The 2009 President's Book Award Winner
(Conferred annually by the Social Science History Association for the best first book manuscript in the interdisciplinary field of social science history)
Greta R Krippner
Capitalizing on Crisis: Political Origins of the Rise of Finance in the U.S. Economy.
Greta Krippner demonstrates in Capitalizing on Crisis how the financialization of the U.S. economy brought financial rather than productive activities into a dominant economic position. Through exhaustive research, she links financialization to the social politics of deregulation of the 1970s and the global finances of the Reagan era and the resultant U.S. monetary economy to the year 2001. She emphasizes the complicated evolution of financialization rather than presenting these developments as the outgrowth of one conscious policy or the actions of a small number of agents. "Unintended consequences" play a large part in her story. Unfortunately, that is not very comforting - it makes the problem of untangling our current crisis that much more daunting.
Krippner brings an important institutional dimension to the analysis of monetary policy. For example, her discussion in chapter 5 of the Fed's desire to maintain targeted rates of growth in the money supply emphasizes that this "non-policy" policy, a kind of automatic adjustment process, gave the Fed political cover, creating the sense that interest rate fluctuations were a natural outgrowth of market processes. This excellent point helps the reader to see very concretely how these "natural processes" are shaped within institutional contexts, even when the institutions in question want to minimize the visibility of their role.
This exploration took Krippner to congressional records, cabinet meeting minutes housed in the Reagan presidential library, corporate income tax returns, and to the minutes of federal reserve policy committee meetings, as well as to interviews with a large cast of players. Her book is an extraordinarily efficient presentation of a challenging topic. Because her discussion moves along nicely, without getting bogged down in too much technical detail, it remains accessible to researchers who are not experts in finance, money or banking.
In sum, Greta Krippner has brought to light the fundamental changes in the U.S. economy that have proven to be so crucial to the present.