Financial crisis and ‘Other People’s Money’
If you want to find out what caused the 2008 financial crisis, you can pick up a copy of the 576-page report by the U.S. commission appointed to investigate the crisis. It’ll hit bookstores Thursday, and it’s sure to cover all of the low points – government oversights, corporate mismanagement and reckless risk-taking on Wall Street – all the issues that have dominated headlines the past couple of years.
But the book has a predecessor, of sorts – one that was first published in 1914 and coined the term “the People’s Money”. Other People’s Money and How the Bankers Use It, is a collection of essays by Louis Brandeis. It influenced Woodrow Wilson’s New Freedom agenda and Franklin Roosevelt’s New Deal. And it’s still relevant today, if you’re interested in a historical take on financial crisis.
Other People’s Money was published before Brandeis’ nomination to the U.S. Supreme Court in 1916. It was reissued and gained popularity in 1933, offering context to the 1929 stock market collapse and the subsequent fall of the banking system. It’s still available at major bookstores and online.
The report on the 2008 financial crisis may not have quite the cache or staying power that Other People’s Money has. According to the New York Times’ early review, the book “is dotted with literary flourishes.”
It calls credit-rating agencies “cogs in the wheel of financial destruction.” Paraphrasing Shakespeare’s “Julius Caesar,” it states, “The fault lies not in the stars, but in us.”
Of the banks that bought, created, packaged and sold trillions of dollars in mortgage-related securities, it says: “Like Icarus, they never feared flying ever closer to the sun.
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