Crashed

by Adam Tooze

  70. B. Eichengreen, Hall of Mirrors.

  71. https://www.facebook.com/notes/randy-fellmy/transcript-of-larry-summers-speech-at-the-imf-economic-forum-nov-8-2013/585630634864563/.

  CHAPTER 19: AMERICAN GOTHIC

  1. https://www.youtube.com/watch?v=nY_T-JIDJ-c.

  2. T. J. Sugrue, The Origins of the Urban Crisis: Race and Inequality in Postwar Detroit, 2nd ed. (Princeton, NJ: Princeton University Press, 2014).

  3. L. Deng, E. Seymour, M. Dewar and J. Manning Thomas, “Saving Strong Neighborhoods from the Destruction of Mortgage Foreclosures: The Impact of Community-Based Efforts in Detroit, Michigan,” Housing Policy Debate (2017), 1–27.

  4. C. MacDonald and J. Kurth, “Foreclosures Fuel Detroit Blight, Cost City $500 Million: Risky Loans Contribute to Swaths of Empty Homes, Lost Tax Revenue,” Detroit News, June 2015.

  5. C. S. Chung, “Zombieland/The Detroit Bankruptcy: Why Debts Associated with Pensions, Benefits, and Municipal Securities Never Die and How They Are Killing Cities Like Detroit,” Fordham Urban Law Journal 41 (2014): 771–848.

  6. J. Zeitz, “Born to Run and the Decline of the American Dream,” Atlantic, August 24, 2015.

  7. S. Lemke, Inequality, Poverty and Precarity in Contemporary American Culture (New York: Palgrave, 2016).

  8. For this and the following quotes from Summers, see the transcript at D. Vinik, “Larry Summers Gave an Amazing Speech on the Biggest Economic Problem of Our Time,” Business Insider, November 17, 2013.

  9. Reinhart and Rogoff, This Time Is Different.

  10. P. Krugman, “The Big Fail,” New York Times, January 6, 2013.

  11. L. H. Summers, “US Economic Prospects: Secular Stagnation, Hysteresis, and the Zero Lower Bound,” Business Economics 49, no. 2 (2014): 65–74.

  12. For an outstanding elaboration of the breadth of Summers’s argument see B. DeLong, “Three, Four . . . Many Secular Stagnations,” Grasping Reality with Both Hands (blog), January 7, 2017, http://www.bradford-delong.com/2017/01/three-four-many-secular-stagnations.html.

  13. L. H. Summers, “The Inequality Puzzle: Piketty Book Review,” DEMOCRACY: A Journal of Ideas 32 (Spring 2014).

  14. E. Saez, “Striking It Richer: The Evolution of Top Incomes in the United States (Updated with 2012 Preliminary Estimates),” UC Berkeley, September 3, 2013 http://eml.berkeley.edu//~saez/saez-UStopincomes-2012.pdf.

  15. T. Piketty and E. Saez, “Income Inequality in the United States, 1913–1998,” Quarterly Journal of Economics 118 (2003): 1–39.

  16. Saez, “Striking It Richer.”

  17. The distortion was caused by the extremely wealthy taking advantage of a Bush-era tax loophole to log their incomes in 2012. By 2015 the share of the top 1 percent in the recovery was down to 52 percent. Gary Burtless, “Income Growth Has Been Negligible But (Surprise!) Inequality Has Narrowed Since 2007,” Brookings, July 22, 2016.

  18. Politico staff, “President Obama on Inequality (Transcript),” Politico, December 4, 2013.

  19. G. Beauchamp and L. Nelson, “The Opioid Epidemic: A Brief History,” June 2017, PainandPSA.org.

  20. Centers for Disease Control and Prevention, “Vital Signs: Overdoses of Prescription Opioid Pain Relievers—United States, 1999–2008,” Morbidity and Mortality Weekly Report 60 (2011): 1487–1492.

  21. A. Case and A. Deaton, “Rising Morbidity and Mortality in Midlife Among White Non-Hispanic Americans in the 21st Century,” Proceedings of the National Academy of Sciences 112, no. 49 (2015), 15078–15083.

