Makers and Takers audiobook cover - The Rise of Finance and the Fall of American Business

Makers and Takers

The Rise of Finance and the Fall of American Business

Rana Foroohar

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Categories:
EconomicsMoney & Investments

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Makers and Takers
Historical Parallels (1929 vs 2008)+
The Deregulation Journey+
The Shareholder Value Disease+
Blurring of Banks and Corporations+
Exploitation of the Middle Class+
Political Capture+
Fixing the System+

Quiz — Test Your Understanding

Question 1 of 8
What role did consumer credit play in the years leading up to both the Great Depression and the 2008 Great Recession?
  • A. It was primarily used to fund massive government infrastructure projects.
  • B. It was heavily restricted by the government to prevent economic bubbles.
  • C. It was used to mask severe income inequality caused by declining workers' wages.
  • D. It allowed average citizens to become the primary shareholders of large corporations.
Question 2 of 8
How did the introduction of the negotiable certificate of deposit (CD) in the late 1940s impact the banking industry?
  • A. It reinforced the strict boundaries established by the Glass-Steagall Act.
  • B. It blurred the lines between investment and commercial banking to help wealthy clients avoid tax scrutiny.
  • C. It provided middle-class families with a secure way to obtain fixed-rate mortgages.
  • D. It allowed the government to strictly control and cap bank interest rates.
Question 3 of 8
According to the book, what was the underlying cause of General Motors' failure to fix a deadly ignition switch glitch?
  • A. A lack of available technology to properly redesign the faulty part.
  • B. Government regulations that prevented GM from issuing a timely vehicle recall.
  • C. Shareholder activists demanding the company invest exclusively in electric vehicles.
  • D. Engineers' fear of reporting the issue to a strict management team focused on short-term cost control.
Question 4 of 8
Who primarily funds the fundamental research and development for major technological innovations, such as the internet, GPS, and touchscreens?
  • A. Government programs and institutions like the military
  • B. Shareholder activists and corporate raiders
  • C. Private equity firms and venture capitalists
  • D. The internal research departments of large tech companies
Question 5 of 8
How did Goldman Sachs exploit the aluminum market to increase its profits?
  • A. By heavily shorting the aluminum market right before a major crash.
  • B. By lobbying the government to place high tariffs on imported aluminum.
  • C. By buying aluminum storage plants and rotating stock between them to artificially raise prices.
  • D. By offering low-interest loans exclusively to struggling aluminum manufacturers.
Question 6 of 8
Why has the percentage of Americans who own a home been in decline since 2004, despite a rise in home sales post-2008?
  • A. Average citizens increasingly prefer the geographic flexibility of renting over homeownership.
  • B. Investment groups bought up large numbers of affordable homes to rent them out for profit.
  • C. Strict government regulations made it illegal for middle-class families to obtain mortgages.
  • D. The construction of new residential homes completely halted after the financial crash.
Question 7 of 8
What evidence does the author provide to demonstrate the deeply entrenched relationship between government and the financial sector?
  • A. Political action committees are legally required to fund all political campaigns equally.
  • B. Since 1900, 13 out of 35 Treasury secretaries have previously worked at banks.
  • C. The government frequently bails out banks without requiring any financial oversight in return.
  • D. All financial regulations passed since 2008 were written directly by Wall Street executives.
Question 8 of 8
What is one of the author's key recommendations for reforming the financial system?
  • A. Replacing the Dodd-Frank Act with a more complex, comprehensive 5,000-page regulatory bill.
  • B. Encouraging companies to completely merge their commercial and investment banking divisions.
  • C. Abolishing the Glass-Steagall Act to allow for greater financial innovation in global markets.
  • D. Requiring banks to fund their investments with at least 20 to 30 percent of their own capital.

Makers and Takers — Full Chapter Overview

Makers and Takers Summary & Overview

Makers and Takers (2016) investigates the role of finance in the 2008 crisis and subsequent recession. From the Great Depression onward, these blinks trace the history of loose regulation and blurred boundaries between commercial and investment banking, while highlighting the role of banks, businesses and politicians in the crisis. They also suggest actions the powerful can take to kickstart reform.

Who Should Listen to Makers and Takers?

  • Readers curious about the historical background of the 2008 crisis
  • Students of economics and finance
  • Young couples, families and professionals considering their prospects for mortgages and pensions

About the Author: Rana Foroohar

Rana Foroohar is a global economic analyst at CNN and a business columnist for Time magazine. She is also a frequent commentator for the BBC, NPR and CBS.

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