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growth throughout the industrialized world for many years to come. The proper job of bankers is to allocate capital efficiently by assembling savings from households and businesses, and to place
that money into the investments that produce the highest long-term returns for the economy. That is how the financial sector creates jobs and prosperity—or so economic theory says it should.
    But the housing boom of the 2000s, which was based on a combination of unsustainable consumption and outright fraud, brought no real economic improvement. The financial system deliberately
shifted its focus toward people who were either bad credit risks or easy victims, creating new products to entice and defraud them.
    By the autumn of 2005, Merrill Lynch estimated that half of all US economic growth was related to housing—including new construction, home sales, furniture, and appliances. Much of the
rest came from the Bush administration’s enormous deficit spending. America was living in a fake economy. Finally, in 2008 the banks ran out of victims, and the bubble collapsed.
    NONE OF THE FINANCIAL destruction wreaked by the bankers was an act of God. Nor was it unforeseen. Voices were raised in warning early in the 2000s,
and in greater and greater volume, as the bankers plunged into ever more exotic universes of risk. Some of them are in my film Inside Job —Raghuram (Raghu) Rajan, Charles Morris,
Nouriel Roubini, Simon Johnson, Gillian Tett, William Ackman, Robert Gnaizda, the IMF, even the FBI. They were all ignored, even ridiculed, by those who were profiting from the situation. To a
great degree, of course, the outlines of this story are now known, and I will spend relatively little time on it. Most of this book is therefore devoted to two issues: first, the rise of finance as
a criminalized, rogue industry, including the role of this criminality in causing the crisis; and second, an analysis of the wider growth of inequality in America.
    The book therefore proceeds as follows: Chapter 2 offers a short history of the twenty-year period that led to the rise of a deregulated, concentrated, destabilizing
financial sector, including the reemergence of financial crises and criminality.
    Next, I describe the available evidence about banking behaviour during the 2000s, including the role played by criminal behaviour in the bubble and crisis. Chapter 3 examines mortgage lending;
chapter 4, investment banking and related activities; chapter 5, the coming of the crisis and the behaviour it produced. Chapter 6 surveys the rise of financial criminality, and the case for
criminal prosecutions. Not all of the bankers’ actions were criminal, of course, but some were—especially if we apply the same standards that sent hundreds of savings and loan
executives to prison in the 1990s, not to mention what happened to people not lucky enough to be working for major investment banks when they committed fraud or laundered criminal money.
    The last four chapters of the book are a wider analysis of America’s recent changes. Starting with financial services, and then turning to academia, other economic sectors, and the
political system, I discuss America’s descent over the last generation into an economically stagnant, financially unstable, highly unequal society. I begin in chapter 6 by examining the
financial sector’s transformation into a parasitic industry that increasingly confiscates, rather than creates, national wealth.
    In chapter 8, I turn to academia. Many viewers of Inside Job commented that the most surprising and shocking element of the film was its revelations about academic conflicts of interest.
Here I provide a far more detailed and extensive examination of how the financial sector and other wealthy interest groups have corrupted American academia, changing its role from independent
analysis to an additional tool for corporate and financial lobbying. In chapter 9, I consider the broader decline of the economic and