The Wealth Effect

'Special-interest politics figure importantly in all scholarly analyses of the causes and resolution of financial crises. Marshalling an amazing array of historical, statistical and narrative evidence, Chwieroth and Walter show that this point applies not just to the bankers who are commonly seen as the key players in these complex financial events, but also to the households whose deposits and savings are at risk. This observation has powerful implications for how financial crises play out in our modern era of mass democratic politics. The literature on financial crises will never be the same.' Barry Eichengreen, George C. Pardee and Helen N. Pardee Professor of Economics and Political Science, University of California, Berkeley
'The global pandemic of banking crises, and government-sponsored bailouts in response to those crises, are both unprecedented phenomena. Such new and socially costly phenomena beg for deep inquiry by political scientists seeking to understand their political roots, and The Wealth Effect offers just such an inquiry. It argues convincingly that bailouts and the severity of crises are connected to each other, and both reflect a new underlying politics in which the protection of banks has become popular with a broad class of voters. This book challenges mechanical views of risks that abstract from politics, and in doing so, calls upon voters in democracies to look in the mirror when seeking causes for their financial system, and fiscal, troubles.' Charles W. Calomiris, Henry Kaufman Professor of Financial Institutions, Columbia University, New York
'A fascinating and novel argument about the politics of finance before and after the Great Recession. Tracing the development and effects of a an enlarged 'bailout' constituency, involving both wealthy and middle class citizens, this book offers valuable lessons about finance, class politics and the workings of democracy.' Nancy Bermeo, University of Oxford and Princeton University