  22. See, for instance, R. Reich, The Work of Nations: Preparing Ourselves for 21st Century Capitalism (New York: Vintage, 2010).

  23. W. Kimball and R. Scott, “China Trade, Outsourcing and Jobs,” Economic Policy Institute, briefing paper 385, December 11, 2014. More recent estimates put the number for job losses closer to 2 million. See David H. Autor, David Dorn and Gordon H. Hanson, “The China Shock: Learning from Labor-Market Adjustment to Large Changes in Trade,” Annual Review of Economics 8 (2016), 205–240.

  24. D. Card and J. E. DiNardo, “Skill-Biased Technological Change and Rising Wage Inequality: Some Problems and Puzzles,” Journal of Labor Economics 20.4 (2002), 733–783.

  25. R. Shapiro, “The Politics of Widening Income Inequality in the United States, 1977 to 2014,” CBPP, Georgetown University, October 2017.

  26. G. Sargent, “‘There’s Been Class Warfare for the Last 20 Years, and My Class Has Won,’” Washington Post, September 30, 2011.

  27. M. J. Lee, “Buffett: My Plan to Tax the Rich,” Politico, November 15, 2011.

  28. J. Hayward, “The Smith Project,” Breitbart, February 3, 2016, http://www.breitbart.com/big-government/2016/02/03/the-smith-project-a-look-at-the-new-american-insurgency/.

  29. M. Phelan, “Building the House of Breitbart,” Jacobin, November 5, 2016.

  30. “The Corruption in Academic Economics: INET’s Interview with Charles Ferguson,” StopForeclosureFraud.com, November 25, 2012.

  31. P. Krugman, “Challenging the Oligarchy,” New York Review of Books, December 17, 2015.

  32. P. Krugman, “Why Inequality Matters,” New York Times, December 15, 2013.

  33. Excerpt from R. B. Reich, Saving Capitalism: For the Many, Not the Few (New York: Vintage, 2015), 19.

  34. “Bernanke, Trichet, Brown Join Pimco Advisory Board,” Reuters, December 7, 2015.

  35. C. Goodhart and D. Schoenmaker, “The United States Dominates Global Investment Banking: Does It Matter for Europe?” Bruegel, March 7, 2016.

  36. A. Schechter, “Market Power and Inequality: How Big Should Antitrust’s Role Be in Reducing Inequality?,” ProMarket, July 14, 2016; and E. Porter, “With Competition in Tatters, the Rip of Inequality Widens,” July 12, 2016. And the panel debate documented by A. Schechter, “Is There a Connection Between Market Concentration and the Rise in Inequality?,” 5 May, 2017, https://promarket.org/connection-market-concentration-rise-inequality/.

  37. “Too Much of a Good Thing,” Economist, March 26, 2016.

  38. J. Furman and P. Orszag, “A Firm-Level Perspective on the Role of Rents in the Rise of Inequality” (presentation at “A Just Society” Centennial Event in Honor of Joseph Stiglitz at Columbia University, October 16, 2015), http://gabriel-zucman.eu/files/teaching/FurmanOrszag15.pdf.

  39. H. M. Schwartz, “Wealth and Secular Stagnation: The Role of Industrial Organization and Intellectual Property Rights,” Russell Sage Foundation Journal 2.6 (2016): 226–249.

  40. J. Kollewe, “‘Political Crap’: Tim Cook Condemns Apple Tax Ruling,” Guardian, September 1, 2016.

  41. P. Thiel, “Competition Is for Losers,” Wall Street Journal, September 12, 2014.

  42. Piketty, Capital in the Twenty-First Century (Cambridge, MA: Harvard University Press, 2014).

  43. R. Reich, “Income Inequality in the United States” (testimony before the Joint Economic Committee, US Congress, January 16, 2014).

  44. E. McMurry, “Fox’s Hasselbeck Knocks Obama’s ‘Class Warfare’ Speech: ‘He Is the System’ He Criticizes,” MEDIAite, December 5, 2013.

