The aim of this book is to convince its readers (elites? politicians? The Public?) that the finance sector must be brought under "democratic control" -- an idea the implications of which however are left somewhat vague, though their main point seems to be that banking should be simplified, and "financial innovation" curbed. The book's premise is that the 'global financial crisis' should be understood as an "elite debacle". This is at the same time quite right, and very wrong. (More on that anon.) They proceed by analyzing the mental conceptions or narratives that made the deregulation that made the crisis possible palatable -- think here of notions like the 'Great Moderation' and the 'Washington Consensus', the social value of finance and the 'democratization' of finance, as well as of the increasing analytic centrality of notions like market efficiency and actor rationality. Specifically, they argue that this happened via a process of 'mystification' of finance (it seems to me more or less correctly, although it is unclear to me why they ignore the question of whether the academics contributing to this mystifying process were acting in good or bad faith).
Such 'narrative analysis' can be fairly illuminating (if the narratives are understood and described correctly), and the book fairly convincingly explains why (and provides an out for) so (the) many actors (who) were apparently helping create this 'new', and increasingly unstable, system. Moreover, they also give a correct high-level explanation for why entrenched elites were capable of stymieing all attempts at systemic reform: because the few who wanted it at all, lacked a proper narrative to convince the others with.
The premise of the book seems right to the extent that it is true that many politicians and bankers are likely not so callous as they would have to have been for them to knowingly change the rules so as to allow this crisis to occur (though note that the emphasis is on the occurrence and undesirability of crisis, and not on the looting made possible in the run up to the crisis). (As an aside I would point out, however, that, as any psychologist will tell you, people almost always find ways to rationalize their actions, making it unlikely that they would've understood their own actions this way even if that had been their intent.) The authors feel it is important for an explanation of the crisis to acknowledge and emphasize this fact, which is why they start by rejecting a few elite corruption-based accounts of crisis, to note that they feel that the majority of the steps that led to the crisis were "small, and in themselves relatively harmless decisions made by individual traders or bankers and banks". And the majority of these actors wasn't malevolent because "no banking insider from one node had an overview of the changing latticework of circuits" (9). (Complexity fetishism? This presupposes that knowing all aspects of the crisis is a necessary condition for "calling" it or understanding what you're working towards; though they both nuance and contradict this point in chapter four when pointing out that someone like Steve Keen predicted the bubbles while being unaware of the size of the shadow banking system.) In this way, they hope to be able to give their readers a way to understand that most bankers did not set out to destroy the world, but that they were rather out to make a profit, while "complacently" not wondering even for a moment about the possible consequences of their actions.
Frustratingly, however, this framework is actively hostile to the idea that fraud could have played an important role in creating the crisis. They sort-of justify this view that criminal behavior is not an important explanatory factor by first lumping together all actors who played a part in creating the crisis, and then arguing that, since it is "not proven" that all actors were 'callously corrupt' (and here they refer to GS's Fabrice Tourré), we may not assume that a significant portion of them were. Yet this in no way follows, because it seems quite conceivable to me to imagine that while for instance central bankers were mostly dim-witted hacks and dupes who got those posts because they were too stupid to recognize the idiocy of the models they took to describe reality -- the neoliberal self-regulation propaganda sold by the Thatcherites and Reaganites, the crap about (self-)equilibrating markets, rational actors, etc. -- (investment) bankers, on the other hand, were rather more aware of the illegality of their actions. As such, I am not sure why it seems so inconceivable to these authors to allow for the possibility that this played a role, except that they simply do not want to believe it. (They similarly simply assume that politicians, being 'representatives', are automatically interested in acting in the interests of their constituents, which is equally naive.) This is the main reason why I think this book's thesis quite wrong: because it furthers the myth that fraud did not play a significant role in creating this crisis, and that there wasn't at least an influential subset of bankers and politicians who did know what they were doing, whilst being quite happy to keep at it (for this, see Hare's work on corporate psychopaths, as well as the work of e.g. Bill Black on what's called 'control fraud'). This is underscored by the fact that the word 'fraud' is used exactly once in the book, to describe Madoff, while events like the S&L Crisis and the Abacus deals are described as a '(regulatory?) fiasco/scandal' rather than the fraudulent schemes that they were -- the message being 'look away, there's nothing more troubling to be seen here'.
Additionally, I would take issue with the suggestion to view the crisis as a "debacle," for two reasons. First, it in a strange way seems to efface the moral relevance of any and all actions taken during the Great Moderation, because of the way in which everything is cast as a "policy failure" on the part of the government only, rather than as something more morally disturbing, such as, say, a nasty mixture of looting, theft and class warfare. Moreover, it seems to be cast this way at least in part because the authors cannot shake the belief that economic policy, post-Washington Consensus, is 'beyond politics,' so that nobody could be bothered any longer to identify the growth in income inequality as events in a political project, rather than as a bland "consequence of globalization", and of "bad incentives."
Having said that, the book does offer a few points of interest, such as some empirical support for the point that New Labour did not take much convincing, and that it cared little for the macroeconomic consequences of their supporting the growth of finance. The authors here neatly undermine the idea that Britain profited from allowing unlimited financial sector growth. Second, it has a decent -- if too short -- discussion on the role and history and importance of the BIS, the Basel Committee, and the ECB as being entirely outside of the reach of democratic politics. In all, though, while the touch on a number of important issues, it seems to me that their analysis is far too shallow to really impress.
Weighing the good against the bad, however, I would have to say that I take what's right in this book is not interesting enough to balance out that what's wrong and omitted; it seems to correctly identify a number of important considerations, only to then deliver a far too superficial analysis of what went wrong and why. And the major reason for this is that the authors place far too much emphasis on their belief that most of the actors involved could not and did not know what the precise result of their actions would be; while paying too little attention to the fact that the actions that led up to this crisis were quite problematic in themselves, that is, even if they had not led to the current crisis. As such, I cannot recommend buying this book.
A final note: In the concluding chapter, the authors say that what they think is needed are "stories that can displace the ones currently circulating". It seems to me that there are no stories better suited for getting this process of story displacement rolling than those that tell us of the massive number of frauds and scams perpetrated by (mostly) financial sector employees attempting to enrich themselves at the cost of everyone else. The primary difference (relevant to this discussion) from the way the 1929 depression unfolded, then, is that back then, it only took three years for the Pecora committee to be installed; whereas this has yet to happen this time around. (And no, the various parliamentary hearings, which assigned blame to "the system", while leaving all of the primary actors alone -- of course only after 'extracting' a number of variations on "wir haben es nicht gewußt" -- do not count.)