Different crowd, same message
I recently had the privilege of attending a small conference at UMass/Amherst in honor of progressive financial guru Jane D’Arista. Details about the conference (The Political Economy of Monetary Policy and Financial Regulation) and about its sponsor, the Political Economy Research Institute (PERI), are available here.
Jane worked for a dozen years as a key staffer on the House Banking Committee under Texas populist Wright Pattman in the 1960s and 1970s – only to be summarily fired (after Pattman left the chairmanship of the committee) on the basis that she wasn’t actually a credentialed economist! Most recently she has been director of programs for the Financial Markets Center.
I first met Jane when we were both part a group convened by the Economic Policy Institute to produce a 1993 book, Transforming the U.S. Financial System: Equity and Efficiency for the 21st Century. My chapter focused on community reinvestment and fair lending. The chapter on the “parallel banking system” that Jane authored with Tom Schlesinger was a remarkably prescient look at how the ongoing dismantling of the financial regulatory system would lead to the sort of financial meltdown that we’re now experiencing. (The book is now out of print, but a version of Jane and Tom’s chapter is available here as an EPI briefing paper.)
The conference, like Jane’s work, was primarily about what could be called the “macroeconomics” of finance – concerned, that is, with the effects on the financial system on the overall level economic activity, booms and busts, and periodic crises. My own work has been more concerned with the “microeconomics” of finance, especially issues such as redlining, racial discrimination, and predatory lending. In one other respect, as well, the scene in Amherst was strikingly different from the meetings that I generally attend as AFFIL’s Executive Director – there wasn’t a lawyer in sight!
Nevertheless, and the reason that I’m writing about this here at all, is that the consensus takeaway message from the conference was precisely parallel to the major message of AFFIL and its partners: Financial deregulation and non-regulation have gotten us into an predictable (and predicted) set of costly disasters – and there is an acute need to impose effective regulation over the financial institutions whose unregulated self-seeking behavior have gotten us into the messes we are in today.