  45. Mildner and Howald, “Jumping the Fiscal Cliff.”

  46. R. T. Meyers, “The Implosion of the Federal Budget Process: Triggers, Commissions, Cliffs, Sequesters, Debt Ceilings, and Shutdown,” Public Budgeting & Finance 34.4 (2014), 1–23.

  47. http://www.fixthedebt.org/.

  48. P. Orszag, “Too Much of a Good Thing,” New Republic, September 14, 2011.

  49. R. Kuttner, “Destroying the Economy and the Democrats,” American Prospect, April 5, 2013.

  50. “Public Goals, Private Interests in Debt Campaign,” New York Times, January 9, 2013.

  51. “Stacking the Deck: The Phony ‘Fix the Debt’ Campaign,” Nation, February 20, 2013.

  52. “To Understand the Budget Debate, You Need to Understand the Sequester: Here’s a Qui
ck Primer,” New Republic, September 29, 2013; and Mildner and Howald, “Jumping the Fiscal Cliff.”

  53. N. Confessore, “Senate Passes First Budget in Four Years,” Washington Post, March 23, 2013.

  54. J. Bendery, “John Boehner on Debt Ceiling: Let’s Pay China First, Then US Troops,” Huffington Post, May 8, 2013.

  55. J. Cohn, “Don’t Blame the Tea Party for the Shutdown. Blame Boehner,” New Republic, September 30, 2013.

  56. S. M. Burwell, “Impacts and Costs of the Government Shutdown,” White House archives, November 7, 2013.

  57. R. Radosh, “Steve Bannon, Trump’s Top Guy, Told Me He Was ‘a Leninist,’” Daily Beast, August 22, 2016.

  58. A. Crooke, “Steve Bannon’s Apocalyptic ‘Unravelling,’” Consortium News, March 9, 2017.

  59. G. Steinhauser, “Europe Enjoys ‘Shutdownfreude’ over US Debt Troubles,” Wall Street Journal, October 16, 2013.

  60. M. Hujer and D. Sander, “US Fumbling Puts China at Risk,” Der Spiegel, October 22, 2013.

  61. D. Roberts, “China’s State Press Calls for ‘Building a de-Americanized World,’” Bloomberg Businessweek, October 14, 2013..

  62. M. Park, “US Shutdown: How the World Reacted,” CNN, October 1, 2013.

  63. R. McGregor, “Congressional Impasse on IMF Shows the Tight Spot Obama Is In,” Financial Times, January 27, 2014.

  64. J. Mayer, Dark Money (New York: Doubleday, 2016).

  65. N. Hemmer, “The Chamber of Commerce Is Fed Up with the Tea Party,” U.S. News & World Report, December 31, 2013.

  66. P. Hamby, “Company Men: The US Chamber Flexes Its New Political Muscle,” CNN, July 22, 2014, http://cnn.it/1tMAhvT.

  67. E. Eichelberger, “How the Tea Party Is Causing Big Business to Back Democrats,” Mother Jones, September 15, 2014.

  68. A. Altman, “The US Chamber of Commerce Is Saving the GOP Establishment at Ballot Box,” Time, July 14, 2014.

  CHAPTER 20: TAPER TANTRUM

  1. “Federal Reserve Board Announces Reserve Bank Income and Expense Data and Transfers to the Treasury for 2015” (press release, Board of Governors of the Federal Reserve System, January 11, 2016).

  2. For a careful econometric analysis using global data see M. Fratzscher, M. Lo Duca and R. Straub, “On the International Spillovers of US Quantitative Easing,” Economic Journal (2016), doi:10.1111/ecoj.12435.

  3. “A Marriage of Convenience Comes to an End,” Financial Times, October 17, 2014.

  4. On the importance of the interaction of interest rate and exchange rate movement see B. S. Bernanke, “Federal Reserve Policy in an International Context,” IMF Economic Review 65.1 (2017), 5–36.

  5. R. N. McCauley, P. McGuire and V. Sushko, “Dollar Credit to Emerging Market Economies 1,” BIS Quarterly Review (2015), 27.

