees must become shareholding free-agents, left to their own
fate. Banking has shifted from the traditional role of taking in deposits and
making loans to the widespread use of "securitization," turning loans (such as
mortgages or corporate debt) into bonds owned by institutional investors. The
financial services industry is both more concentrated among large banks and
mutual funds, yet more spread out among under-regulated specialists such as
mortgage finance companies and hedge funds. And states increasingly act as
"vendors" in a global marketplace of law, emulating firms such as Nike, hiring
contractors to do much of the work of government.
As a result, individuals and households find their welfare tied to the stock
market and the mortgage market as never before. And the turbulence of recent
years starkly underscores the dangers of depending too much on financial
markets. Written in the spirit of C. Wright Mills' penetrating The Power Elite
and White Collar , this brilliant study provides an invaluable map of the
finance-driven American society.