From Jekyll to Hyde: Exploring the Dual Nature of Finance | The Bankers' Club w/ Prof. Gerald Epstein - EP226

Economics Explored

Show host Gene Tunny interviews UMass Amherst Professor Gerald Epstein about his new book "Busting the Bankers’ Club", which is about the powerful influence of banks in politics and regulation. Epstein argues the bankers’ club maintains control through political allies and regulators. The conversation also covers financial deregulation, insufficient Dodd-Frank reforms, Quantitative Easing impacts, and alternatives like public banking and non-profit financial institutions.

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About this episode’s guest Prof. Gerald Epstein

Gerald Epstein received his Ph.D. in economics from Princeton University, is a professor of economics, and is a founding co-director of the Political Economy Research Institute (PERI) at the University of Massachusetts Amherst. He has published widely on various economic policy issues, especially in central banking and international finance. His most recent book, Busting the Bankers' Club: Finance for the Rest of Us, was forthcoming in January 2024 from the University of California Press.

What’s covered in EP226

• Banking industry's influence in politics and regulation. (0:04)
• Financial deregulation and its impact on the economy. (8:58)
• Financial system's impact on democracy and fairness. (13:24)
• Financial system issues and regulation. (16:24)
• Economic policy after the financial crisis, including impacts of Quantitative Easing. (22:50)
• Financial regulation and publicly owned institutions. (28:08)
• Public banking, crypto, and risk-taking in finance. (33:30)

Takeaways

Professor Epstein argues in this episode:

1. The "bankers’ club" of allies including politicians, central banks, and economists helps sustain the power and influence of large banks.
2. Financial deregulation in the US and weak Dodd Frank reforms failed to address issues like too-big-to-fail banks and accountability.
3. Quantitative easing policies after the financial crisis disproportionately benefited wealthy asset holders over others.
4. There is a need for more diverse public and non-profit financial institutions focused on social missions over profits.
5. Crypto poses risks if it infects the core banking system or continues high-carbon polluting practices.

Links relevant to the conversation

Gerald Epstein’s book Busting the Bankers’ Club: Finance for the Rest of Us

https://www.amazon.com/Busting-Bankers-Club-Finance-Rest/dp/0520385640

Working paper co-authored by Prof. Epstein “Did Quantitative Easing Increase Income Inequality?”

https://www.ineteconomics.org/research/research-papers/did-quantitative-easing-increase-income-inequality

Thanks to Obsidian Productions for mixing the episode and to the show’s sponsor, Gene’s consultancy business www.adepteconomics.com.au.

Full transcripts are available a few days after the episode is first published at www.economicsexplored.com.