  6. “Zambia Raises $750 mln in Debut 10-Year Eurobond,” Reuters, September 13, 2012.

  7. R. Wigglesworth, “Zambia Makes Bond Market Return,” Financial Times, April 7, 2014.

  8. “The Dollar’s Strength Is a Problem for the World,” Economist, December 3, 2016.

  9. K. Miyajima and I. Shim, “Asset Managers in Emerging Market Economies,” BIS Quarterly Review, September 14, 2014.

  10. IMF, “The Asset Management Industry and Financial Stability: Chapter 3,” Global Financial Stability Report: Navigating Monetary Policy Challenges and Managing Risks, April 2015.

  11. IMF, Global Financial Stability Report, April 2015.

  12. “The Never-Ending Story,” Economist, November 14, 2015.

  13. On the global credit cycle see the highly influential paper by Hélène Rey, originally delivered in August 2013 at Jackson Hole, “Dilemma Not Trilemma: The Global Financial Cycle and Monetary Policy Independence” (NBER Working Paper 21162, May 2015). On the evolution of the IMF’s view on capital controls see IMF Survey, “IMF Adopts Institutional View on Capital Flows,” December 3, 2012, http://www.imf.org/en/News/Articles/2015/09/28/04/53/sopol120312a.

  14. “Just in Case: Capital Controls Are Back as Part of Many Countries’ Financial Armoury,” Economist, October 13, 2013.

  15. C. Jones, R. Wigglesworth and J. Politi, “Fed Fights Back Against ‘Feral Hogs,’” Financial Times, June 24, 2013.

  16. P. da Costa and A. Bull, “Bernanke Says More Progress Needed Before Stimulus Pullback,” Reuters, May 22, 2013.

  17. “The Dollar’s Strength Is a Problem for the World.”

  18. Miyajima and Shim, “Asset Managers in Emerging Market Economies.”

  19. K. Forbes, “Don’t Rush to Blame the Fed,” New York Times, February 5, 2014.

  20. “Just in Case.”

  21. See the forceful restrospective defense of Fed policy offered by B. S. Bernanke, “Federal Reserve Policy in an International Context,” IMF Economic Review 65.1 (2017), 5–36.

  22. J. Frankel, C. Reinhart and B. Zoellick, “The Fed and Emerging Markets: Another Crash?,” Belfer Center, Harvard Kennedy School, May 15, 2014.

  23. B. Eichengreen and P. Gupta, “Tapering Talk: The Impact of Expectations of Reduced Federal Reserve Security Purchases on Emerging Markets,” CEPR’s Policy Portal, December 19, 2013.

  24. “Raghu’s Reality Check,” Economist, September 20, 2013.

  25. C. Tugal, The Fall of the Turkish Model: How the Arab Uprisings Brought Down Islamic Liberalism (New York: Verso, 2016), Kindle locations 3–5.

  26. “Turkish Police Use Water Cannon to Disperse Remembrance Gathering,” Guardian, June 22, 2013; and D. Dombey, “Erdogan Hits at Financiers in Effort to Quell Turkey Protests,” Financial Times, June 10, 2013.

  27. D. Dombey, “Erdogan Says Same Forces Behind Brazil and Turkey Protests,” Financial Times, June 23, 2013.

  28. M. Champion, “Is Erdogan’s Turkey the Next Putin’s Russia?,” Bloomberg, June 5, 2013.

  29. “Fed Officials Rebuff Coordination Calls as QE Taper Looms,” Livemint, August 26, 2013.

  30. R. Harding et al., “India’s Raghuram Rajan Hits Out at Unco-ordinated Global Policy,” Financial Times, January 30, 2014.

  31. “Fed Officials Rebuff Coordination Calls as QE Taper Looms.”

  32. R. Harding, “Why Emerging Markets Are Unlikely to Sway the Fed,” Financial Times, February 2, 2014.

  33. “Federal Reserve Won’t Consider Problems Abroad,” Boston Globe, August 26, 2013.

