Bailout Nation by Barry Ritholtz John Wiley (2009)

Review by Hazel Henderson

Both of these books are excellent accounts of the 2008-2009 financial meltdown – from different and complementary perspectives.  Barry Ritholtz is an irreverent Wall Street insider with a bare knuckles critique of the “idiotic” bankers and other big players who brought down the system.  Les Leopold’s clear account of why we allowed the

financial sector to run amok is from the perspective of the public sector, labor unions and NGOs.  Both authors come up with the most likely ways to return finance to its limited role as servicing the real Main Street productive sectors.

The Looting of America by Les Leopold Chelsea Green (2009)

There is a window of opportunity today for the needed re-structuring and downsizing of financial sectors worldwide.

Leopold advocates 1% fees on all financial transactions, starting with $4 trillion of daily currency trading as I have advocated for over 15 years (see, for example, the Foreign Exchange Transaction Reporting System (FXTRS) and my Building a Win-Win World (1996).

Many other sensible reforms are outlined by both authors, from Leopold’s call for increasing the minimum wage and linking it to inflation, strengthening unions, and passing the Employee Free Choice Act.  Ritholtz’s ideas are mostly gleaned from his Wall Street friends, the best of which are additional financing of renewable energy and a new GI Bill of $50,000 for all service people on active duty to buy houses or for other self-development purposes.  Leopold’s best idea is assessing all financial firms with a small (below 1%) premium to insure against the structural instabilities of even well-regulated financial markets.

These authors assess the endemic instabilities of financial markets which have been documented by the succession of booms, busts, recessions and panics over hundreds of years.  Experts from John Maynard Keynes and Hyman Minsky to contemporary accounts by Nassim Nicholas Taleb in The Black Swan (2007) and Richard Bookstaber in  A Demon of Our Own Design (2007) have driven the point home: markets are neither efficient nor rational and the “invisible hand” described by Adam Smith in his Wealth of Nations (1776) is a myth.  Barry Ritholtz’s Bailout Nation provides a witty and devastating look from the inside.

Leopold is equally knowledgeable but focuses on how states, municipalities and school boards were duped by Wall Street con artists.  Ritholtz is clearer about facing up to the problems of the Obama Administration’s own links to Wall Street (his presidential campaign received many hundreds of thousands of dollars from the top companies who caused the financial crisis).  Both warn about how we need to watch all the Goldman Sachs insiders throughout the Treasury Department and its Secretary Timothy Geithner, former president of the New York Federal Reserve, a private company registered in Delaware.  Ritholtz targets former hedge fund executive Larry Summers, who was Bill Clinton’s Treasury Secretary and helped create the financial crisis and the credit default swap mess (see my “Come Clean Larry Summers“).  Both single out the heroism of Brooksley Born and her warnings in the 1990s about derivatives, as chair of the Commodities Futures Trading Commission (CFTC).  Leopold does not delve into the fundamental problems in the way our money is created as debt by banks out of thin air in the fractional reserve banking system.  Ritholtz covers this key issue well.  Fairer money-creation and credit-allocation are also essential reforms (see Reforming Global Finance).

These books are essential reading and I recommend them both highly.  The next developments will come from the UN General Assembly and how it acts on its Stiglitz Commission recommendations – among others, for a new global reserve currency to replace the US dollar.  We will continue to report and analyze these developments.

Hazel Henderson is author of Ethical Markets: Growing the Green Economy (Chelsea Green 2006) and eight other books.  She is founder and president of Ethical Markets Media, a renowned futurist and alternative economist.  She co-developed the Calvert-Henderson Quality of Life Indicators, regularly updated at  She is a syndicated columnist for IPS and posts commentary and analysis at and