Jerry Epstein for Busting the Bankers’ Club

Busting the Bankers’ Club: Finance for the Rest of Us by Gerald A. Epstein (January 24, 2024, University of California Press, ISBN: 9780520385641) presents a comprehensive and accessible history of the “Bankers’ Club” — the array of financial, regulatory, and political institutions and individuals that have systematically consolidated wealth and power over the last century. To break the Club’s hold on American politics and banking, Epstein advances a visionary blueprint for a community-oriented financial system that promotes greater equity, redirects financial resources toward important social goals such as community development and the fight against climate change, and levels the playing field for small businesses, entrepreneurs, and consumers through efficient and affordable financial services for the rest of us.

Epstein, co-director of the Political Economy Research Institute at the University of Massachusetts Amherst, meticulously traces the Club’s rise, detailing how it bypassed checks and balances and took on increasing risk over the past fifty years, ultimately leading to a broken financial system that favors the elite. But this wasn’t always the case; a century ago, banking served as a force for good, albeit with inherent, and well-documented, biases against African Americans, women, and many others. The industry was localized and highly regulated, resulting in prosperity and stability. But greed won out in the 70s and 80s. The banks wanted more.

What followed was a period of unimaginable growth, wealth, risk, and instability in the financial industry, driven by deregulation, big bank consolidation, and the proliferation of complex and unsecure financial instruments (ABS, MBS, CDOs, CDS, synthetic CDOs, derivatives, selling short, structured products, and so on). Now, with the emergence of cryptocurrencies and new forms of banking and speculation, we seem poised to repeat the mistakes of the past.

Fortunately, a dedicated group of banking reformers — in Congress, regulatory agencies, the academy, philanthropies, think tanks, and labor unions — is pushing for change, advocating for stricter financial regulations and financial institutions like public banks. Epstein acknowledges that these “Club Busters” face an uphill battle due to big money’s influence in politics and concludes that to reform and restructure the financial system, we will have to reduce the role of money in politics. That is, we must restore democracy itself.

Clear-eyed and hopeful, Busting the Bankers’ Club centers the individuals and groups fighting for a financial system that will better serve the needs of the marginalized and support important transitions to a greener, fairer economy. It is a must-read for those seeking to break free from the grip of the Bankers’ Club, restore democracy, and make finance work for the rest of us.

Gerald Epstein is Professor of Economics and a Founding Codirector of the Political Economy Research Institute at the University of Massachusetts, Amherst. His research focuses on political economy and progressive economic policy, especially in the areas of central banking, macroeconomic policy, and international finance. Epstein received his PhD in Economics from Princeton University and is a long-time staff economist for the Center for Popular Economics in Amherst. He is the author of The Political Economy of Central Banking: Contested Control and the Power of Finance.

This is an in-person event.