  34. P. da Costa, A. Bull, “Fed Surprises, Sticks to Stimulus as It Cuts Growth Outlook,” Reuters, September 18, 2013.

  35. A. Fontevecchia, “Bernanke Keeps the Printing Press at Full Speed as Taper Decision Likely to Fall on Yellen,” Forbes, October 30, 2013.

  36. K. Lansing and B. Pyle, “Persistent Overoptimism About Economic Growth,” Federal Reserve Bank of San Francisco Economic Letter, February 2, 2015.

  37. A. Kaletsky, “The Markets and Bernanke’s ‘Taper Tantrums,’” Reuters, September 19, 2013.

  38. “BlackRock’s Fink Says There Are ‘Bubble-Like Markets’ Again,” October 29, 2013, http://www.pionline.com/article/20131029/ONLINE/131029857/blackrocks-fink-says-there-are-bubble-like-markets-again.

  39. “BlackRock Admits the Fed Is Causing ‘Tremendous Distortions,’” ZeroHedge (blog), August 19, 2013.

  40. W. Gross, “Survival of the Fittest?,” Investment Outlook, Pimco, October 2013.

  41. Gross, “Survival of the Fittest?”

  42. T. Alloway, “A Marriage of Convenience Comes to an End,” Financial Times, October 17, 2014.

  43. Ibid.

  44. D. Ranasinghe, “Best Performing Currency in September? India’s Rupee,” CNBC, October 8, 2013.

  45. “Federal Reserve and Other Central Banks Convert Temporary Bilateral Liquidity Swap Arrangements to Standing Arrangements,” Board of Governors of the Federal Reserve System, October 31, 2013.

  46. The deepest exploration of its logic is P. Mehrl
ing, “Elasticity and Discipline in the Global Swap Network,” International Journal of Political Economy 44.4 (2015), 311–324.

  47. T. Nakamichi, “Japan to Double Indonesia, Philippines Swap Lines,” Wall Street Journal, December 6, 2013.

  48. “Fed Officials Rebuff Coordination Calls as QE Taper Looms,” Livemint, August 26, 2013.

  49. E. Macaskill and G. Dance, “The NSA Files,” Guardian, November 1, 2013.

  CHAPTER 21: “F*** THE EU”: THE UKRAINE CRISIS

  1. S. G. Brooks, G. J. Ikenberry and W. C. Wohlforth, “Don’t Come Home, America: The Case Against Retrenchment,” International Security 37, no. 3 (Winter 2012–2013), 7–51; and S. M. Walt, “More or Less: The Debate on US Grand Strategy,” Foreign Policy, January 2, 2013.

  2. M. Landler, Alter Egos: Hillary Clinton, Barack Obama, and the Twilight Struggle over American Power (New York: Random House, 2016); and K. Campbell, The Pivot: The Future of American Statecraft in Asia (New York: Twelve, 2016).

  3. G. Resnick, “Inside the New Hillary Clinton Emails: All the Secretary’s Yes Men,” Daily Beast, September 1, 2015.

  4. G. J. Ikenberry, “The Illusion of Geopolitics,” Foreign Affairs (May/June 2014).

  5. “Political Staple,” Economist, December 2, 2013. For the background of strategic competition in East Asia see the valuable overview by G. Rachman, Easternization: Asia’s Rise and America’s Decline (New York: Other Press, 2016).

  6. J. Xi, “Gut für China, Europa und die Welt,” Frankfurter Allgemeine, March 28, 2014.

  7. S. Farrell, “City of London Boosted by China Currency Trading Move,” Guardian, June 18, 2014.

  8. N. Watt, P. Lewis and T. Branigan, “US Anger at Britain Joining Chinese-Led Investment Bank AIIB,” Guardian, March 12, 2015.

  9. G. Rachman, “China’s Money Magnet Pulls in US Allies,” Financial Times, March 16, 2015.

  10. G. Dyer and G. Parker, “US Attacks UK’s ‘Constant Accommodation’ with China,” Financial Times, March 12, 2015.

  11. Ibid.

  12. G. Parker, A.-S. Chassany and G. Dyer, “Europeans Defy US to Join China-Led Development Bank,” Financial Times, March 16, 2015.